AP Automation, the modern technology that helps companies big and small around the world manage invoices and payments, is becoming more mission-critical than ever. Amid the economic downturn triggered by the pandemic, financial processes like account-payables workflow from invoice capturing to approvals and from reporting to internal control procedures are considered essential tasks that need to be automated to sustain business continuity.
A new survey of 500 global organizations underscores the fact that companies that have invested in AP Automation software tools are better equipped to ensure business continuity both from the perspectives of cost control and process efficiency.
In fact, the smaller a company, the more important it prioritizes the speed to process an invoice and the need to increase efficiency and performance of its financial management function, according to the survey results. Eighty-four percent of companies with less than $10 million in annual revenues(vs. 78% in general) said time to process an invoice is the key to improving their financial workflow, while 91% of respondents among companies with between $10 million and $100 million in annual revenues(vs. 87% in general) cited increased efficiency and performance as key attributes of implementing AP Automation tools.
A 80-person business process outsourcing company in New Jersey for healthcare providers reported that with the use of AP Automation tool from Stampli the amount of time that it takes to onboard its accounts for billing and business office management services has been cut from 20 minutes to 30 seconds.
The emphasis on speed and efficiency among smaller companies is particularly striking given that they only represent 37% of the companies surveyed. This suggests that given their limited resources, their ability to survive and thrive rests on as much as the time they can save and eliminate unnecessary finance-specific tasks and procedures in order to help these smaller companies focus more of their attention on customers and business at hand.
Partial list of the customers included in ARTW AP Automation Study
Source: Apps Run The World AP Automation Study, May 2020
Other AP Automation software providers included in the ARTW Study are: ACOM Solutions, Aestiva, Hyland, Oracle, Sage, DocStar, Airbase, MetaViewer, Esker, MHC Software, Spendesk, Tradeshift, Apxpress, Artsyl, Axtension, Alton, Cashbook, Centreviews, Centsoft, Finexio, VV Finly Technology, Invu, Iptor, NextProcess, NumbersAgent AP, Ocerra, Octacom, OnPay Soutions, Paypool, Plooto, Proactis, Efficiency Leaders, SoftCo, Vanguard Systems, BlueCreek Software and others.
Here are the key findings of the AP Automation customer survey:
- Efficiency is the most cited reason behind the decision to invest in AP Automation tools. With 87% of companies surveyed calling that out, their efficiency drive is consistent with the moment in time when companies are evaluating everything that they do and decide on what constitutes Enterprise Essentials for ensuring continuous business operations.
- Elimination of manual procedures and time to process an invoice are cited the most behind efficiency, each securing 78% of the responses. Of these 500 companies, the modernization efforts to get rid of paper invoices and speed up invoice processing are the same impetus that has propelled many others to accelerate their digital transformation initiatives in light of the downturn because not doing so could jeopardize their future.
- The move toward data workflow and Optical Character Recognition(OCR) secures 65% of the responses from the surveyed companies, while business agility and ERP integration each collects 58% of the votes from these organizations. These two favorite responses are derived pretty consistently from companies regardless of their revenues, volume of invoices and workloads. Their alignment suggests that companies of all sizes are eager to look for alternatives to how they manage their business processes previously by refusing to accept the status quo and become leaner and more agile through tighter integration across all current systems being deployed.
- Real time analytics(53%), Cost Effectiveness(53%), and User Experience(45%) are rated as standard outcomes that about half of these customers can expect from such financial technology projects. It is possible that the other half of the surveyed companies consider the real-time, ROI and UX benefits secondary to issues like efficiency and automation capabilities. The upshot is that the more recent implementations(especially those in 2018 and 2019) of these AP Automation use cases, the more intrinsic value they place upon real-time reporting, ROI and usability from their projects.
- The Remote Access, Reliability and Security aspect of AP Automation is cited by 38% of surveyed companies. Not surprisingly, their sentiments would have increased if these implementations were done today given the tremendous popularity of everything from digital signature to video conferencing during the global efforts to thwart the pandemic. Almost all of the vendors cited in the survey have placed the appeal of remote AP Automation as the front and center of their value propositions. Stampli, for instance, is guaranteeing the deployment of a fully remote AP management in 24 hours.Â
Implications of AP Automation On How Businesses Continue Their Operations
The survey results are based on our continuous research on tens of thousands of companies and their enterprise applications implementations by zeroing in on their system go-lives, short-term and long-term benefits that have been documented, as well as implications of such projects on the future of work, or for that matter workplace and organizational productivity for all the key stakeholders involved.
