Accounts Payable Automation with DocuSphere – Best Practices for Managing AP Metrics and Productivity

Are you responsible for managing the Accounts Payable process for your firm? Are you interested in improving the profitability of your organization by tens of thousands of dollars per month? If so, read on…

Recently the Aberdeen Group (May, 2011 “Invoicing and Workflow: Integrating Process Automation to Enhance Operational Performance”) published the results of a survey they conducted with their membership that involved their performance with regards to Accounts Payable processing.

The survey revealed a startling set of important differences between the top 20% of performers in processing Accounts Payable and the bottom 30% (Table 1).

Here are the three essential comparisons from the Aberdeen survey:

1. In the very important category of “average cost to process a single invoice,” the ‘Best in Class’ respondents averaged $3.09 per invoice and the ‘Laggards’ averaged an astounding $38.77 per invoice – a staggering difference of $35.68 per invoice. For companies processing 3,000 invoices per month this amounts to a huge cost differential: $107,040 per month!
2. In the category “year over year increase in capturing prompt payment discounts” the ‘Best in Class’ companies achieved 8 times better results than the ‘Laggards.’ In many cases this improvement increased actual profitability by several hundred thousand dollars annually.
3. A huge reason for this remarkable improvement in prompt payment discount performance is the following: ‘Best in Class’ performers average only 3.8 days to process an invoice – from receipt of the invoice to scheduling for payment; and the ‘Laggard Group’ required 20.8 days.

Is it any wonder that professional organizations like the Aberdeen Group and the IAPP are encouraging their subscribers and members to seriously evaluate the benefits of automating accounts payable as soon as possible?

Organizations who have chosen to implement Accounts Payable Automation using DocuSphere from Image integration Systems have achieved results like this and more. You can as well.

In addition to the obvious advantages of having nearly ‘hands free’ processing of accounts payable transactions and closely managed and monitored invoice approval processes, the ability to establish targeted performance metrics and measure them on a regular basis, provided by DocuSphere, will help you move your organization into the ‘Best in Class’ category.

With the reporting module that comes as a standard part of the DocuSphere solution, it is easy for end users to create reports and charts designed to closely monitor your organization’s performance against these benchmarks on a summary basis and then drill down to the very specific details that you might need in order to fully understand what needs to be done to improve your processes.

In addition to these industry-wide performance metrics, you will be able to track other performance measurements to make sure that your organization is always improving. Some DocuSphere clients produce reports and charts that depict the organization’s performance regarding the average length of time required to approve an invoice with an ability to drill down to the performance of each invoice approver and, even further, to understand why one specific invoice took three times longer to approve than normal. As soon as your invoice approvers understand that they are being monitored in this way, their performance will improve dramatically across the board.

Other performance improvement metrics used by customers of DocuSphere include an analysis of why specific invoices did not automatically match their corresponding PO’s and/or receiving documents, the number of invoices that are awaiting resolution for too long – by AP worker; and many others.

Many of our clients provide their auditors with secure logins to enable them to review information online as needed or view reports with full drill down capability for audit purposes. This can greatly increase the speed of your audits as well as reduce the cost of the audit – both in terms of the time of your internal staff who supports the auditors’ requests as well as the charges from the audit firm.

One of the real beauties of DocuSphere is that as practices and processes go through continuous improvement, the metrics that were originally established can be reviewed and refined as needed – all without the assistance of your IT staff.

If you do not believe that your organization is already in the ‘Best in Class’ category for processing AP, please visit our web site. You will get an excellent idea of the process, who has already taken advantage of DocuSphere, find a set of case studies describing their goals and the results they have achieved and also find a number of very useful tools for you to use as you start and conduct your search for the best Accounts Payable Automation solution for your organization.

Joe Links

Joe has over 30 years in the Information Technology industry in a number of senior management and sales leadership positions with a focus on ERP software and solutions. As CEO of the largest IBM Midrange Business Partner firm, he was responsible for growing the company from a staff of five to one with over 400 employees located in 16 cities across the United States. Links also spent 15 years as an Associate Professor and Program Coordinator at the University of Toledo. He is a graduate of Baldwin-Wallace College with additional graduate work at the University of Toledo.

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