Best Methods to Quickly Drive AP Cost-Effectiveness

You might be asking the question at this point, "What is the specific return on investment that I can get from automating various aspects of my accounts payable processes?" Glad you asked, here are the areas of improvement and associated ROI numbers:

1. Leverage the value of your ERP system

   Accounting systems are terrific at processing structured data (e.g. numbers and text found in a database), but not very good at managing unstructured data.

   Integrating an unstructured content management system like StylusAP can increase the efficiency of your ERP/accounting system by 5-20%.

2. Reduce labor resource requirements

   In most operations, labor costs represents up to 90 percent of total accounts payable spending. An efficient invoice processing system can not only vastly reduce the time necessary to process each invoice but can also reduce the time spent on associated tasks such as vendor inquiries and problem resolution.

   Although problem invoices represent only an average of 11 percent of all invoices (according to IDC), they may take up as much as 40 percent of staff time. Total reduction in labor savings can be 30-85%.

3. Get rid of the paper

   Automated systems require little if any storage, physical plant, paper, materials, postage and shipping costs. It is quite possible to virtually eliminate these items and achieve savings of 20-90%.

4. Decrease/eliminate overpayments and duplicate payments

   We talked earlier about the how erroneous payments are a serious issue. Solving this problem can get you a return on investment in your AP automation system of 10-30%.

5. Take advantage of early-pay discounts

   This is an area where smart AP professionals can influence the bottom line and become corporate heroes.

   In tough economic times, many companies are hungry for cash and are willing to give you generous discounts for early payment.

   Using automation to facilitate early payments can bring you a return of 50-200%.