3 reasons the market is rapidly adopting AP automation

Over the past decade, many organizations in North America have embraced accounts payable modernization as an effective measure to streamline their back-office processes, lower operational costs and drive competitive advantage.

In fact, roughly 80% of respondent organizations in the 2021 Payables Insight Report expressed interest in a third-party, cloud-based AP tool. The need to move away from manual processes became clearer than ever when the pandemic hit.

As Levvel puts it: The model of manual processing is not just dated and costly but also puts the health and safety of employees in danger. AP units that had already deployed automated processes ensured business continuity, even when employees aren’t returning to offices.

Indeed, according to the report, almost 80% of organizations still have employees working remotely — and that may not change, regardless of how the pandemic fluctuates.

Resilient organizations improved their AP processes by adopting automation that:

  • Reduces paper invoice volume
  • Accelerates invoice approvals
  • Lowers overall AP processing costs
  • Increases employee productivity

Without modernizing, organizations could lose out on major opportunities to stay on top of the leader board, simply because they have not adopted automation.

3 shifts you need to ‘pay’ attention to

Let’s have a look at three notable market shifts driving the rapid adoption of AP automation in North America based on recent Levvel Research findings, and what they could mean for you.

1. Diversifying software options are widening the financial process automation market

One of the main reasons for the rapid growth of AP automation is the easy availability of software solutions in the market today. In the past, software providers designed their solutions mainly for large enterprises with the resources to support the investment.

Today, with technological advancement, providers are expanding their businesses to include SMEs and mid-market organizations by offering versatile and tailored solutions.

What’s the impact on your organization?

  • A widening automation market means your organization has to compete with not just large enterprises, but also SMEs and mid-market organizations.
  • In the digital age, choosing the right software solution could potentially make or break the growth of your organization.

More diverse options mean it’s worth exploring solutions that provide the best fit for your organization, no matter its size.

Organizations are increasingly favoring cloud-based software that is compatible with different enterprise resource planning (ERP) systems as well as niche solutions that prioritize full integration with a single ERP. Experts see these solutions as more modern and cutting-edge compared to homegrown or ERP-based solutions.

2. Back office automation is embracing the strategic philosophies of digital transformation

Since digital transformation entrenched its roots in the business world, organizations of all sizes are slowly recognizing the significance of applying technology to their business processes. Not only does adopting automation make a visible impact in improving business agility and in reducing operational costs, but it also creates opportunities to generate revenue by optimizing efficiency.

Where does that leave you?

  • Manual data entry, manual routing and lost or missing invoices are among the major reported AP pain points.
  • In fact, 57% of organizations are still burdened by manual data entry processes, according to Levvel Research’s report.

If you are in that 57%, it’s time to ask yourself where you stand on the digital transformation scale. After all, embracing at least some automation such as front-end imaging and intelligent data capture or invoice workflow automation helps resolve some of the major pain points in AP.

To achieve the status of a fully automated AP department, according to the Levvel Research, your organization must:

  • Receive 100% of invoices in an electronic format
  • Have a data capture tool to automate invoice entry
  • Have an invoice workflow tool for automated invoice approval, which effectively creates a “touchless” invoice environment

3. Organizations are leveraging payables automation to enable scalable growth and disruptive business evolution

Another major reason for the rapid adoption of AP automation is the realization that technology can impact scalable growth in businesses. Smaller organizations are embracing automation early on to create a long-term competitive advantage against larger organizations in hopes of becoming market leaders.

Automated departments reported more efficiency between back-office departments, according to Levvel Research.

How does that affect you?

  • 43% of automated organizations said they experience fewer issues and are satisfied with their automated process.
  • Only 9% of manual organizations said they’re satisfied with AP processes.

To adopt – or not to adopt – AP automation

In today’s market, the digitization of business practices is time sensitive. The earlier you leverage technology and automation in AP, the quicker you can establish your presence in the market and in the minds of your customers.

Even partial adoption of AP automation is seen as a progressive step towards digital transformation, in addition to the benefits and improvements automation brings to the table. These are among the reasons North American organizations are increasingly implementing AP automation.

Simply put, adopting automation for AP processes can greatly impact operational costs and revenue and give you a competitive advantage. Meanwhile, sticking with manual processing could limit any chance of growth in the future.

So, are you ready to find the perfect solution to automate your AP department?

Danielle Simer

Danielle Simer

Danielle Simer is a marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of enterprise content management (ECM) as a tool to automate... read more about: Danielle Simer