Manual processes create a lot of accounts payable pain points for organizations of all sizes. In its 2019 Payables Insights Report, Levvel Research found that the top pain points across North American organizations include:
Levvel found that organizations eliminate accounts payable pain points by automating their processes to create an invoice environment with significantly fewer touches. Organizations also hope to reduce the cost of administrative operations and redirect those funds towards revenue-generating centers.
What happens when organizations automate their AP processes? Levvel says the greatest overall improvements reported are a reduction in paper invoice volume and faster invoice approvals. In addition, organizations report:
To avoid accounts payable pain points presented by manual AP and to achieve better results, organizations are increasingly automating their AP processes.
One of the clearest indicators of AP efficiency in an organization is the breakdown of its invoice receipt types. Levvel divided invoices into two categories: structured and unstructured. Unstructured invoices are those where data is not controlled by a structured electronic format, and typically includes traditional invoice types such as paper, email, PDF, and fax. Structured invoices enable controlled data transfer and come in the form of EDI or XML invoices, or invoices entered directly into a structured format via a web portal; structured invoices are referred to as electronic invoices (e-invoices).
The optimal method of invoice receipt type from a cost, data control, and speed standpoint is e-invoice. Most organizations, however, receive the majority of their invoices in unstructured formats primarily paper, followed by email. The typical factors that determine the invoice receipt type of an organization include its age and/or size; the culture of its industry (e.g., technology-forward vs. traditional); and the composition/characteristics of its supplier base.
While invoice receipt type is an important indicator of the AP automation maturity of an organization, it does not indicate that an organization’s AP process is inefficient. While EDI remains the preferred method for data control and efficiency, organizations need to deal with paper for years to come—and they will need to find a way to operate efficiently despite the paper. Automation in terms of unstructured invoice receipt typically means employing a data capture/imaging solution to intake data. The alternative is manually keying invoice data into the appropriate systems for verification, routing, and approval for payment.
Learn more about accounts payable pain points and how to resolve these by downloading the 2019 Payable Insights Report, sponsored in part by DocStar.