Author: Carrie Zoucha, Vice President, Commercial Card
This is the first in a series of blog posts about accounts payable (AP) automation. Today, we’re exploring why it’s time to automate your AP process. Future posts will look at the “must-have” features in a solution and the benefits for your business.
The AP process is critical to businesses operations, yet at many companies it is a manual and paper-based procedure. In fact, most small and mid-sized businesses process invoices manually and make over 80% of their supplier payments by paper check. Studies show manually processing an invoice can cost a business as much as $20, and the average cost to issue a paper check is $38 (not including hidden costs like lockbox fees, tracking and escheatment).
As businesses grow and invoice volumes increase, the cost of manual AP also grows. It is estimated that U.S. businesses collectively spend more than $200 billion a year on this basic, everyday financial process.
With manual AP, it can also be difficult to consistently employ the controls needed to mitigate the risk of fraud. Basic payment authorization controls, such as segregation of duties, can be laborious and impractical, especially in a post-pandemic distributed workplace.
Plus, poor controls can expose businesses to internal and external fraud. The 2022 AFP Payments Fraud and Control Survey reports that 71% of organizations were victims of payments fraud attacks or attempts in 2021.
Today, businesses can use cost-effective, advanced software solutions to automate the AP process and experience many benefits.
AP automation solutions streamline and digitize all aspects of the AP process, from invoice capture and approval to payment authorization and disbursement.
It is estimated that a business can save 75% of its AP processing costs through automation because the workflows can enable AP staff members to work more quickly.
And while cost savings and efficiency alone are powerful benefits, AP automation solutions also can provide the essential controls to help mitigate the risk of internal and external fraud.
Nearly every business can experience AP automation benefits: improved working capital, reduced processing costs, increased staff productivity and reduced fraud. It’s also an excellent way to see immediate efficiency in tight economic times.
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.
Stay tuned for our next blog post on AP automation focusing on the specific features you need in a solution and a future post exploring benefits.
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.
1 “B2B How the next payments frontier will unleash small business” (Goldman Sachs)
2 “Invoice Processing: How Much Does It Cost To Process an invoice?” (Olivia Morris, LinkedIn)
3 “AFP 2022 Payments Cost Benchmarking Survey” (Association of Financial Professionals)
4 “U.S. Adoption of Electronic Invoicing: Challenges and Opportunities” (Federal Reserve Bank of Minneapolis)
5 “Owners May Not Be Covered When Hackers Wipe Out A Business Bank Account" (The New York Times)
6 “2022 AFP Payments Fraud and Control Survey" (Association of Financial Professionals)
7 “B2B How the next payments frontier will unleash small business” (Goldman Sachs)