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Accounts Payable organisations are charged with simultaneously reducing costs, improving performance, achieving regulatory compliance, increasing visibility and enabling the corporation's strategic initiatives. Not only do these goals conflict at times, they compete for the same resources, limiting AP's ability to accomplish them. Many technologies have been applied to the Accounts Payable process, including financial management systems (ERP), capture, intelligent document recognition, EDI, e-Invoicing, workflow, and the cloud. But industry experts agree that substantial benefits remain to be realised through an end-to- end invoice and AP process automation that these technologies have not delivered.

SCOPE OF THE AP PROCESS
An automated Accounts Payable process is essential to the health of the enterprise. Many attempts at AP automation falter because they fail to address the true scope of the AP process, so let's take a moment to agree on the nature of the challenge:

1. Large volumes of transactions arriving in different media and formats. The typical organisation lives the nightmare of 80% paper invoices, but the remaining 20% come in all shapes and sizes - EDI, XML invoices from supplier networks, fax, email attachments, etc.
2. Challenges in identifying the right data to extract and enter in the financial system of record. No two invoices are alike. Is this a recognised supplier? Which site? Are there line items? Where is the invoice number? Is there a purchase order number? Does it match with the ERP? Does it all enter successfully into the ERP?
3. Discrepancy resolution and approval workflows that reach to the edge of the organisation, and the need to ensure the highest integrity. Were the goods received? Is the price discrepancy approved or sent back to the supplier? Does the user have the authority to approve the invoice? Will it be charged to the correct cost accounts?

The seemingly simple process of AP in fact is intricate and complex. Still, the benefits of addressing this intricacy and complexity with the right automation are clear and compelling, as we'll explore in this fresh look at seven reasons to automate AP.

ONE: IT'S A GOOD INVESTMENT
Accounts Payable automation's attractiveness as an investment is well documented. In a straightforward example, the Aberdeen Group's May 2012 report, 'P Invoice Management in a Networked Economy' measures efficiency leaders at less than $2 to pay a bill, while the majority pays $6 - $25 or more, indicating available savings of more than $40,000 for every 10,000 invoices annually in most organisations. How can the majority resist the attraction of investing in technology that pays for itself? Creating your own business case for change in how you do AP is a good starting point - there is enough evidence to give you confidence that your case will be compelling.

In addition to the reduction of personnel costs for the capture and entry of invoice data, organisations also benefit from self-service supplier interactions, a reduction in duplicate invoices, increased discount capture, and the elimination of late payment penalties.

So where should you look when estimating the benefits that can justify your investment in end-to-end AP automation? Here are some of the common areas that yield the greatest return:

• There is great value in a single, consistent, automated process for all types of invoices, paper and electronic. Without this technology, organisations rely on different processes, managed by different people, with different methods of viewing and interaction.
• The capture, extraction, validation, and entry of invoice data automates the most painful part of the process. This is where errors multiply, where delays occur, and where the headcount costs are visible. It is universally viewed as a low-value activity.
• Automated purchase order matching removes low-value work from the outset. Successful matches result in straight-through processing.
• Workflow for discrepancy resolution and approval is the heart of the process. It engages all employees, so it has to be easy to use. It requires complex tasks, such as ensuring valid accounting codes and enforcing approval limits and hierarchies. This is where segregation of duties must be embedded, and where fraud can be trapped.
• A self-documenting audit trail removes the painful task of supporting audits and responding to inquiries.
• The real-time status of all invoice liabilities, alerts and escalations bring focus on priorities before others notify you. It positions AP to perform a fast period close.

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