Common Myths about Accounts Payable Automation
Accounts payable (AP) is the heart of the finance and accounting, and supply chain functions of any business. However – with manual invoice processing – the traditional accounts payable functions are fraught with challenges that directly hamper their efficiency and effectiveness, which can cause broader complications to vendor relations and business growth. AP automation has allowed modern businesses to leverage next-gen technologies to tackle these challenges and improve their accounts payable function for an enhanced stakeholder experience.
However, despite the apparent benefits of AP automation, many businesses continue to forgo the step that would not only allow them to improve AP efficiency but save costs and protect themselves against potential fraud. This is because of the myths and misconceptions that surround AP automation solutions and a lack of understanding about automation technology.
Common myths and misconceptions about accounts payable automation
Four of the most common misconceptions and myths of accounts payable automation are:
- AP automation is no more efficient than manual processing:
- AP automation is too expensive:
- My business is too small (or big) for AP automation:
- I will lose visibility and control over invoice processing with AP automation:
Many believe that their AP processes are as efficient as they can be. A 2021 study has revealed that companies processing invoices manually can usually pay only about 25% of the invoices on time. AP automation can help you improve your invoice processing time drastically, allowing you to save 90% of the invoice processing time and freeing up your team to focus on other important tasks.
Most business leaders believe that AP automation solutions will significantly hamper their bottom line. Although AP automation indeed needs initial investment, it reduces the invoice processing cost significantly. A 2021 study has revealed that companies processing invoices manually spend $15.97 and $6.10 per invoice when processing less than 20,000 and between 20,000-100,000 invoices, respectively. With AP automation, these costs come down to $12.98 and $4.24, respectively. This average $2.5 saving per invoice proves that “automation is expensive” is a common myth of AP.
No business is too small or too big for AP automation. In fact, for a larger business, it makes sense to automate accounts payable functions to cope with the large volume of invoices. But even for a small business, automation can free up your AP team to focus more on strategic activities like sourcing, vendor management, and spend analysis.
Losing control and visibility over invoice processing is one of the most common myths of AP automation, as the opposite is true. Automation gives you greater control over invoice routing, matching, or circulation to match your business needs. And your team only needs to review invoices that do not pass the pre-approved rule-based approval process. Additionally, with centralised invoice data, you can easily track the status of any invoice within seconds, affording you greater visibility across AP processes.
Common challenges accounts payable automation can help you overcome
And once you have understood the common misconceptions and acknowledged them as accounts payable myths, you can begin to truly recognise the potential of AP automation and the benefits it can bring to your business. And once you let go of these misconceptions, some of the most common AP challenges automation can help you overcome include:
- Lack of visibility and control across accounts payable functions
- Slower invoice processing and approval cycle
- Low productivity
- Data entry and invoice processing errors
- Document storage
- Vulnerability to fraud
- Lacking communication and coordination among the AP team
These are some of the challenges that can have a detrimental impact on not only your accounts payable functions but your overall business outcomes as well. Therefore, business leaders must educate themselves about the common accounts payable myths, look past them and embrace automation to improve their performance efficiency.
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How can Infosys BPM help?
The Infosys BPM accounts payable function is a modern AP system equipped for the future and can assist in revolutionising your AP tasks. You can process invoices quickly in minutes by using AI-powered data extraction, enhancement, and workflow coordination. Turn your invoice processing function into a profit centre by saving up to 90% time, improving efficiency and cutting invoice processing costs in half. And with APOC offerings like end-to-end AP workflow, self-service supplier portal and AP cockpit, you can focus on the 3E’s of efficiency, effectiveness and experience to ensure enhanced time-to-value coupled with improved stakeholder experience via real-time insights. As a business, big or small, you can leverage Infosys BPM APOC to streamline your accounts payable functions, avoid common AP mistakes and turn your AP processes into a source of profit.