Keep your business healthy with accounts payable automation
Your vendors need to get paid on time. We’re all dealing with coronavirus chaos, closures, and cutbacks, so using accounts payable automation to process their invoices efficiently will result in stronger supplier-customer relationships once we get through this. In this post, we’ll provide insights into the importance of accounts payable (AP) during and after quarantine, and offer some practical advice on improving AP efficiency with automated invoice data capture.
Efficient AP operations are essential to maintaining your business continuity. Timely payment is vital to the survival of the suppliers your company depends on. On top of dealing with the economic uncertainty surrounding the covid-19 lockdown, your vendors don’t have the capacity to chase down missed or delayed payments. On your end, you probably don’t have the manpower and budget to dedicate to dispute management, especially right now.
Manual invoice processing is slow, costly, and resource-intensive enough under normal operating conditions. AP efficiency could worsen if you now have a distributed team that may be smaller in number due to furloughs or layoffs.
Fortunately, you can quickly and easily automate invoice processing to ensure your vendors get paid on time. In the long run, you’ll save time and cut costs; you’ll also enable your AP staff to create more value for your company.
Accounts payable automation is more than a quick win
Some activities, like extracting and exporting invoice data, are relatively simple to automate. For years, experts have been extolling the virtues of automated AP processes over manual processes to such an extent that one couldn’t help but wonder why so many businesses didn’t just go ahead and adopt automated invoice data capture. For instance, it can cut your company’s annual invoice processing costs by nearly 80%, which is a massive benefit on its own.
In the best and worst of times, AP is complicated and there’s not much room for risk-taking. While the benefits of AP automation software may have always been clear, the pre-covid reality was that a lot of businesses needed time and budget to transform their accounting workflows.
At the moment, however, we’re seeing a faster rate of transition from manual to automated processes. Experts like Mark Muro, an automation researcher at the Brookings institution, believe companies will invest more in automation while their offices are closed. “there’s a lay view that automation might slow because the technology is expensive and firms would be hesitant to make capital investments in a crisis,” says Mr. Muro in a protocol article about the coronavirus-inspired automation boom, “economic literature over the last decade shows that these investments are made especially during a crisis.”
The article goes on to state that organizations that already had automated workflows in place before the coronavirus hit are capable of taking on new business with relative ease. Looking ahead, automation will be invaluable to your business-critical processes when everyone’s back at the office and scrambling to catch up. You’ll also be well-prepared to handle future disruptions.
Looking at cost, not all automation is as expensive as companies may think. Not only is AP automation cost-effective, it also offers a quick and substantial return on investment due to
• Reduced total cost of ownership (TCO) for invoice processing
• Increased value generation from AP staff who spend far less time manually extracting and exporting invoice data
• Greater opportunities to capture early payment discounts from suppliers
Why accounts payable automation is important right now
Not only will automation keep your AP processes running efficiently during the covid lockdown, your entire AP operation will benefit in the long run. You stand to gain just as much if you’re using template-based optical character recognition (OCR) to extract invoice data.
Maintain business continuity
As we explained in our webinar learn how your AP department can benefit from remote work, business continuity is an organization-wide priority. AP automation helps ensure your suppliers get paid so they can keep providing you with the products and services you need to serve your end customers with little to no interruptions.
While labor costs have been growing over the past 28 years, the cost of automation has been dropping. So transitioning to an automated invoice data capture solution saves money from day one. With the right platform, integration and onboarding require a minimal investment of time and budget, so you can start reducing the TCO of invoice processing within days, if not hours of switching from manual to automated data extraction.
To get paid on time, your suppliers depend on your AP team’s efficiency. Artificial intelligence (ai) helps your accountants capture data from more invoices more quickly. For instance, we’ve seen companies use automation to reduce their processing time from 3 minutes to 30 seconds per invoice.
While the circumstances that have closed your offices are far from welcome, remote working actually helps increase productivity. Accounts payable automation can drive productivity even further; for example, we’ve seen cases where it has freed up 70% of managers’ time, allowing them to devote time to high-value front-office tasks.
Empower employees to generate greater value
People want the freedom to create more value for their employers. A monday.com study shows that over 32% of workers would get rid of repetitive tasks if they could make a single improvement to their jobs. More than 70% stated they’d like to see automated data extraction replace manual data entry.
Your employees want to be engaged in their work so they can do more for your company and your customers. The monday.com report also indicates that 63% of the working population feel that chores like data entry are preventing them from performing their best.
Strengthen vendor-customer relationships
Take care of your vendors and they’ll take care of you. This is a scary time for all businesses, especially SMBs and entrepreneurs. They will appreciate the peace of mind they’ll gain knowing they can count on you for timely payment.
At the same time, your suppliers should be aware that your business might be facing its own cash flow issues. If they’re not, you need to help them understand what you’re dealing with, and, most importantly, that we’re all in this together.
When you let your vendors know you’re transitioning to automated invoice processing to help honor their invoices on time, you’re telling them you value the role they play in your operations. Your commitment to their business’ well-being could even make them open to providing early payment discounts or accepting staggered payment arrangements.
Automation can help resolve current and future AP challenges
If you found invoice management challenging before the pandemic, you’re not alone. According to Levvel, back-office experts have consistently reported invoice processing issues that automation can resolve.
