A recent study concludes that nearly 70% of businesses still rely on a physical mail delivery of invoices, purchase order and payment by cheque. This cost burden continues despite the growing knowledge that processing a paper invoice in volume is time-consuming of staff resources and costly to maintain. The average cost of processing invoices per paper invoice can be as low as $4.00 Per to $25.00 Per depending on complexity endured during the payment approval matching process. The reasoning for better, quicker, and easier ways to pay suppliers and avoiding long cycle times is explored. (Image is by paid subscription from Dreamstime.com)
Benefits of Implementing a Digital Procurement to Pay Platform: This is the sixth post in a continuing series exploring specific solutions available to the many business process problems identified under the general heading of AP Problems. The first post in this series is AP Problem #1: High Defect Rates here.
AP Problem #6: Long Cycle Times Create Ongoing Efficiency & Financial Loss Potential
If you are prone to snapping your fingers in front of a microwave oven because you are growing impatient for the wait-to-eat time to finish, then sending and receiving physical mail invoices is going to put you into frustrating spasms of pain.
Yet, a recent study of SMBs in North America concluded that 70% of businesses are still using the physical mail envelope for invoicing their clients. As a result, these businesses are still processing large volumes of payables paperwork manually. This monthly process consumes a massive amount of time consumed by staffing resources and creating a cost drain burden on profitability.
In the age of microwave meal cooking, some businesses are still breaking the postman’s back by sending purchase orders, invoices and checks back and forth using snail-mail. The result is unnecessarily long cycle times in accounts payable, as well as decreased productivity in the AP department, along with the resulting credit issues caused by missed deadlines on required payments. Often these critical payment deadline misses can mean missing out on an available supplier discount that helps reduce the operating cost of the business operations.
The actual cost factor of processing paper invoicing is staggering.
The actual cost of manually processing paper invoices is estimated to range from $4.00 on a good day to upwards of $25. Per invoice when matching paperwork verification from multiple sources is requires. The costs quickly add up to significant money total with businesses that are processing +/-10,000 invoices per month.
Yikes, the cost of paper invoice processing numbers begins to add up to a lot of money lost to inefficiency. With a completely digital process, the cost of invoicing falls below $2.00 per invoice as recent time costing studies suggest as a target cost.
The definition of inefficiency in accounts payable is long cycle times, which are a direct result
of paper-based invoicing, payables processing and payment to suppliers by cheque-in-the-mail practices.
Consider a different solution for reducing to minimal the long accounts payable cycle times. Consider automating your accounts payable with SnapAP’s paperless procure to pay system.
SnapAP automates every aspect of your purchasing process, from internal Order/Requisitions to external Purchase Orders(POs), and to fully automated Supplier Invoicing with global-ready, timely payments sent as Electronic Funds Transfer (EFT), for maximum efficiency. The elapsed time for suppliers enhanced your business supply chain relationships as everyone wants to be paid faster.
Cash flow for the purchaser and the supplier is king.
With SnapAP’s enterprise-proven AP automation software, you’ll achieve the following for your business, including:
- drastically reducing your accounts payable cycle time;
- immediately creating better relationships with your key suppliers;
- reducing less frustration with internal staff members; and,
- delivering an increased sense of clarity and productivity overall.
Instead of measuring invoice processing time in weeks or days, your cycle time will be completed in mere minutes. The gain in time efficiency will allow you, and your AP staff more time and attention to other tasks.
The answer to why choose SnapAP for your solution implementation is mostly the benefits provided by SnapAP in being fully customizable and adaptive to your business process. SnapAP’s Procure to Pay platform is a complete digital platform offering an end to end solution for maximum efficiency and effectiveness as an AP automation solution.
The best part of SnapAP is that it is a snap to learn and use by your AP team.
During implementation, we assist you with supplier onboarding to our platform that speeds implementation. Your suppliers get a convenient login portal to help them manage their relationship with your business and your relationship with each individual supplier. Big bonus and included in your subscription.
Another big benefit to customers is that over ten years of customer input from large enterprise-level clients, the SnapAP procure to pay process steps are natural in their workflow and are easy to follow at the staff level.
Think of SnapAP as the microwave of accounts payable. Ready when you are and a quick, proven method of decreasing your accounts payable cycle times forever.
Enhance your purchasing process by visiting SnapAP Procure to Pay to learn more about SnapAP’s paperless accounts payable system.
SnapAP offers a no-obligation Calculate Your Savings calculator submission form that may help you assess your decision to enhance your AP with automation and transparency for your suppliers. In return, you will get an initial savings estimate and a further drill down on potential savings if you prefer to investigate further.
Previous Accounts Payables Series Posts: