Are you wondering how your Accounts Payable department can stand out from your peers? Ardent Partners conducted a study to determine an industry-wide view of accounts payable (AP). Manual invoice processing and paper process inefficiencies were found to be two of the biggest challenges facing AP departments.
There are several main indicators which allow companies to determine efficiency. The researchers found the mean of each indicator for all the companies participating in their study.
• Average cost per invoice – $14.21
• Average invoices per FTE – 2,308
• Average invoice cycle time – 12.4 days
• Average invoice exception rate – 13.1%
The report found that 70% of AP departments still manually submitted invoices, potentially leading to the top challenges the study’s participants noted.
• Delay in receiving matching information
• Invoice/payment approval takes too long
• High percentage of exceptions
• Lack of visibility into invoice and payment data
• Getting the budget to invest in automation
• Processing of an invoice takes too long
• Late supplier payments
Automation is the answer!
Automating the entire AP process will shorten approval workflows. The shortened timeframe allows you to catch early payment discounts which offers financial benefits. It also improves relationships with suppliers. In addition, management has better insight into business operations which helps them to make better strategic decisions.
Ardent Partners found the top 20% of AP performers and labeled them as Best-in-Class (BiC). The statistics speak for themselves:
• Cost per invoice was $2.42 compared to $17.61 of all the other organizations
• BiC process three times more invoices per month and in a 78% shorter time frame
• BiC has two or three-way matching capabilities and standardize their AP processes.
• BiC automatically route invoices for approval
Perhaps the main way BiC companies outperform the other organizations is their adoption of technology.
Read the Secrets of World Class AP Departments Executive Brief to learn all the secrets that make the best in class stand out from their peers.