3 troublesome stats from the PayStream Advisors 2018 Payables Insight Report
With topics like artificial intelligence, IoT, robotics and the like part of so many technology conversations today, one might assume that most or all organizations are well on their way towards complete digital transformation. But that’s not the case, according to the latest Payables Insight Report from PayStream Advisors.
In light of all the technology solutions available today, a surprising number of accounts payable (AP) organizations have not automated their invoice processing. Most AP organizations are still working with document-driven, manual processing, which decreases accuracy and slows processes.
The big 3
Here are three troublesome stats from the report revealing most AP organizations are not as efficient as they could be:
1. Companies still primarily receive invoices via unstructured formats like paper and email.
Paper and email invoices make up 36 percent and 34 percent respectively of the total volume of invoices received by the surveyed companies. This is especially troublesome when you consider the fact that invoice receipt is the first component of the payments lifecycle.
Lifting invoice data from unstructured formats and importing it into an ERP or accounting system can be excruciatingly manual, time-consuming, and full of risk for human error. If your process is that inefficient straight out of the gate, there’s not much hope left to get invoices approved and paid on time.
The ratio of unstructured to structured invoice formats is often a key indicator of an organization’s level of efficiency and innovation. Structured invoice formats, including EDI, XML or web uploads through an online supplier portal can kick off a fully automated process and enable touchless invoice processing and approval – increasing your speed and accuracy.
2. Manufacturing lags other industries in the adoption of AP automation tools.
PayStream believes the reason manufacturers still receive the majority of their invoices via paper and email is partly attributed to their focus on direct goods purchasing and contract-based spending.
However, with the current industry 4.0 evolution and emphasis on new technologies, it’s surprising that manufacturers are not more progressive when it comes to automating critical business functions like AP.
Paper and email invoices are not a death sentence when it comes to AP efficiency. With the right tools, like intelligent data capture or mailroom services, an organization can process unstructured invoices with little to no manual intervention. Unfortunately, PayStream research indicates that AP is not where manufacturers focus technology investments.
3. More than half (55 percent) of organizations manually enter data into their ERP or accounting system.
An important factor influencing AP efficiency is how organizations input invoice data into the ERP. As I mentioned previously, manually keying in data slows invoice processing from the start.
More importantly, it opens up plenty of room for errors that put the company at risk. We’re all human – we make mistakes. But something as simple as misreading a number or hitting the wrong key could be the difference between paying a vendor on time and getting hit with a late fee.
With the number of automation solutions available to alleviate manual data entry and indexing, more organizations should take advantage of these helpful tools. Optical Character Recognition (OCR) can extract data from scanned or PDF invoices and automatically validate the information against existing databases (e.g., purchase order numbers against the purchasing system). AP Staff only need to get involved when an error is flagged for review.
And workflow integrations with enterprise ERPs like SAP and Infor Lawson can automatically update transactions with the extracted invoice values and status information – without anyone having to touch a keyboard.
Just the facts
Perhaps the most troublesome point of all is that AP automation solutions have not been more widely adopted, despite the significant benefits they can offer an organizations. Some even believe there will be no ROI!
The facts prove otherwise. Companies that have implemented AP automation have seen quicker invoice approvals, improved visibility into unpaid invoices and liabilities, and increased employee productivity – just to name a few benefits – according to the PayStream report. While budget restrictions are an understandable factor in why more AP organizations haven’t yet automated, what AP and IT leaders alike should understand is that the operational benefits and savings will ultimately outweigh the cost of these solutions.
What AP automation trends stand out to you? Click here to download a free copy of the PayStream Advisors 2018 Payables Insight Report.
In addition to the survey results, the report details the features and functionality of payables automation software as well as benchmarks for assessing your current state, so you won’t be a troublesome stat.
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