It has been a tough year, and the pandemic forced many areas of business to adapt and change, including Accounts Payable and Accounts Receivable. The 2021 Payables Insights Report from Levvel Research surveyed over 300 professionals involved in or with knowledge of their organization’s payables process and delivers great insights to these challenges and changes. The respondents of the survey indicated that the pandemic highlighted the weaknesses of manual processing and paper invoices, and they are using this year as an opportunity to push towards AP automation.
Other resources you might find helpful:
The report shows that despite the economic slowdown due to the pandemic, many organizations’ invoice volume has either rebounded or did not change over the past year. Despite other changes brought about by COVID-19, AP departments have to process the same number of documents.
Depending upon the method of receipt, touching such a large volume of invoices affects invoice cycle time, exception rate, cost per invoice, and discount capture. According to the Levvel report and the image below, a whopping 34% of invoices are still received via paper; 26% by mail and 8% via fax. And while email makes up of 40% of invoices received, most email invoices are PDFs, and thus are not capable of being processed electronically and must still be digitized via OCR or an alternate method of conversion to e-invoice. Structured invoices—EDI, XML, and those submitted via supplier portal—are ideal methods for invoicing, but do not represent most invoices received.
Levvel Research also asked survey respondents how invoice information is typically captured. According to the report, both manual capture methods and AP outsourcing have decreased in popularity and software has gained mainstream adoption in 2021.
In terms of routing invoices, Levvel asked respondents what method is typically used to route invoices for approval within their organizations. Research has shown the three manual routing processes (scan and email, manual, and mail) have steadily decreased in usage over the past three years, with more organizations choosing to automate using an invoice workflow tool. With one of these tools, companies can set up processes where documents are directed for approval based on GL code, department, spend total, and cost center.
The Levvel research participants who were already using AP automation software were asked about the top benefits of AP automation. Many of the benefits to automating may directly address the AP challenges seen by organizations using a manual structure. According to the report, the top benefits to using AP software are quicker approval of invoices; reduced processing time, errors, and paper volume; and improved employee productivity. One in five responding organizations noted that the ability to manage AP remotely was one of the top benefits to using AP software.
As the Levvel report demonstrates, the time for AP automation is NOW. Make sure your company selects the right automation partner to lower operating costs, increase your efficiency, and enhance visibility into your financial workflow.