Payables Insight Report: Why AP Automation?

Payables Insight Report: There are many effective ways to improve an organization’s bottom line. One of the most effective ways is to decrease the cost of operations that do not directly contribute to profit. This redirects the freed resources towards strategic, profit-generating initiatives. Automating accounts payable (AP) processes is a perfect example of this opportunity. It reduces the footprint of a high-cost administrative department, for starters. Additionally, however, it creates an opportunity to generate revenue through increased efficiency. Many organizations around the world have embraced back office automation technology like payables management to lower costs and drive competitive advantage.

AP Automation In North America

North American organizations, however, are generally behind their international counterparts in terms of back-office digitalization. This is especially the case when compared to organizations in countries of similar economic development. This is due to the differences between the United States and Canada and elsewhere with regards to tax structure. Additionally, this can be attributed to the contrasting amounts of regulation regarding accounts payable automation. For example, in Europe and Latin America, many governments have regulated the use of electronic Business-to-Business (B2B) invoices. The reason for this is to promote better compliance with VAT laws. In North America, tax systems are primarily sales- and income-based, and electronic invoicing is largely unregulated by local governments. Therefore, automation in the back office of United States organizations has grown at a slower rate than at organizations located elsewhere in the world.

However, accounts payable automation in the North American market has progressed significantly recently. Just a decade ago, it was far more common to find organizations operating on completely manual invoice management and payments processes. This was the case across various of industries and sizes. Today, many North American organizations have at least some technology in their back office. Whether the technology is the best option for an organization’s needs, though, varies. At the very least, many organizations have embraced partial automation and are progressing toward optimal efficiency through continued technology adoption.


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