In a survey released by APEX Analytix last month, 170 companies answered questions about their specific accounts payable (AP) policies and practices. The Financial Leaders’ Benchmarking Report shared insights into how much AP has transformed globally in the last few years, and where it may be headed.
First touching on invoice processing, the report showed that only 64% of invoices are processed electronically by the average organization, which was also reflected in the average cost to process invoices. Although processing costs did vary widely across industries, the overall average invoice processing cost is $3.01. At the upper end, invoices processed in the oil and gas industry tipped the scales at $8.14 per invoice, similar to Business and Consumer Services, which averaged $7.25 per invoice.
While those organizations surveyed were not yet all onboard with automated or electronic invoice processing, internal controls and compliance were found to be a high priority for the majority of respondents. Approximately 95% of organizations have internal controls and compliance function, and 78% take measures to enforce invoice coding standards. However, only 68% said they have a system in place to identify duplicate payments before payments are released. As we’ve talked about previously, internal controls and systems to identify potential fraud should be built into of every company’s AP workflow.
How those payable controls are set-up and enforced often comes down to the compliance requirements placed upon the company, as well as the types and volume of payments processed, but in almost all cases, the implementation of an AP automation solution will be an essential component. AP automation solutions, like Beanworks, typically include features that can restrict user access based on job roles, flag significant changes to sensitive information (like vendor banking details), and guide approvals through automatic routing channels. AP automation solutions will also, ideally, integrate with an organization’s enterprise resource planning (ERP) system or accounting software. However, APEX found that, for those organizations that do capture AP data through a supplier portal or third-party tool, only 17% can actually push that data directly into their ERP systems. Instead, the remaining 83% must manually enter the data a second time, introducing the potential for new errors and consuming resources and time.
Moving forward, organizations that have already jumped onboard electronic invoice and payment processing need to take the next step by implementing an AP automation solution that can seamlessly integrate with their accounting software. Similarly, those organizations that persist in processing their payables manually should think about the extra costs incurred through manual processing and how an AP automation solution can save them time and money.