Inefficient paper-based processes plague accounts payable (A/P) operations, making it one of the scariest processes in any office. POs and invoices go in, sometimes never to be seen again.
But what should scare you the most about A/P?
1. A/P departments really want to get away from paper…
According to Ardent Partners, 52% of AP departments say their top priority is migrating away from paper-based processes.
2. But vendors won’t let them.
Yet according to The Accounts Payable Network, 80% of invoices still arrive on paper.
3. Take two aspirin and call me in the morning.
Because all these invoices arrive on paper, The Accounts Payable Network lets us know that only 14% of them are input into the AP system the same day they arrive.
4. The problem is the process.
According to Ardent Partners, 47% of AP leaders feel lengthy processing times are their biggest challenge.
5. That process takes way more steps than it should…
That fear may be well founded; Stellent Partners found that a manual invoice process can sometimes exceed 15 steps before the final posting is done.
6. And way more time.
According to the Aberdeen Group, with minimal automation, it may take up to 16.3 days to process a single invoice.
7. Would you like another zero with your balance sheet?
The Institute of Finance & Management (IOMA) found that the average cost of processing an invoice in an environment with a low level of automation can be up to 20 times higher than in an environment with a high level of automation.
8. Invoice? It’s probably sitting on my desk somewhere…
Stop blaming the A/P clerk—that pay delay may not be their fault. According to the 2012 AP Benchmarks report, when vendors send invoices directly to purchasers (rather than to the A/P office), it takes an average of 5+ days for the invoice to reach the A/P department.
9. Quantity sometimes leads to quality.
IOMA also reports that the industries with the highest costs to process invoices are non-profit/education (ringing up at $16.78) and government (close behind at $15.88). The cheapest? Wholesale/retail at $3.57.
10-13. A lack of PO’s is PO’ing off quite a few A/P departments.
PO invoices cost quite a bit less to process, and A/P departments can process more of them per month, according to IOMA: $10.58 vs. $11.63, and 2,049 vs. 2,462.
14. Mistakes were made (and probably by me…and you…and them over there).
On average, 3.6% of invoices have errors, probably due to manual data entry. (Thanks, IOMA.)
15. Thieves don’t always break in through a window.
The Association of Certified Fraud Examiners points out organizations lose an estimated 5% of their annual revenues to fraud.
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