If you’re an efficiency-obsessed AP manager, we think you deserve a raise. Because Accounts Payable process improvements deliver huge advantages to businesses, staff, suppliers and the wider economy. Here are six reasons AP efficiency should be recognised and rewarded in YOUR business.
Six key benefits of Accounts Payable efficiency
Late payments cost money…
The most obvious reason for measuring AP performance and driving AP efficiencies is this: late payments cost more money. Your organisation is already paying for the cost of goods or services, as well as the cost of processing invoices. So, an extra – and wholly avoidable – cost is undesirable. Efficient AP teams pay invoices on time, avoiding late fees and even securing early payment discounts. That’s a big boost to your business’s bottom line.
And alienate vendors
If you think alienating the odd supplier here and there doesn’t matter, consider this. One in five organisations has had a supplier cancel goods or refuse services because of late payments. This can cause significant difficulties and delays for the department affected, which may need to find and vet new suppliers, or even jettison a project as a result. AP process improvements can have a positive effect across the entire organisation.
Inefficient processes prevent strategic thinking
The role of finance is changing as organisations increasingly look towards their finance teams to deliver strategies that save money and increase revenue. But how can AP teams deploy their professional expertise when they’ve got their heads buried in manual checks and data entry? Increasing AP efficiency is key to freeing up your experts to add real value to the business – the sort of work that requires human input and ingenuity.
Busy teams are a boon for fraudsters
A shocking 5% of a company’s turnover can be lost to Accounts Payable fraud every year and the average fraud case runs for two years before being detected. Teams that are overworked and overwhelmed simply don’t have the bandwidth to spot and investigate fraudulent activity. This is especially true now, as scammers become increasingly sophisticated and use techniques that evade easy detection by rules-based controls and manual checks.
Frustrated finance pros don’t stick around
Delivering a great service and contributing to business success is a key motivator for diligent AP staff. But bog them down with dull repetitive work, frustrate them with bottlenecks and bloated processes, or let them take the fall for slow systems and you can wave goodbye to their motivation. And once that motivation leaves, the likelihood is they will too. On average it costs £3000 to recruit one new hire and takes almost 28 days to find the right person. On top of this, you’ve got to consider additional training costs, as well as reduced productivity whilst new colleagues are onboarding. Think this doesn’t apply in your business? Research says 49% of AP staff feel their team is undervalued.
Fast payments keep the economy afloat
If the reasons above aren’t enough to convince you that AP performance should be a top priority, consider this. Efficient AP teams keep the economy afloat. According to the Federation of Small Businesses (FSB) Time to Act report, delayed invoice payment costs the UK economy £2.5 billion a year and causes 50,000 SMEs to fail as a result. So efficient payment processing isn’t just about dodging fraud and avoiding late fees, there’s a moral imperative too. A healthy economy benefits businesses of all sizes and individuals alike. Yet more proof that your efficiency-obsessed AP manager deserves superhero status.
Using AI to increase AP efficiency
One way to improve the efficiency of your accounts payable processes is through invoice intelligence. Xelix is the world’s first invoice intelligence platform. It’ll save you time and money by adding AI to your AP processing power. Xelix accurately detects a range of errors and fraudulent activity with ease, prevents overpayments before they occur, and reduces time and cost per invoice. Not only that but it releases your AP experts from tedious manual tasks so they can show off their expertise and add value with more strategic activities.