For the AP Automation study, we focus on 500 use cases by benchmarking their results with those from our previous surveys conducted regularly over the past 10 years. The 500 AP Automation use cases cover customers of all sizes(37% of which are under $100 million in revenues) across 21 verticals in 25 countries using AP Automation software from 38 vendors. Twenty-seven percent of these use cases have gone live since 2018, while the rest went live in prior years. Our research shows all these customers are still actively running these AP Automation tools.
Among the tangible results and implications highlighted by these customers in our study are:
- Spurred by relentless economic forces, invoicing processing is no longer a routine or predictable task for companies with some big organizations only managing a handful invoices in any given period to a fast-growing telecommunications providers in Sweden scrambling to catch up with 40,000 invoices each week.
- The average number of invoices is about 3,000 a week among these 500 surveyed companies.
- Adopting AP Automation helps companies reduce average invoice processing time by 34%, compared with manual procedures.
- A Military Service director of procurements and contract management said its AP Automation project has helped to reduce invoice cycle times to 2.7 days using community benchmarking while helping US troops get the goods and services they need at all times.
- Manual processes amount to $10 to $20 per invoice as surveyed companies reported significant cost reductions both in actual costs by eliminating printing expenses and time spent on the end to end process from capturing to approving invoices.
- A large car dealership in Texas used to spend 160+ hours printing, signing, folding, stuffing and mailing 1,200+ checks every month. The use of AP Automation has cut 1,100 hours of manual payments, allowing its AP professionals to focus on more strategic tasks like reporting and reconciliation.
- Top line gains can be realized after adopting AP Automation to receive on-time payment rebates with one health-care provider realizing an average of $65,500 in such working capital incentives from its suppliers.
- A consulting firm cites the use of Artificial Intelligence Assistant is learning its invoice processing pattern that could greatly improve its account-payables business process.
- With its workforce becoming more mobile than ever, a research institute in San Francisco turns to AP Automation to process payments quickly and efficiently to prevent disruptions to its field research.
- A non-profit organization reported using AP Automation and storing all documentation electronically has made information sharing much easier, even with its 20 fundraising staffers who travel or work from remote offices.
- A real-estate agency in Texas recommends AP Automation as a prerequisite for any company needing to be prepared for emergencies that may require a remote work setting.
Summary
As a CFO at a Danish communications company points out in our study, he could have chosen a lesser expensive or functionally-rich AP Automation tool since its workload has yet to hit thousands of invoices every week. Still, the decision to invest in a best of breed software product for AP Automation is not considered an overkill because it makes its money back in all the time he does not need to spend.
Such customer sentiments encapsulate the gist of running Enterprise Essentials – software tools that automatically manifest themselves in terms of time not being wasted on arduous and repetitive tasks that yield little business value. AP Automation is emerging to be a key component of the next Enterprise Essentials for companies that need to optimize their efficiency, achieve agility as a competitive advantage, while discovering the workplace is likely to change for good with the current downturn and any natural and health crisis that could cause unforeseen dislocation in the future.
The AP Automation study illustrates the importance of not just keeping up with industry best practices, but also the courage and willingness of jettisoning outdated systems and procedures that are no longer meeting the needs of customers, suppliers and employees.
