The ROI of AP automation

AP automation: By the numbers

• Ardent Partners’ study of large, mid-sized and small organizations showed that the average cost to process an invoice was $10.18. The figure, which includes labor, overhead, technology and other factors, marked a 10% increase in a year. Organizations that were deemed “best in class” spent an average of $3.12 to process an invoice — almost 70% below the norm.
• The average time to process an invoice, meanwhile, was 10.9 days. Best-in-class enterprises did the deed in just 3.7 days — a 66% improvement.
• The research also found that best-in-class AP departments spend 15% of their time responding to inquiries. The average for all others was nearly twice as high — 29%.

Top benefits of AP automation

The State of Finance Automation 2024 Report by BILL also generated numbers that should stand out for any IT worker who is hoping to get executive buy-in on technology upgrades.

Asked for input on the benefits of AP automation, 750 finance leaders listed the following as the most impactful:

• Significant time savings in processing AP: 35%
• Better visibility into cash position and cash flow: 29%
• Helps close the books faster: 28%
• Easier to create regular and ad hoc reports: 27%
• Reduces the number of late payments and penalties: 27%
• Streamlines the approval process: 26%
• Better control: 24%
• Reduces headcount required for this function: 23%
• Improves vendor relationships: 23%
• Reduces costs: 20%
• Reduces inquiries from vendors: 20%
• Fewer errors: 18%

Automating AP with Hyland

Hyland offers an end-to-end AP automation solution that is built on our enterprise-class OnBase platform.

Reduce paper dependency and decrease manual work

The solution leverages intelligent data capture and workflow automation to capture paper and electronic invoices and extract necessary information. Users can quickly access invoices and supporting content, as well as make decisions, from the applications and devices they work in every day, minimizing training. Workflows automatically route documents and information to appropriate business units, perform two- or three-way matching and post to accounting applications — notifying stakeholders along the way.

Increase visibility into processes and real-time data

Staff can access, review and approve invoices or input additional data directly from the most convenient place — whether it’s their accounting system, ERP, email or mobile device. A real-time dashboard provides visibility into the status of invoice processing, helping leaders identify bottlenecks and adjust workload distribution.

Improve control and tracking with consistent processes

Whether using an on-premises or cloud-hosted solution, you have the tools to ensure consistent record-keeping while guaranteeing the right information is available to the right people. You can also automate document retention in a secure system, provide consistent disposition and immediately respond to exceptions and audit requests. By providing access to real-time information, consistent processes and the ability to grant auditors web-based access to documentation, you can significantly reduce the time it takes to prepare for an audit.

Deliver digital AP services to vendors and suppliers

Hyland’s intuitive content portal allows vendors to submit invoices and view payment statuses, and mobile access makes approvals faster and easier for remote employees. Vendors and suppliers can access and submit documents whenever, or from wherever, they need to, reducing manual processes and increasing efficiencies while extending the value of your existing technology.

Components of Hyland’s AP automation solution

Capture and optical character recognition (OCR)

• Scan invoices as they come into your organization or import invoice images via email, fax, file shares, etc.
• Minimize data entry using OCR, intelligent character recognition (ICR) and barcodes
• Classify documents based on content to reduce manual sorting
• Extract field and line-item data without templates, keywords or scripted rules
• Match invoice data to back-end information
• Automate general ledger coding for non-PO invoices

ERP integration for data validation and exchange

• Integrate with any core ERP application, including Deltek, Workday and SAP
• Quickly retrieve invoices, goods receipts, packing slips, check images, vendor contracts and even historical correspondence directly from the ERP screen with a few clicks

Workflow automation and approval processing

• Digital workflows integrated with the ERP or other systems automatically route invoices for issue resolution, review and approval, notifying approvers via email or mobile where required.
• Create custom workflow processes to fit unique organizational or regulatory needs. AP managers can modify workflow rules and delegate new approvers without IT support or coding.
• Automate predictable decisions throughout the transaction life cycle, such as invoice approvals of a certain amount. This minimizes the number of touches per invoice and increases efficiency.
• Automate key AP processes, including two- and three-way data matching, approval and exception routing.
• Data errors and exceptions such as missing information and PO mismatches are immediately identified and routed to reviewers for quick resolution.