AP automation can resolve most manual processing issues. Source: Levvel 2020 payables insights report
A lot of suppliers still use paper invoices
Despite an abundance of opportunities to automate their operations, AP teams generally use analog processes. In the us, 72% of suppliers send their invoices by post and 44% still use fax machines. On the customer side, a whopping 81% of companies pay their vendors with paper checks.
Under the current circumstances, reliance on paper is going to complicate your AP process, increasing the risk of delayed or missed payments. Even in the best of times, managing all this paper is very costly, especially when you’re using manual data entry or a traditional OCR data capture solution.
Regardless of whether your team is working remotely, manually processing paper invoices can cost your AP department, and your company, a lot of time and money. Your finance team may be spending nearly half its time processing transactions, costing you nearly $80,000 annually – and that’s just for a two-member team.
Automation can also eliminate potential disputes over missed, late, or duplicate payments. Such conflicts can not only strain your relationships with your suppliers, they can have a serious impact on the profitability of all parties involved. Levvel estimates that the labor costs of dispute management can range from $1,350 to $27,000 per employee annually.
Pitching ROI for accounts payable automation, level
Convince your vendors to submit electronic invoices
If you need to get vendors to switch from paper to digital invoices, the benefits you need to communicate to them include
• Assurance that your AP team will receive their invoices
• Timely payment thanks to fast automated processing
• Prevention of costly, time-consuming dispute management
Accounts payable inefficiencies can delay payments
If you’re using manual AP processes, or you use an on-premises OCR solution to capture invoice data, you may find it difficult to pay vendors on time. Inefficient, costly, resource-intensive, and error prone, these methods can create bottlenecks not only when your AP team is working remotely, but also when they’re back at the office.
Delayed payments are putting vendors out of business
Late payments have always been a huge pain point for small to medium-sized suppliers. In the UK, the federation of small businesses reported that delayed payments caused 50,000 SMBs to shut down annually, costing the British economy £2.5 billion.
Inefficient invoice processing that delays payment can also result in costly penalties for you. The exact amount depends on where your suppliers are located. For example, this prompt payment guide for American construction contractors and subcontractors, shows how late fees, interest rates, and payment periods vary from state to state; they’re also different for public and private contracts.
AP automation helps your vendors help you
An automated invoice processing solution not only captures and exports data quickly, it also routes invoices into one central system. Forgotten or lost paper invoices become a thing of the past, and your AP team can see to it that your suppliers get paid on time. With the peace of mind that they’ll be paid on time thanks to your automated AP operations, your vendors may even be more inclined to offer early payment discounts. At the same time, you eliminate the risk of accruing late fees and interest.
Your AP team may be smaller
A recent fishbowl survey indicates that 41% of accounting professionals believe that covid-19 will result in company layoffs. Nobody likes talking about this, but letting AP team members go or putting them on furlough because of the lockdown could increase the workload of remaining team members who have to process invoices manually. As a result, there’s a higher likelihood of employee burnout and delayed or missed payments.
Automated AP keeps your experts productive
We’re not suggesting that machines can easily replace people, but in the case of invoice processing, they can alleviate the pressure and tedium of manual invoice processing. In our experience, automation can help a smaller team process at least six times more invoices than a larger team using manual methods. This enables your accountants to dedicate more time to higher-priority, value-generating tasks.
B&Co is ready to automate AP for you now
We built B&Co to help free your AP team from the hassle of manual invoice processing so they can focus on more business-critical tasks, and better serve your organization. The cloud-based platform’s unique AI delivers several cross-organizational benefits from day one.
Fast invoice processing
With its human-like ability to read documents, B&Co’s AI understands invoice structures in a way that enables it to extract data from hundreds to thousands of invoices in minutes. For instance, one client that handles an average 500 invoices monthly reduced its processing time by 75%.
Easy work distribution
While your AP experts can easily upload digital documents to B&Co, you can also have them or your suppliers send invoices to a custom inbox. Once received, the platform automatically imports the documents for data extraction.
Easily track performance
B&Co’s usage reporting dashboard keeps you on top of your AP team’s invoice processing activities. You can use it to track and optimize performance at individual, team, and deal levels.
Increase accuracy with use
The B&Co ai engine reads document structures like a human, which enables it to determine the invoice data you need to extract and export to your business systems. With increased use and, thanks to the intuitive ui, simple validation, the platform delivers increasingly accurate results, moving your AP process closer to complete automation.
Business continuity may be more of a priority than growth for you right now. When you get to a point where you need to process more invoices and other business documents, B&Co keeps your AP processes running efficiently.
Swift and simple integration
Automated invoice processing is easy to set up with B&Co. Working with our experts virtually, you can implement it into your company’s workflows and business rules in hours. This is a massive improvement over manually setting up template-based OCR solutions, which can take up to six months and frequently fail to meet user expectations.
You and your AP specialists will also appreciate the lack of a learning curve when using B&Co’s clean, user-friendly UI. Our customers report that a brief training session is enough for their employees to start working with the platform from day one.
Take your first step towards accounts payable automation
You can start optimizing your accounts payable processes with automation today. Set up your B&Co trial in minutes and process up to 300 invoices per month free of charge, with no obligation.