AP professionals are being called on to do more cash management analysis and financial forecasting than ever before, but they’re still handling the basic fundamentals of the job with manual tools.
Orlando, Florida (PRWEB) October 15, 2014
Accounts payable operations are seeing their invoice volumes increase, signaling improvements in revenue, but they’re not celebrating just yet. That’s because they’re bogged down in manual, paper-based processes instead of taking full advantage of automation.
Those are among the findings of the 2014 AP Automation Study by The Institute of Financial Operations, which surveys accounts payable professionals internationally every year about the use of the latest forms of technology.
“AP professionals are being called on to do more cash management analysis and financial forecasting than ever before, but they’re still handling the basic fundamentals of the job with manual tools,” said Ken Brown, the IFO’s executive director. “The good news is that executives at the highest level are becoming more aware of the efficiencies automation can bring to the process.”
Only about 9 percent of respondents reported that their operations are highly automated, which the study defined as receiving less than 10 percent of their invoices on paper. Three times as many (29 percent) said paper accounts for more than 90 percent of the invoices they receive.
Among other key findings of the study:
- Checks remain the most common payment method in business-to-business transactions, accounting for 50 percent of payments among the organizations of survey respondents — about the same percentage reported in the 2013 study.
- Electronic invoicing is keeping costs down. Of respondents who use this form of payment technology, 43 percent said their average e-invoice cost is less than $2, compared with 19 percent who have been able to keep their cost that low processing paper invoices.
- As the use of new technology grows, respondents are seeing decreases in error rates in their invoice entry and payment processes. About 40 percent cited decreases for 2014, compared with 30.9 percent a year ago.
- The process of data entry, validation, and approval for incoming invoices is taking less time. About 72 percent of respondents said it takes them five days or fewer. In fact, 10 percent reported it takes them less than a day, and 9 percent said it takes less than an hour.
- Optical-character recognition (OCR) technology is gaining ground. The survey shows an increase in its use to 38 percent, compared with 23 percent a year ago.
- The use of front-end scanning to extract data from documents has grown slightly in the past year. About 22 percent of respondents cited it, compared with 19.5 percent a year ago. However, the percentage of respondents who said their departments don’t use capture technologies remained unchanged at 25.6 percent since the 2013 study.
- Supply chain financing seems to be increasing in use. About 13.7 percent of respondents said their organizations have turned to this cash management tool, compared with 8 percent in 2013.
The study was sponsored by seven companies that partnered with the IFO because of their commitment to educating AP professionals about the latest best practices and resources available. The sponsors were ACOM Solutions, AOC Solutions, Direct Commerce, DocuSphere, Nipendo, OnBase by Hyland, and ReadSoft. Among their comments about the study and its results:
- “Although the adoption of automation has shown steady growth among organizations, a lack of sponsorship and conflicting business priorities still remain an impasse to wider acceptance of this technology,” said Warren Glick, Director, Corporate Marketing, at ACOM Solutions. “AP professionals have turned the corner in 2014, with a clearer understanding of manual processing and its effect on resources, productivity, and the overall cost burden to the organization. Successful companies need to be equipped with automation tools that come with a serious “hard cost” ROI. Tools that enable them to achieve their forecast and cash management goals, while enabling staff to move to higher value tasks. I think this year’s AP Automation Study really speaks to this.”
- “DocuSphere is delighted to co-sponsor the IFO AP Automation Study for the third consecutive year, because this study helps the industry to identify trends, establish business cases, and gain funding approval for accounts payable automation initiatives,” said Dave Litzenberg, Vice President, Sales and Marketing, for DocuSphere, a Tungsten Network Company. “As is consistent with the study results, we’re seeing strong demand for an integrated end-to-end accounts payable process which utilizes e-Invoicing, document capture/OCR, document imaging, automated workflow, and automatic matching.”
- “A growing number of organizations are realizing the critical role the supply chain plays in their ability to compete,” said Eyal Rosenberg, CEO and Co-Founder of Nipendo. “Removing inefficiencies from procure-to-pay processes is a necessary first step in establishing an agile extended enterprise that can be responsive to market demands. As the survey shows, while there is a gradual uptick in automation and efficiency, the opportunity for further improvement is immense. At some point, we are all going to look back at these survey results and think, ‘How could we do it that way?’ Those on the front end of the adoption curve will be better positioned for success in an economy that is rapidly becoming more global and interdependent.”
- “The results of the AP Automation Study clearly show the need to streamline AP processes,” said Tim Nero, Director, Back Office Solutions, at Hyland, creator of OnBase. “OnBase Accounts Payable Solutions enable organizations to maximize the time savings and cost reductions achieved by efficient and precise electronic invoice processing.”
- “The paper problem in AP is never more apparent to the C-suite than when a company springboards into a high growth mode,” said Bob Fresneda, Senior Vice President, Americas and Asia Pacific, ReadSoft Inc. “Taking on additional invoice volumes at record paces puts existing AP staff under strain and only spotlights pre-existing inefficiencies of manual processing. Luckily, invoice automation allows organizations to absorb growing invoice volumes with existing staff, while at the same time eradicating past manual processing setbacks through greater process control and visibility.”
