Some companies’ accounts payable (AP) functions spend 30 percent more than necessary on labor costs. That’s because they are drowning in paper invoices that must be processed by hand. Typically, documents have to be fed into a scanner that feeds into a software program that recognizes and sorts data. Short of that, information must be manually keyed into a system. In an article that I wrote recently for TechTarget, the online publisher of information technology websites, I used metrics from APQC’s Open Standards Research database to illustrate the root causes of soaring costs in payables processing.
No wonder we are seeing more organizations now considering an array of relatively new technologies and third-party services that digitize paper invoices and move the resulting “e-invoices” through proper channels. These tools include automated data capture solutions such as optical character recognition or intelligent document recognition, which captures hand-printed information as well as machine-generated data. Also gaining appeal are electronic workflow solutions that are used to speed and track the routing of invoice data for approval by authorized personnel before payment can be made. The software will pester the approvers who drag their feet. For further APQC research on this trend, go to our collection of relevant articles on electronic billing and payments processing.