What is Accounts Payable Optimization?
Legacy AP solutions can't match the touchless processing, fast turnaround, visibility, and cash-back rewards provided by Accounts Payable optimization.
Is your AP automation solution falling short of expectations?
If you are nodding your head, you are not alone.
Seventy percent of AP departments now have some type of invoice processing technology, the Institute of Finance and Management (IOFM) reports. However, few AP departments have achieved truly electronic touch-free processing. And even fewer are delivering benefits beyond the AP department.
AP automation alone is not enough for today’s economic and business realities.
AP departments also need to optimize their operations. Accounts payable optimization combines advanced end-to-end technologies with industry experience and expertise in business process improvement to deliver strategic and operational benefits – exactly what a business expects during turbulent times.
Why consider accounts payable optimization?
Many weary AP leaders are so grateful for the gradual improvements from automated solutions. They never consider what they might be missing.
Wondering if your AP automation system is falling short?
Here are four signs that your AP processes aren’t optimized:
1. Too many manual processes.
Many AP departments remain bogged down with manual processes long after automating. Manual keying. Physically routing invoices for approval. Chasing down information. Responding to calls and emails from suppliers about the status of invoices and payments.
The root of the problem is traditional AP technologies take a piecemeal approach to automation. The result is processing gaps that create inefficiencies. For instance, many AP solutions can’t extract the data from invoices that arrive via email. Some solutions require rekeying the information from approved invoices into an ERP.
Others can’t automatically match invoices to purchase orders or delivery receipts in an ERP. And when there are manual processes, there are going to be errors that make things worse.
2. Slow cycle times.
Faster invoice approvals are one of the biggest reasons accounts payable departments automate. Slow invoice approvals result in invoice backlogs, late payments to suppliers, and more calls and emails from suppliers wondering about their invoices and payment status. The result is missed opportunities to capture early payment discounts and difficulty forecasting cash.
The automated solutions used by most AP departments only go so far in accelerating invoice approvals. Poorly integrated components require handoffs that delay approvals. Invoice workflows can’t be dynamically adjusted. And it’s hard to identify bottlenecks and inefficiencies in the accounts payable cycle without an end-to-end solution.
3. Poor visibility.
Tightly managing cash flow and corporate spending means more in times like these. However, the assortment of siloed solutions that most AP departments use to process invoices makes it difficult to get a complete picture of where things stand. Reporting was an afterthought in many AP systems. Key data is not captured. Information is not timely. Data is poorly organized. People are even still working and approving invoices via their email boxes. Information may not be accessible to decision-makers when, where, and how they need it.
It wasn’t supposed to be this way for AP departments that automated.
4. No revenue opportunities.
AP has historically been seen as a tactical back-office function. A drain on company resources. A cost center. The automated solutions deployed by most AP departments do little to dispel this notion. While most automated solutions help AP departments reduce overhead, the technology doesn’t deliver value to the enterprise.
It’s easy to see how traditional automated solutions can leave AP departments wanting.
Taking automation to the next level
Accounts payable optimization delivers the operational improvements of traditional AP automation solutions and then some. By combining advanced technology with industry experience and expertise in business process improvement, AP automation delivers compelling strategic and operational benefits.
AP optimization uses advanced technologies such as intelligent capture and machine learning to virtually eliminate human intervention for data extraction, general ledger coding, invoice matching, invoice approvals, exceptions resolution, and ERP upload. It’s possible for AP departments to wipe out the handling of paper and emailed invoices. When invoices and data flow touch-free through the accounts payable cycle, costs are lower, the chance of errors is reduced, and cycle times are accelerated. Eliminating manual, repetitive tasks also frees AP staff to spend time on higher-value activities such as analyzing data, collaborating with stakeholders, and building relationships with suppliers.
It can take days or weeks for an AP department to get approval on an invoice, even in an automated environment. AP optimization solutions solve this problem by combining industry experience and expertise in business process improvement with advanced digital workflow technology. For example, intelligent work queuing, notification of invoices awaiting approval, and automated alerts that invoices are approaching their due date. Escalating unapproved invoices and real-time dashboards empower AP managers to take proactive measures to resolve bottlenecks. The cloud architecture of most AP optimization solutions also makes it easy to support decision-makers who are working remotely. AP optimization is so powerful that some AP technology providers guarantee a next-day turnaround on invoices submitted by suppliers.
AP optimization instantly puts smart insights at the fingertips of those who need them. There’s no need to guess about operational performance, cash flow, and corporate spending. Dashboards, drill-downs, mobile access, exports, and ad hoc reports detail metrics such as the number and value of invoices awaiting approval, exceptions, spending by supplier, business unit, and more. Tying all actions of the invoice and recording them in a single solution enables AP Departments to have transparency like they’ve never had before. This information can guide decisions in all corners of an enterprise.
Imagine if AP could cover its overhead and return money to the business. It’s possible with AP optimization. Unlike legacy AP automation solutions with a singular focus on invoice processing automation, AP optimization takes an end-to-end approach to digitizing the AP cycle, including supplier payments. Electronic payments allow AP departments to free up cash by eliminating manual tasks and reallocating staff to higher-value activities. Businesses also can earn cash-back rebates on card spend – sometimes enough money to cover all the costs of an AP department and then some. While more traditional AP automation systems providers have electronic payment capabilities, only AP optimization solutions use predictive analytics and proprietary supplier enablement strategies to achieve best-in-class supplier adoption of electronic payments.
With optimization, AP departments can achieve the full benefits of digital transformation.
If your AP department is dissatisfied with the results of its automation efforts, it may be time to consider an AP optimization solution. A solution that combines advanced technology with industry experience and expertise in business process improvement for best results. No automated solution can match the touchless processing, fast turnaround, visibility, and cash-back rewards provided by accounts payable optimization.
Edenred Pay, an Edenred Company, is the global leader in invoice-to-pay automation. Our integrated platform connects businesses with suppliers, ERPs, banks, FinTechs, and payment rails to automate, optimize, and monetize the entire B2B payments lifecycle – from invoice receipt through payment reconciliation. Edenred Pay’s efficient, integrated solutions create a frictionless process and help deliver value to the enterprise by enhancing visibility and monetizing AP.