Money Movement

How Can My Business Benefit from Accounts Payable Automation?

    • zoucha-carrie-headshot.jpg
    • Carrie Zoucha

      Vice President, Commercial Payments-Centime Business Strategy
      Mar 08 2023

How Can My Business Benefit from Accounts Payable Automation?

Author: Carrie Zoucha, Vice President, Commercial Card

This is the third and final entry in a series of blog posts exploring accounts payable (AP) automation. Today, we’re looking at the benefits you could see from automating AP at your business.

In the U.S. alone, over the past decade about 200,000 businesses have adopted AP automation solutions. Benchmark studies of these businesses offer insight on the benefits of AP automation. Here are highlights from a recent Institute of Financial Management (IOFM) AP Automation Benchmark study.[1]

Nine Tangible AP Automation Benefits

Process invoices 14 times faster. Highly automated accounts payable departments process 14 times as many invoices per FTE each month as their peers.

Spend $5 to process an invoice. To process a single invoice, highly automated AP departments spend one-fourth as much as their peers with little or no automation ($5 per invoice versus $20 per invoice).

Match 90% of invoices and purchase orders on the first pass. Matching invoice line items with data in a PO system is the top pain point for 28% of accounts payable departments. Automation does that work for AP departments.

Lengthen Days Payable Outstanding by 30%, unlock working capital. Businesses using automation do not change payment terms but can use cash forecasting and an array of credit-related products to pay suppliers on time and still conserve valuable working capital.

Capture 97% of early pay discounts offered. Eighty percent of the businesses surveyed reported receiving invoices that offer discounts on the amount due in exchange for prompt payment. AP automation solutions can enable businesses to capture 97% of prompt payment discounts offered.

Manage cash, optimize working capital. Modern AP automation is not just about lowering costs and improving efficiency, but also about planning your payment runs with a view to cash and cash flow. Timing payments will shore up working capital when you most need it.

Earn cash back on your spending. AP automation simplifies the ability to pay vendors by credit card. Driving at least 10% of your supplier spend onto commercial cards is a best practice and can earn rewards.

Reduce payments by check to under 50%. AP automation makes it easier to send payments electronically (ACH direct deposit and credit card). Businesses can shift their payment mix to drive paper check payments to less than 50%.

Reduce payment fraud. Surveys show that 80% of reported fraud cases involve some Business Email Compromise, with the AP department being the primary target (58% of all cases). Invoice approval workflows eliminate fraudulent payments. Dual payment control — a standard feature of AP automation solutions — will help reduce fraud.

It is projected that more than 7 million U.S. businesses can benefit from digitizing their AP process. It is also estimated that just under 200,000 businesses use AP automation solutions today. With the market growing at 20-30% annually, now is an excellent time to consider implementing automation in your business.

FNBO can help your business automate AP processes with our Centime solution. Centime is cloud-based software that integrates with your general ledger to help you control and manage cash, including automation of payables and receivables, and forecast cash flow. Learn more about how Centime can simplify your financial operations or to schedule a demo, contact our team below.



If you missed the previous articles in our AP automation series, you find them here:

Is Accounts Payable Automation Right for Your Business?

What Features Do You Need in an Accounts Payable Automation Solution?

About the Author

Carrie has over 20 years of banking and payments industry experience. In her current role, she has the opportunity to work with large corporate clients. She enjoys learning about their business and helping them grow by providing a range of solutions, including commercial card and corporate treasury services.

The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.