Figure 1 – Profiles of 500 AP Automation Implementations by Size (Employees, Revenue)
Figure 2 – Profiles of 500 AP Automation Implementations by Employee Count
Figure 3 – Profiles of 500 AP Automation Implementations by Revenue Range
Figure 4 – Top Reasons for AP Automation By Company Revenues, %
| $1-$10 Million | $10M- $100M | $101M – $1B | $1B+ | |
|---|---|---|---|---|
| Elimination of Manual Procedures and Paperwork | 70% | 80% | 79% | 79% |
| Time to process a single invoice | 84% | 79% | 76% | 77% |
| Real Time Analytics and Transparency | 35% | 53% | 53% | 60% |
| Outgrown Legacy System | 20% | 8% | 9% | 11% |
| Remote, Reliable and Secure | 42% | 41% | 42% | 32% |
| Data Workflow and OCR | 58% | 63% | 71% | 64% |
| Lower Processing Costs | 19% | 25% | 37% | 51% |
| Increase Efficiency and Performance | 77% | 91% | 89% | 87% |
| Reduce Payment Risk | 19% | 25% | 19% | 22% |
| Improve Internal Accounting Controls | 27% | 27% | 30% | 29% |
| Agility, Adaptability and Scalability | 55% | 56% | 59% | 59% |
| Content Collaboration and Business Relationship | 9% | 15% | 24% | 27% |
| User Experience (UX) | 51% | 52% | 46% | 37% |
| Cost Effective | 51% | 50% | 55% | 54% |
| Compliance | 3% | 10% | 14% | 18% |
| ERP Integration and Data Interoperability | 51% | 54% | 63% | 58% |
Source: Apps Run The World AP Automation Study, May 2020
Figure 5 – Industry of 500 AP Automation Implementations
| Industry | Percentage |
|---|---|
| Aerospace | 1% |
| Automotive | 2% |
| Banking and Financial Services | 6% |
| Communications | 2% |
| Construction and Real Estate | 7% |
| Consumer Packaged Goods | 5% |
| Distribution | 4% |
| Education | 4% |
| Government | 3% |
| Healthcare | 4% |
| Insurance | 1% |
| Leisure and Hospitality | 5% |
| Life Sciences | 2% |
| Manufacturing | 15% |
| Media | 1% |
| Non Profit | 4% |
| Oil, Gas and Chemicals | 5% |
| Professional Services | 21% |
| Retail | 6% |
| Transportation | 2% |
| Utilities | 2% |
Source: Apps Run The World AP Automation Study, May 2020
Figure 6 – Top Reasons for AP Automation By Industry
| Industry | Elimination of Manual Procedures and Paperwork | Time to process a single invoice | Increase Efficiency and Performance |
|---|---|---|---|
| Aerospace and Defense | 50% | 100% | 50% |
| Automotive | 90% | 80% | 100% |
| Banking and Financial Services | 83% | 67% | 83% |
| Communications | 89% | 89% | 67% |
| Construction and Real Estate | 81% | 89% | 94% |
| Consumer Packaged Goods | 67% | 83% | 92% |
| Distribution | 63% | 84% | 95% |
| Education | 75% | 90% | 85% |
| Government | 92% | 62% | 85% |
| Healthcare | 80% | 70% | 95% |
| Insurance | 75% | 75% | 100% |
| Leisure and Hospitality | 91% | 91% | 96% |
| Life Sciences | 100% | 56% | 89% |
| Manufacturing | 74% | 81% | 89% |
| Media | 100% | 100% | 75% |
| Non Profit | 76% | 71% | 76% |
| Oil, Gas and Chemicals | 84% | 72% | 92% |
| Professional Services | 75% | 78% | 81% |
| Retail | 82% | 68% | 89% |
| Transportation | 60% | 100% | 80% |
| Utilities | 56% | 56% | 78% |
| Grand Total | 78% | 78% | 87% |
Source: Apps Run The World AP Automation Study, May 2020
Figure 7 – Country of the 500 Surveyed Companies
Figure 8 – Top Reasons for AP Automation By Country
| Country | Elimination of Manual Procedures and Paperwork | Time to process a single invoice | Increase Efficiency and Performance |
|---|---|---|---|
| Australia | 77% | 62% | 85% |
| Austria | 0% | 0% | 0% |
| Belgium | 60% | 100% | 100% |
| Brazil | 100% | 100% | 100% |
| Canada | 79% | 84% | 89% |
| Czech Republic | 100% | 100% | 100% |
| Denmark | 14% | 86% | 71% |
| Finland | 84% | 79% | 89% |
| France | 79% | 79% | 100% |
| Germany | 85% | 69% | 85% |
| India | 100% | 100% | 0% |
| Japan | 100% | 100% | 100% |
| Latvia | 0% | 100% | 100% |
| Netherlands | 55% | 73% | 91% |
| New Zealand | 100% | 50% | 100% |
| Norway | 88% | 63% | 75% |
| Poland | 100% | 0% | 100% |
| Portugal | 100% | 100% | 100% |
| Qatar | 100% | 100% | 100% |
| Saudi Arabia | 100% | 0% | 100% |
| Spain | 100% | 50% | 100% |
| Sweden | 67% | 67% | 86% |
| Switzerland | 83% | 83% | 83% |
| United Kingdom | 68% | 84% | 79% |
| United States | 80% | 80% | 87% |
| Grand Total | 78% | 78% | 87% |
Source: Apps Run The World AP Automation Study, May 2020
Follow the link below for methodology of the study and the Taxonomy and Market Definitions documents:
https://www.appsruntheworld.com/taxonomy/
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