Inconvenient roadblocks
Unfortunately, AP teams are dealing with a lot of situations that make increasing their invoice processing speed very difficult.
First, AP teams have fewer staff members than in years past, and they are finding it hard to add to their teams. The continuing inflationary pressure and economic uncertainty mean many business leaders are hesitant to hire, and those that do want to add headcount find it hard to get the qualified personnel they need. A recent State of AP survey finds that 45.1% of accounts payable teams expect hiring challenges. Not surprisingly, 58.8% are focused on boosting the productivity of their already lean teams.
Second, today’s AP teams are often geographically dispersed. In that same survey, 67.6% of respondents say that their offices are hybrid or fully remote. Having team members working in different places can hamper collaboration and productivity, especially when their work involves paper documents.
While organizations have made a lot of progress in getting their vendors to submit electronic invoices, even best-in-class accounts payable teams still get some of their invoices in paper format. Dealing with paper slows down processing and increases costs. Estimates range from $15 to $40 to process a single paper invoice, compared with less than $5 for a digital one. And if teams don’t have an easy way to automatically extract pertinent information from scanned documents, that can further slow things down and drive up costs.
Accounts payable teams also spend a lot of time dealing with questions from vendors. In fact, the State of AP report says, “Nearly half of AP teams (47.3%) are spending more than six hours per month following up on vendor inquiries.” That leaves less time for processing invoices and handling their other tasks.
Those very vital other tasks include combating fraud. The AP team is the first line of defense in preventing losses – a role that has become more critical in recent years. The PwC Global Economic Crime and Fraud Survey 2022 reveals, “51% of surveyed organizations say they experienced fraud in the past two years, the highest level in our 20 years of research.” Of those companies that have experience fraud, 22% lost $1 million or more as a result, and 18% lost $50 million or more. A lot is riding on AP teams doing their job well.
And if all that wasn’t enough, AP teams have one more inconvenient roadblock slowing down invoice processing – compliance. While performing their tasks, teams have to meet a confusing array of international requirements related to data retention, privacy protection, risk management, tax law, anti-money laundering regulation, e-payments, and financial reporting.
As a result, a growing number of organizations are turning to a new type of solution that can help them speed up invoice processing while also overcoming many of these challenges: digital experience platforms.
5 ways a DXP helps overcome invoice processing challenges
Most AP teams understand that automation can help them process invoices more quickly. In fact, many have set goals around increasing their use of automation. (See “Ambitious goals” sidebar.)
However, while they know what they need to do, many have not yet done it. According to Procurement Magazine, nearly half of organizations (48.1%) have not yet automated their AP processes.
Part of the problem is that many teams are trying to cobble together their own solutions, deploying separate tools to handle tasks such as digitization, content management, intelligent document processing, and information governance. But getting all these separate pieces of technology to work together can be timeconsuming and creates hassles of its own.
A DXP brings all the necessary components together into one solution, helping organizations speed up invoice processing in five key ways:
1. Reduces manual intervention
Many AP teams find their current technology and processes for handling invoices to be insufficient. In the Ardent Partners survey, 49% of respondents said invoice/payment approvals take too long, and 47% said they have a high percentage of exceptions that require manual interventions.
Some DXPs dramatically reduce the number of exceptions that teams must process by hand by harnessing the power of advanced artificial intelligence (AI) to extract and structure the data contained ininvoices. For example, Iron Mountain InSight DXP allows organizations to quickly create workflows that identify important pieces of information, such as the vendor name, invoice date, tax, gross amount, and currency, and make it available to the company’s financial software.
These workflows can also automatically match invoices to purchase orders and receipts before routing them to the appropriate personnel for approvals. These automatic processes help eliminate human error and combat fraud while increasing processing speed.
The best DXPs handle paper invoices as easily as digital ones. The team needs to scan a document only once to make it available to everyone who needs to see it while also keeping it secure from cybercriminals and fraudsters.
This reduction of manual work is one of the biggest ways that DXPs can help improve productivity for lean or understaffed AP teams. As the Ardent Partners report notes, “Automation is the most effective tool for combating high costs,” potentially enabling cost reductions of up to 80% over manual and paper-based methods.
