Accounts payable invoice automation (APIA) takes basic invoice management and AP operations to the next level. The main difference: APIA technology doesn’t simply automate — it’s smart, intelligent and capable of learning over time. The result is better financial outcomes, simpler processes, increased control and hyper-efficiency.
Now, demand for APIA is rising. Gartner reports APIA spending will more than double over the next five years to reach $1.9 Billion. This big increase follows years of corporates under-investing in AP, which has left teams strained and businesses susceptible to fraud.
There are several broader catalysts driving the growth of APIA, including:
- Increased demands on resource-strapped procurement and finance teams, especially those that lack enabling technology.
- The errors and inefficiencies associated with manual accounts payable processes.
- Increased risk of fraud and financial error.
- The proven ROI of procurement and AP automation. (Learn more: The Power of Procurement and AP Digitization)
- Hiring and retention challenges.
- The sheer volume of invoices a growing business must process.
- Pressure to accurately close the books in a timely manner.
Adoption is also driven by the common goals every finance team shares — cost savings, working capital management, financial risk and operational performance.
The benefits of APIA extend broadly across the organization. The right deployment and technology can solve every pain point highlighted above. Here are 10 reasons to jump on the APIA train right away.
1. APIA Eliminates Non-PO Invoice Pain
While having a policy like “No PO, No Payment” sounds great for pre-approval, visibility and control, it’s not always realistic for many spend categories. Today’s invoice management processes must be designed to accommodate both PO and non-PO invoicing (where appropriate).
That said, invoices that come into AP without a PO create problems. They increase the risk of fraud, budget overages, rogue purchasing and payment mistakes, and create more work for your team.
Smart APIA solutions, like Vroozi, eliminate these issues by automatically capturing non-PO invoices, accurately extracting and mapping the invoice data, and then intelligently analyzing, coding and routing the invoices as appropriate. APIA solutions learn over time and automatically fix issues, like assigning a non-PO invoice to the right spend category, catching duplicates, and proactively identifying fraud.
2. APIA Doubles Accounts Payable Productivity and Speeds Cycle Times
Yes, you read that correctly, but how? APIA decreases (and in many cases, eliminates) the workload for your AP team.
Ardent Partners reports that the number one challenge holding AP teams back in 2021 is the amount of time required for invoice and payment approvals. A lot of this pain comes from wasted time chasing down the right person to approve the transaction. The research firm also says that the average time to process an invoice is eight days, but invoices are processed in eight seconds with accounts payable invoice automation.
APIA solutions automate the entire process — invoice scanning and processing (including different formats, such as paper, email, mailroom and more), coding, routing and approvals – all with zero (or very little) human intervention on processing or exceptions. The best part: they learn over time and constantly identify opportunities to save more time through automation and smart coding.
3. APIA Equips you to Scale Faster
The Institute of Finance & Management reports the average employee can process around 8,000 invoices per year. That means a business that typically processes 40,000 invoices per year requires five full-time employees (FTE). Based on our experience, companies can process up to 23,000 invoices per FTE on average, with best-in-class teams processing up to 40,000 per FTE with automation. That’s a 5X performance improvement.
Finding talent right now is tough for everyone. Accounts payable invoice automation enables you to scale faster by reducing the amount of FTEs you need to manage invoice processing and positioning you to take on more as you build and develop your team.
Team makeup is also important. APIA creates room for your team to focus on other aspects of your business. It allows you to shift your attention away from the small-dollar, one-line item invoices, and focus on the million-dollar invoices instead. Automating your accounts payable leaves additional resources for higher-value resources, like data-scientists and analysts.
4. APIA Makes Closing the Books Faster and Easier
Automation makes your end-of-month processes smoother and quicker by improving your data quality with digital speed and accuracy
APIA technology automatically accounts for transactions as they happen, so there’s no end-of-month catch-up work. Similarly, it provides real-time visibility into open accounts, pending payments, outstanding liabilities and more, which eliminates end-of-month questions about outstanding transactions. Finally, data (POs, invoice amounts, payment approvals, etc.) are being validated with code so you can be confident in the data quality for real-time analytics. This helps you close the books more confidently.
5. APIA Reduces Fraud
Spot checking transactions takes time and resources. The practice also creates exposure. On the other hand, APIA technology is capable of auditing all of your transactions in real-time.
This is especially important for non-PO invoices, which on average, can make up around 50% of what you process. With PO invoices, it’s easier to detect fraud because you can match the invoice against approvals, orders and what was received. With non-PO invoices, you don’t have anything to match against and must rely on trend analysis to detect fraud.
Solutions like Vroozi leverage AI to automatically find, detect and fraud, overbillings, and payment errors. Vroozi’s AI, for instance, analyzes trends for excessive or fraudulent spend, ensures the right person reviews and approves and learns from history to uncover errors.