New research from The Aberdeen Group suggests that the best in class companies for efficient accounts payable (A/P) processing apply 5 top strategies to their AP business process.
64% of the best in class companies in their recent research paper entitled “Invoicing and Workflow: Integrating process Automation To Enhance Operational Performance” all cited their key strategy as “invest in automation of invoice receipt and workflow process”
39% of the best in class companies identified a second key strategy of “conducting assessments of the A/P capabilities” and 29% specified “integrate Payables with back end systems”
The benefits of adopting these key strategies within the A/P function were interesting too.
Key benefits of an efficient A/P process is the cost of processing a supplier invoice, the best in class companies recorded an average cost of $3.09 and were processing invoices within 3.8 days. The laggards in comparison found an invoice costing them $38.77 to process and that this took in excess of 20 days.
This time delay on supplier invoice processing meant that the best in class companies were able to capture 31% of available early settlement discounts, twice the level obtained by the laggards in the report.
A saving in management time was also recognised as a key benefit from efficient A/P processing. The laggards in the survey experienced a 30% exception rate of supplier invoices being flagged for management, nearly 3 times the rate experienced by the best in class companies.
Invoicing and Workflow: Integrating process Automation To Enhance Operational Performance was compiled by Scott Pezza a research analyst at The Aberdeen Group and is available for download from their website for a limited period.
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