AP Automation Can Reduce Paper Invoices and Save Money and Environment

Mary Driscoll's picture

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.

2 Comments

WBechtel's picture

Hello Mary, out of my experience I can say that quite some companies shy away from talking to their suppliers in order to eliminate paper invoices. They believe that the business they are doing with their suppliers is too small and hence it's not worthwhile to pursue a time and cost saving improvement. But as most companies have streamlined their core processes in logistics and manufactuiring they need to also look at their back office. It doesn't take too much but I believe it's worth the effort.

Mary Driscoll's picture

Yes, your recommendation is quite sensible, especially given that operating models are in constant flux when a company is pursuing growth through acquisitions. A neat and streamlined logistics process on one side of the business is all well and good but the billing and collections function may be constrained by a bevy of new acquisitions rely on a range of systems and procedures. Three steps ahead, two steps back!

Mary Driscoll APQC Senior Research Fellow mdriscoll@apqc.org