Cost and Time Savings are Top Motivators for Adopting AP and AR Process Automation Technology
Research from AIIM and ASG Software Solutions indicates that despite these benefits, almost half of all users haven’t implemented a solution, and many overlook the major benefits of integration with a content management solution
NAPLES, Fla. USA /
Monday, March 26, 2012
ASG Software Solutions (ASG), a recognized innovator in enterprise IT and business software solutions, today announced the availability of a research report that examines the automation of accounts payable (AP) and accounts receivable (AR) processes by businesses, including user feedback on shortcomings experienced, financial returns and benefits achieved. The “Automating Financial Processes – user feedback on the real ROI” report also investigates how a company’s wider content management strategy can broaden the single-point AP process, and how this model brings benefits to the AR process. The report’s findings are based on a recent survey of AIIM community members.
Traditional AP processing can be timely and costly, with an average cycle time of 10-20 business days for written invoices. For AR departments, manually inputting documents can be associated with higher Days Sales Outstanding (DSO), which leads to longer collection periods for money owed. In today’s IT environment, the ability to maximize performance through cost-effective solutions is driving the adoption of AP/AR automation. Supporting this claim, 56 percent of those surveyed cited reducing invoice costs as the leading driver of adoption, while 53 percent of users cited decreasing cycle time as most important.
“Today’s IT environment is demanding and IT managers are constantly tasked with finding ways to reduce overhead and streamline processes, so it’s not a surprise that cost and efficiency rank the highest in terms of drivers of AP/AR automation,” said Doug Miles, director market intelligence for AIIM. “We’ve found that for a lot of companies, moving to a paperless system for AP and AR processes can lead to rapid and substantial cost savings, along with improved visibility and simpler approval systems.”
Taking into account several factors, including the number of invoices processed, AP managers can determine the direct cost savings of their IT systems. Users reported an average savings of 33 percent, with over a quarter of organizations reporting a cost-per-invoice savings of 50 percent. For businesses processing an average of 5,000 invoices per month with an average cost of $10 per invoice, a 33 percent savings is equal to approximately $200,000. Despite this, only 52 percent of those surveyed reported having an automated AP system. AR adoption sees a similar trend, with only 51 percent of users reporting dedicated AR systems, despite payment collection’s importance to the health of the business.
“Keeping in mind the importance of payment processing and collection to the vitality of a business, it’s critical that all IT and finance managers evaluate the viability of AP/AR solutions for their individual company, taking into account a variety of factors,” said Erin McCart, director of solutions marketing, ASG. “We recommend all companies evaluate the costs and time associated with their current processes, in addition to the amount of invoices they file each month and the difficulty associated with each. For companies already investing in content management systems, IT should determine whether they have the ability to integrate their AP/AR systems into their environment.”
Additional Key Findings:
- The median cost per invoice to process is $9. Half of respondents are processing 5,000 or more invoices per month.
- The average estimate of the additional cost factor to process non-PO or non-production orders is 2.6 times higher than traditional orders. On average, 30 percent of invoices are non-PO, non-production or non-goods.
- For AR, 26 percent estimate they are losing 3 percent or more of invoiceable income due to short-payments, late payments, out-of-time discount claims, tax disputes, contract disputes and unrecoverable debts.
- Better records and reduced time spent on collection are ranked as the two biggest benefits of using an AR system.
- For both AP and AR nearly 70 percent of respondents admit that original supporting documentation is not easy to find.
To view the “Automating Financial Processes – user feedback on the real ROI” report and research results, please visit: http://bit.ly/GSpRRr
The industry research included in this report will be discussed during an educational webinar sponsored by ASG and hosted by AIIM on March 28, 2012. During the webinar, AIIM’s director of market intelligence, Doug Miles will identify the benefits of automating invoice procedures, and explain why efforts to improve the business processes around handling transactional exceptions can sometimes increase resources and costs in complex environments. To pre-register for the webinar, visit http://bit.ly/yx3VpS.
For more information on ASG Software Solutions please visit:
- ASG Software Solutions On the Web
- ASG-ViewDirect for AP/AR Automation On the Web
- ASG Software Solutions On Facebook
- ASG Software Solutions on Twitter
About ASG Software Solutions | www.asg.com
A recognized innovator in enterprise IT and business software solutions, ASG Software Solutions has been optimizing 85 percent of the world’s most complex IT organizations for over 25 years. We create and deploy unique software solutions that reduce cost, mitigate risk and improve service delivery throughout the IT lifecycle. ASG’s comprehensive solutions help you solve today’s challenges, such as cloud computing and big data, while driving your business forward by providing insight and control across cloud, distributed and mainframe environments.
Natalie Hahn O’Flaherty
ASG Software Solutions