It’s already widely accepted that paper-based processing procedures are too slow, too labour intensive and ultimately too costly. The modern business world demands greater efficiency in every department – and there are no signs of this trend relenting. So, making 2021 the year of the paperless Accounts Payable department could be the most critical investment your business makes.
Of course, cost and time efficiency have always been important, but companies cannot afford to fall behind the competition. The bottom line is still the critical concern, and slow procedures have the potential to injure that severely.
Statistics show that switching to a paperless office is good for the environment, but the move is equally good in more practical respects, such as cutting overheads and reducing human error.
Adopting a paperless Accounts Payable Department, therefore, is set to deliver benefits across the board. But how significant can these benefits be?
Benefits Of A Paperless Accounts Payable Department
Here’s a look at the top five benefits of automating your accounts payable process:
The traditional processing method typically involves several paper-handling stages, from collating invoices from different sources (email, post and fax) to entering them into the ERP and from retrieving purchase orders to getting the necessary approvals. But automated Accounts Payable software allow companies to dramatically reduce the length of time the whole process takes.
A study by Aberdeen Group found that invoice processing can be cut dramatically, from an average 20.8 days to just 3.8 days and increase the number of invoices handled per day from 100 to a staggering 3,000.
With so many stages involved, a paper-based Account Payable system leaves you vulnerable to the wrath of human error. It stands to reason when so many stages include paper documents physically changing hands. Documents can be misplaced, misfiled and even inadvertently destroyed due to simple oversights.
However, in an instant, invoice automation software severely reduces the likelihood. A survey carried out by Sterling Commerce revealed that errors in invoice processing had fallen by 37% when the paperless system was in place.
With so much paper consumed, and so much time spent by staff handling it, the overheads grow. And the costs can be significant; so much so that, for 63% of AP managers, reducing the cost of processing invoices was a top priority in 2017 according to Ardent Partners report.
According to Sterling Commerce, paper invoicing costs between $12 and $30, depending on the process adopted. When it comes to paperless Accounts Payable system costs, however, they cost just $3.50 per invoice – that’s a saving of up to 90%.
It’s the bane of all Accounts Payable departments but having everything in order in time for a tax audit is crucial. When paper documents are being handled, this is a nightmare period. However, because of the relevant data is calculated and stored and the whole paper-trail is tracked all of the necessary data is easily accessed in moments. So, the likelihood of facing tax audit fines is vastly reduced too.
Between collecting, categorizing, copying, processing and storing paper invoices, the paper mountain can become almost K2-esque quite quickly. Research from Kyocera says the average UK office worker uses 45 pages of paper every day. With an estimated 25 million office workers in the country, that makes for a staggeringly high amount of paper use.
By switching to a paperless Accounts Payable process, a business can dramatically reduce paper consumption and with it lower the cost of paper purchasing, support the environment and win the office clutter war.
There is no doubt that every business needs to minimize costs and maximize profits; it’s the very nature of the beast. But with the pressure now so acute to achieve full efficiency, switching to a paperless Accounts Payable system is one of the most effective ways of doing so.
Click here, to find out more about how we can help you make the switch to a paperless Accounts Payable department.