ActiveWorx's innovation and leadership in the business process automation space go back to the beginning when it started as a consulting company. For the past eight years, we have focused on the financial automation space because we saw a massive opportunity for all types of companies to improve their systems and processes. In that time, I have seen how incredibly valuable accounts payable automation really is for organizations of all sizes.
The benefits of accounts payable automation truly go beyond AP departments to benefit every area of the business. With the vision of more companies benefitting from these possibilities, my team and I have set the goal to become the leaders in financial transaction automation and digital transformation for Fortune 5000 companies.
I recently had the opportunity to speak with Lance Adams, Digital Business Automation Specialist at IBM. We discussed the opportunities for AP automation in government and how agencies can benefit from this technology. Check out the YouTube video below to see our conversation:
Benefits of Accounts Payable Automation for Agencies
More agencies are adopting automated accounts payable solutions and for good reason. Automating AP increases efficiency across all business areas, improves vendor relations, simplifies supply chain management, and gives your organization better compliance posture.
- Increased Efficiency
Many AP departments currently rely on their ERP (enterprise resource planning) system alone to track information and document touchpoints. However, many manual steps must take place before an AP transaction even enters the ERP. For example, teams have to manually sort mail, route different invoices to the correct people, and enter information into the ERP. These processes are time-consuming and can result in expensive mistakes, like lost documents.
- Improve Vendor Onboarding
Most AP departments note that their master vendor list is unorganized and therefore less valuable than it could be. AP automation platforms may offer a vendor onboarding process to register new vendors and automatically check for duplicates. ActiveWorx can even check with USPS to ensure the correct vendor address is on file. In addition, we can file critical forms, like tax documents or change of address requests. This saves a lot of time and effort and ensures information is always up to date.
Additionally, the ActiveWorx platform offers background checks on all vendors that are added to the master list. This is especially important for agencies, who may need to know if a vendor is cleared for projects relating to government bodies.
- Accident and Fraud Prevention
Manually matching invoices is an incredibly laborious process, and it's impossible to ensure mistakes never happen. Even a small oversight can result in enormous losses for the business. Beyond honest mistakes, like a PO field with an extra zero, fraudulent charges can also easily go unnoticed. The ActiveWorx system matches the invoice to the open PO record to prevent mishaps. More importantly, it tracks the amount left on the PO and notifies someone if an overage occurs.
Another exciting innovation of the ActiveWorx platform is straight-through processing. It uses AI to "learn" what kinds of invoices are common and allow them to pass through. If an invoice falls within a specific range, it can be paid without human review. Most importantly, the system can detect when an invoice is inconsistent or above a certain threshold and flag it for human review. Under this system, human-touch and machine learning work together to cross-check and prevent mistakes.
- Prevent Supply Chain Impacts
The ActiveWorx communication platform gives vendors 24/7 access to the status of their invoices, preventing unnecessary calls and research time. This gives both parties peace of mind. Additionally, because the platform helps ensure suppliers are paid on time, it improves vendor relationships. As a result, AP departments understand how valuable a good vendor relationship is to preventing supply chain disruptions and delays.
- Better Compliance Posture
Most AP departments are concerned about the potential impact of an audit. Quickly finding documents that may be years old is undoubtedly stressful, but an AP automation platform makes it easy. The platform keeps track of all documents and touchpoints, so you're always prepared for an audit.
Getting Started with Accounts Payable Automation
Many organizations don't realize that implementing an automated AP solution doesn't have to cause business disruptions. These solutions can work complementary of your existing ERP and can be implemented using a phased approach. I see examples of companies that immediately benefit from seemingly small changes every day.
For example, before automation, a company that receives AP invoices in its manual form and enters data manually could have a cycle time between 30 to 45 days before it actually gets ready to pay. This is because it might be sitting in somebody's email inbox or physically on their desk. There is no insight into these liabilities. With automation, we can get cycle time down to five days. You may not pay in five days, but the invoice is ready for payment in five days, and you can take advantage of the terms without worrying about missing details.
I have also seen drastic cost savings almost immediately. For example, the cost of processing a single manual invoice can range between $15 to $17 per invoice. For an agency that's processing 30,000 invoices a month, this gets extremely expensive. Automation can lower the cost per invoice to $2.
Additionally, AP automation gives organizations increased negotiating leverage. For every supplier, agencies are negotiating discount terms that are based upon the turnaround of payments. With a long cycle time and no visibility into those transactions, AP departments may miss discount structures. Consequently, they're paying full price because they didn't process it in time. These costs can add up, especially for large agencies.
More companies are leveraging the power of AP automation to streamline processes, improve compliance, and boost the bottom line each day. So if you're ready to get started, send me an email and let's talk about your AP challenges!