Labour Cost Savings through Invoice Automation
Author: Sarah Cornish
You probably see evidence every day that your manual accounts payable processes are too slow and inefficient, and it may be obvious that invoice automation would dramatically improve productivity. However, before they spend company money, managers will want to see proof that, financially, automated invoice processing would be a wise investment. According to Zona Research most organisations who use invoice automation recoup their investments within six months. These are the main areas where costs will be reduced through invoice automation. Labour Payment speed Accuracy Storage costs Operations costs Additional benefits Staff cost savings through invoice automation The majority of the costs of invoice processing are related to labour. These include time spent: Receiving invoices Invoice-matching Sort and filing Inputting Printing, copying, faxing and posting Searching for misplaced invoices Resolving disputes According to the Institute of Management and Administration (IOMA), it costs companies with a low level of invoice automation 7 to process each vendor payment. Companies with a high level of automation report reducing this to around 4.20 a saving of almost 60%. Say your company spends 7 per invoice and processes 50,000 invoices a year, a 60% reduction through invoice automation represents an annual saving of 210,000. Many companies report seeing these savings in the first year of implementation. Invoice automation will mean that your company is able to produce invoices more quickly and accurately so youll also save money through a reduction/stabilisation in the number of staff you need to employ and a reduction in the need for temporary staff and staff overtime. What is invoice automation? Invoice automation solutions include software modules (or an option for an outsourced service) which provide: Invoice scanning Import of EDI invoice Extraction of header and line items PO and GRN matching ERP database data matching Nominal coding Routing and workflow approval Posting to the ER system Archiving Tax compliance Reporting About the Author:
DCS provides tailored solutions for invoice automation. We can work with you to identify what the potential savings/ROI would be on an invoice automation solution for your business.