SAN FRANCISCO, Nov. 14, 2018 – While digital transformation is top-of-mind for business executives across the country, new research reveals there’s a key area that many C-level executives are ignoring—and this “blind side” could have weighty implications for businesses moving forward.
In a recent survey, 93% of Accounts Payable staffers found fault with their existing AP processes. In contrast, half of all top executives with the title of CEO, owner, founder, president, or managing partner, said they believed their AP current processes “work just fine,” negating the need for innovation.
The research, conducted by PayStream Advisors, surveyed over 400 employees across several industries and market segments to evaluate trends in payables management in North American enterprises. Companies handle millions of invoices annually in their Accounts Payable departments to pay vendors for goods and services.
“The research is very eye-opening,” said Chris Preston, Chief Strategy Officer of Inspyrus, Inc. “There is a vast gap in perception between C-suite executives versus AP staffers who have hands-on experience doing the work of AP processing, and it appears top executives are clearly far removed—if not out-of-touch—with the day-to-day challenges in the world of the AP professional.
“While companies are embracing digital transformation to disrupt how they do business enterprise-wide to eliminate tedious, time-consuming and costly processes, AP continues to be largely overlooked. As a result, organizations are completely missing out on the opportunity to leverage AP as a strategic tool to tap into the value of their payables to realize new and significant revenue streams,” said Preston.
In recent years, there’s been a tectonic shift in the AP function where technology is revolutionizing invoice and payment processing. Outside of enhancing velocity and transparency to support payment automation and dynamic discounting, this transformation is also creating new sources of cash—enabling organizations to reap immediate and significant returns from cash-back rewards and early payment discounts. This is transforming the Accounts Payable operation and function from a cost center to profit center by unlocking the hidden value in payables to unleash significant financial returns directly back to the organization.
“Organizations can save literally save millions through a combination of efficiency gains, cost savings and cash-back returns that come from combining invoice automation, payment automation, and dynamic discounting—along with direct supplier enablement,” said Preston, “however complacency around the AP function threatens to hold organizations back from attaining these break-through automation efficiencies and financial returns.”
Enterprises Can’t Hide from Their AP Pains
Top pain points identified by survey respondents who had not fully invested in AP automation were manual data entry and inefficient processes: 54% of respondents were plagued by having to manually enter invoice details into AP systems. Accentuating these challenges further, survey respondents cited these two areas as the top workflow processing challenges, along with lost or missing invoices, paper-based invoice processing, and manual routing of invoices for approval.
Interestingly, these same issues were cited as some of the top reasons why organizations miss early payment discounts. In particular, survey respondents noted lengthy invoice approval lifecycles (47%), along with challenges stemming from cumbersome invoice exception processing and routing errors—underscoring the old adage that time is money. This means that when invoices are not managed efficiently and processed in a timely manner, organizations could be missing out on significant amounts in potential early payment discounts and other cash-back rewards. Manual invoice management also leads to inefficiencies and issues that can harm supplier relationships, create risk, and compromise cash flow.
Business Transformation Success Through AP Automation
The survey results also offer compelling evidence of return on investment from AP innovation. When participants were asked about the improvement seen after adopting an ePayables solution, an overwhelming majority of organizations (82%) reported seeing noticeable improvement. Specific top benefits cited were reduction in paper invoice volume (66%), faster approval of invoices (62%) and improved visibility into unpaid invoices/liabilities (40%). In addition, more than one-third of those surveyed cited improved employee productivity and achieving lower processing costs. The group that saw the highest rate of efficiency improvement in AP was the segment that leveraged all AP management tools—electronic payments, data capture functionality, invoice workflow automation, eInvoicing, and supplier management tools.
When asked about the benefits AP organizations have achieved from epayment/commercial card programs, 60% of respondents cited increased convenience, and 55% cited rebates and incentives. Lower processing costs (50%) and reduced procure-to-pay cycle time (30%) were also cited. Depending on how much spend is captured using commercial cards, the research noted that rebates can potentially bring companies millions of dollars in savings, in many cases covering the cost of payables solutions.
Inspyrus Total AP Automation includes all the essential elements for payables processing by combining invoice automation, payment automation, dynamic discounting and supplier enablement into a single unified solution. It delivers superior levels of automation managing the entire process uninterrupted from invoice capture through to payment and reconciliation, and by seamlessly integrating in real time with all existing ERP systems from a single application. As a result, Inspyrus allows organizations to eliminate the burden on AP and IT resources, paper invoices, invoice exceptions, missed discounts, and processing bottlenecks—while dramatically increasing early-pay discounts, supplier adoption, and cash-back rewards.
Inspyrus is a Silicon Valley Fintech SaaS company that specializes in transforming Accounts Payable into a profit center. Our passion and mission is to provide the most innovative, game-changing solutions on the market, and solve business problems that other providers have failed to address. Inspyrus provides solutions for Invoice Automation, Payment Automation, Dynamic Discounting, and Supplier Enablement. Supported by several patent-pending technologies, Inspyrus provides out-of-the-box, real-time integration with leading ERP systems, including Oracle’s E-Business, JD Edwards, Peoplesoft and ERP Cloud Applications, as well as SAP and IBM. Our solutions are used by some of the most esteemed brands and leading-edge companies in the world, across various industries, ERP systems, and geographies—with environments ranging from 2,500 invoices/month to over 450,000 invoices/month, across 30+ countries and 18+ languages. To find out more visit: http://www.inspyrus.com.