Document management

• Securely store invoices and related AP documents in one central location, reducing the time spent searching for content while increasing security and supporting compliance initiatives
• Access documents on- or off-site through web, mobile and email applications
• Easily index and search for vendor purchase orders and associated documents based on assigned metadata and keywords
• Reduce the time spent preparing for audits by quickly generating reports to identify missing documents
• Ensure the security of vendor information by controlling who has access to the AP system and what they can do

Performance and reporting

• Provide real-time insight and analysis into capture processing with immediate access to metrics and key performance indicators
• Access metrics that show extraction rate accuracy for every document, offering insight into overall performance and which documents should be recaptured or reviewed manually
• View reports that increase visibility into invoice volumes, status and process bottlenecks
• Present data in a variety of formats, including charts, graphs, scorecards, gauges, maps and more

How we can produce a seven-figure ROI

Hyland evaluated the AP processes of a major operator with hundreds of chains in the U.S.

The analysis showed that the company’s current cost per invoice was $8.81. By automating its AP processes with Hyland, it was estimated that the company’s average spend per invoice would be $2.43 — a 72% savings.

The company’s average invoices per FTE per day was 20.17. With Hyland’s end-to-end AP automation, it was estimated that the production would increase 268%, to 74.24.

The five-year total benefit and return on investment: an estimated $4,112,120.

(The estimated five-year total savings was based on anecdotal information gathered from customer-supplied documentation, meetings and onsite interviews. Assumptions include demonstrated averages based on key benchmarks and industry reports, as well as historical experience and knowledge deploying Hyland solutions. Validity of calculations is dependent upon the accuracy and completeness of information provided by the customer.)

Process improvements with Hyland

Data capture

• Scenario: All invoice header and line-item data is manually keyed by staff.
• Opportunity to improve: Implementing Hyland intelligent capture technologies can provide OCR data extraction from invoices, significantly reducing the number of keystrokes performed by AP staff.

Approval routing

• Scenario: Routing and approvals aren’t automated and require several manual steps by AP staff and other contributors.
• Opportunity to improve: Hyland’s workflow approval manager will assist in streamlining and automating the approval processes.

Invoice exception resolutions

• Scenario: Staff incurs longer processing times and/or rework in posting invoices due to exceptions that aren’t discovered until they attempt to post them.
• Opportunity to improve: Workflow capabilities will allow for automated validation, routing exceptions to those who need to review or research the information, allowing for quicker resolutions with less effort.

ERP integration

• Scenario: AP staff manually posts data to the ERP for every transaction.
• Opportunity to improve: A full ERP integration removes this step from the process.

Data validation issues

• Scenario: Any processing and approval performed before posting to the ERP lacks the ability to compare invoice data to accounting data in the ERP system.
• Opportunity to improve: With a Hyland integration, ERP data can be leveraged in all phases, including data capture and quality assurance, routing, approvals and exception handling.

Paper processes

• Scenario: Remote locations are forwarding paper-based invoices to a central AP location for processing.
• Opportunity to improve: A distributed document capture of invoices reduces the time invoices spend in transit and cuts down on any associated costs.

Value-add software and services

• AP Invoice Approval App: This persona-based, add-on application delivers critical decision-making tasks to individuals with invoice approval responsibilities.
• Vendor portal: This self-service portal allows vendors to submit invoices, W9s and other documents.
• AP Processing Rules: Part of the OnBase AP automation solution, this provides additional automation capabilities through a set of configurable rules that help reduce data entry on non-PO invoices.
• Robotic process automation (RPA): Hyland’s AP automation solution can be integrated with Hyland RPA, which can create new vendors, route invoices for review, manage exceptions and extend other key processes.