A Look at Current Accounts Payable Operations, Challenges, Visibility and Control
Technology touches nearly every aspect of business operations today, and Accounts Payable (AP) is no exception. For instance, organizations invest hundreds of thousands of dollars in enterprise tools. This can include enterprise resource planning (ERP) applications or process automation. They do this in hopes of improving the efficiency and accuracy of their operations. Yet, even with these advancements, cumbersome paper documents, and manual work often cause trouble for AP departments. Additionally, errors and exceptions that delay the procure-to-pay cycle are often a threat.
Partnering with Statista, Hyland surveyed 200 AP professionals from organizations across the United States. The survey aimed to examine what invoice management and processing looks like today. The following results reveal how well AP organizations currently operate and their primary challenges. Additionally, they examine why attributes like visibility and control are most valued in invoice processing.
The concept of process automation is not new. Most finance organizations have automated their AP processes to some degree. In fact, nearly 2/3 of the respondents claim to be fully or mostly automated. In some cases, organizations use ERP as their tool of choice. However, some other organizations use a combination of an ERP and additional applications. This whitepaper will detail precisely how respondents described their level of automation.
DPO and Invoice Volume
On average, organizations’ current days payable outstanding (DPO) is 20 days. Nearly half of the respondents to our survey had a current DPO of 10 days or less. Additionally, automated organizations tend to have faster payment cycles compared to manual organizations. Organizations that are mostly or fully automated reported an average DPO of 17 days, while organizations with partial, some, or no automation reported an average DPO of 25 days.
Most organizations feel their AP teams could handle an increase in invoice volume with their current processes. However, this is not surprising given the high levels of process automation. Further, of those respondents who said they could handle an increased volume of invoices well or very well, 95% were from mostly or fully automated organizations.