About The Institute of Financial Operations
The Institute of Financial Operations is a membership-based professional association serving the entire financial operations ecosystem, with a particular focus on the accounts payable and accounts receivable disciplines and the related fields of information management and data capture. The Institute grew out of the merger of four associations: International Accounts Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the National Association of Purchasing and Payables (NAPP), and The Association for Work Process Improvement (TAWPI). Based in Orlando, Fla., with affiliates in the U.S., Canada, and the UK, The Institute serves as a global voice, chief advocate, recognized authority, acknowledged leader, and principal educator for people in financial operations. Institute members have access to benefits and leading-edge resources such as the award-winning Financial Ops magazine, a content-rich website, educational and networking events, online educational offerings, certification and certificate programs, career resources, and volunteer opportunities.
About the sponsors
ACOM Solutions is a complete family of integrated process, content management, and payment software designed to work with any ERP, financial, and business applications on multiple operating system platforms. With 31 years of experience and more than 4,000 clients worldwide, ACOM delivers high-value solutions including intelligent data capture, accounts payable automation, business workflow automation, document and enterprise content management, payment processing, and integrated EDI/XML. ACOM’s Commercial Payments Division specializes in creating and implementing best-in-class commercial payments platforms, solutions, and services that include AP automation, commercial card management and reporting, web services, vendor enrollment, payment processing, and credit card tokenization. For more information, visit http://www.acom.com.
AOC Solutions has a proven track record for providing results-driven payment solutions that support any buyer and supplier. AOC’s Commercial Payments Division specializes in creating and implementing best-in-class commercial payments platforms, solutions, and services that include accounts payable (AP) automation, commercial card management and reporting, web services, vendor enrollment, payment processing and credit card tokenization. To support global presence, AOC’s payments platform allows for multi-currency, multi-language, and respective localization. AOC can help organizations gain greater visibility into their business, increase security, reduce expenses, streamline processes, and, in some cases, generate revenue. For more information, visit http://www.aocsolutions.com.
Direct Commerce (DCI) offers procure-to-pay automation tools that include electronic invoicing, discount management, dispute resolution, workflow, and more over a secure web-hosted supplier portal. Direct Commerce solutions are easy to use, configurable, and deliver bottom-line savings. Renowned for its technical innovation, project execution, and premier customer service, Direct Commerce is the first choice for Fortune 1000 clients such as The Home Depot, Eli Lilly, Memorial Hermann Healthcare Systems, and many more. Free to suppliers, the Direct Commerce network supports thousands of companies submitting hundreds of thousands of electronic invoices adding up to billions of dollars per year in transaction volume. For more information, visit http://www.directcommerce.com.
DocuSphere, a Tungsten Network company, delivers its DocuSphere solution for accounts payable automation on a fixed-fee basis with standards-based, validated integration for Oracle E- Business Suite and JD Edwards, and SAP-certified integration. DocuSphere delivers standard yet configurable workflow processes for PO-based and non-PO invoices, automatic matching of invoices with POs and receiving data (two-way and three-way), and easy-to-use approval, general ledger coding, and exception handling. The system processes e-invoices received via direct integration with the Tungsten Network, and paper-based, emailed PDF and faxed invoices through intelligent capture OCR. DocuSphere is expandable beyond AP to other BPM applications. For more information, visit http://www.docusphere.com.
Nipendo provides a cloud-based platform for buyer-supplier collaboration that enables best-in-class procure-to-pay automation across the supplier ecosystem. By enabling real-time invoice approval and reconciliation, Nipendo empowers companies to optimize their working capital positions, accelerate cash conversion, capture early payment discounts, and provide access to supplier financing. Unlike existing solutions that require custom setup for each supplier connection Nipendo offers a cloud-based solution that facilitates rapid onboarding of suppliers. As a result, businesses are able to significantly expand the reach of electronic invoice processing across their supplier ecosystem, lowering cost while increasing capital efficiency and profitability. Nipendo Supplier Cloud is used by leading organizations across industries, including multinationals such as HP, IBM, KLA Tencor, Israel Aerospace Industries, Lilly, and Teva Pharmaceuticals. For more information, visit http://www.nipendo.com.
OnBase by Hyland Software
For more than 20 years, OnBase by Hyland has helped more than 12,900 lifetime customers by providing real-world solutions to everyday business challenges. OnBase®, Hyland’s enterprise content management (ECM) solution, maximizes the benefits of fast, efficient, and precise AP automation. Regardless of how documents are received — via fax, mail, email, EDI — OnBase captures and validates the relevant data and then delivers it to the appropriate individuals for review, approval, and coding, and seamlessly updates the client’s ERP or accounting system. With OnBase, users quickly access invoices, remittances, and supporting content, as well as make decisions, from the applications and devices that are most convenient for them. For more information, visit http://www.onbase.com.
ReadSoft simplifies business for organizations of all sizes with applications for automating business processes, including accounts payable, accounts receivable, sales order processing, document capture, sorting, and distribution. Created in 1991, ReadSoft has been a pioneer in P2P invoice automation, enabling companies to improve customer and supplier satisfaction, increase operating efficiency, and achieve greater visibility into business processes. ReadSoft’s automated solutions integrate seamlessly with many ERP systems such as SAP, Oracle, and Microsoft. Today, ReadSoft delivers industry expertise and support to 12,000-plus customers in 17 countries on six continents through its local and global partner network. For more information, contact http://www.readsoft.com