Outdated approach leaves companies missing out on efficiency of automated systems
50 percent of businesses still use paper-based payment processes, missing out on the efficiency, cash management and process visibility benefits of automated systems, according to global research* commissioned by ASG Software Solutions.
Of those companies, one-third (33%) use paper payment processes for more than 25,000 invoices each month. Not only is this costly and time-consuming, it is also leaving organisations vulnerable to human error, compliance violations, and damaged customer and vendor relationships.
For AR departments, reduced write-offs associated with goodwill and bad debt can delay cash flow. Indeed, one fifth of respondents (20%) claimed they are losing at least 3% of their invoice-able income due to issues including short payments, late payments, out-of-discount claims and tax disputes.
The findings, in partnership with information professionals community AIIM, examined organisations’ accounts payable (AP) and accounts receivable (AR) practices, the issues and shortcomings experienced, and what ROI has been achieved.
Theresa Kollath, vice president of information management line of business at ASG, said: “In today’s competitive business landscape, not being able to collect payments from customers in a timely manner is detrimental to an organization’s vitality. With the median cost to process an invoice estimated at approximately eight dollars, an automated payment system is poised to deliver hundreds ofthousands of dollars in savings per year, just on invoices alone.
“For companies that already have content management systems in place, integrating an AP/AR system is often that much easier, placing them well on their way to improved cash flow management and overall efficiency. And, with flexible fit-for-purpose solutions that can incorporate new forms of content as they are introduced, organisations feel confident that their payment processing solution will adapt as their business grows.”
Doug Miles, director of market intelligence for AIIM, said: “A business simply cannot function without a payment system. And yet, they are thought of as an unavoidable overhead and are commonly one of the last business processes to be updated.”
“In addition to the efficiency, transparency and cost benefits it offers, an automated payment system meets the demands of today’s changing business environment, which include a rise in PDF invoices, thereby making it easier to remain ahead of the curve.”
Unlike other one-size-fits-all suites, ASG brings automation to payment systems with its fit-for-purpose AP and AR automation content management solutions, ASG-ViewDirect Suite and ASG-Cypress Suite.
The AIIM research shows that 50 percent of automated AP system users see a return on investment in nine months or less. In addition to a short payback period, organizations with automated AP/AR systems indicated better monitoring and transparency of invoice status, improved records keeping and reduced time spent on collection.
- After the adoption of an AP solution, the reduction in invoice processing costs was reported at an average of 29.2 percent
- Nearly half of all AP implementations were completed in six months or less
- 41 percent of AR system users report a payback time of nine months or less
* AIIM - Automating AP/AR Financial Processes – user feedback on the real ROI.