Technology is getting smarter and smarter, which is making companies more efficient, agile and competitive. We have artificial intelligence, machine learning, robotic process automation and more tech-savvy buzzwords that are digitizing workplaces and automating tasks that we never dreamed could be automated. Most automation efforts start with accounts payable, as this department has historically processed the most paper and typically has the most manual procedures.
But although AP departments are destined for greatness when their processes are automated, there are still some challenges holding many AP departments back from becoming best-in-class. We partnered with Ardent Partners and examined some of the top challenges holding back today’s accounts payable teams.
- The top challenge at 62 percent is the high percentage of exceptions, which slows processing down and creates bottlenecks, leading to less efficiency and effectiveness.
- The next biggest challenge at 51 percent is lengthy invoice approval times, causing late payments and fewer (or no) early-payment discounts.
- Forty percent said their biggest challenge was “too much paper,” which is clunky, inefficient and not particularly secure, especially in the case of natural disaster.
- The amount of time that the average AP staffer spends handling supplier inquiries is also a large problem. While the amount of time has decreased from 2019 (from 24 percent to 22 percent), the average AP department still spends nearly a quarter of its time addressing inquiries. Additionally, some AP departments (15 percent) are spending more than a third of their time dealing with suppliers.
- Some AP departments are still experiencing a lack of spend management. In fact, 40 percent have no spend management automation in accounts payable, and only 3 percent are considered to be “heavily automated.”
- While we’ve finally surpassed more than half of AP departments paying invoices electronically, we are still seeing 45 percent of accounts payable teams paying invoices manually. But progress is progress!
- The average number of days it takes to process an invoice? Not one, not two, not even five, but eight (8.3 to be exact).
- Invoicing still isn’t a streamlined process for many AP departments. In fact, only about 25 percent of all AP departments in 2020 are processing invoices straight-through.
- It’s important that AP departments are able to link invoices with their accompanying purchase orders, however, only 50.3 percent of AP departments are able to link invoices with POs in an automated fashion. Instead, they are having to manually search for the matching PO.
While we are seeing progress in many areas of AP due to automation technology, there is always room for improvement. Stay tuned for upcoming blog posts where we’ll discuss the future of accounts payable and AP technology. Want to learn about how MetaViewer Paperless Automation can fill the gaps that are currently in your AP department? Head over to our website or catch a complimentary webinar!