As Peter Drucker once shared, “What’s measured improves.” Although it’s not a new concept, it’s a powerful one that merits a little introspection. As we rapidly approach another new year, there’s never been a better time to take a hard look at operations as you try to find a new way to gain an edge over your competition.
Many businesses are facing a proverbial wall when it comes to innovation. There comes a time when the idea factory has simply run out of steam. Who can constantly innovate year after year and do it with ease? After all, if it was easy to think of brilliant innovations, we’d likely already have implemented them.
But don’t fret just yet. Finding a few remaining stones to overturn is possible if you know where to look. One key area that deserves attention lies in the often over-looked finance department. Let’s examine traditional accounts payable processes.
If you’re like most busy manufacturers and distributors, chances are good that there’s a team of overworked employees dedicated to data entry. They painstakingly pour over paper invoices carefully receiving, printing, entering, coding, routing, and archiving. It’s busy work, but a necessary evil in order to pay the bills. Or is it?
Turning this assumption on its head starts by asking a tough question, “Do you know how much it costs to process a typical invoice and how long it takes?” If you don’t know these numbers, don’t worry – you’re not alone. Although everyone knows there’s costs associated with invoice processing, but since it’s not tied to an actual invoice, it’s more difficult to measure.
Fortunately, there’s a lot of research already conducted. And the picture it paints is anything but attractive. Did you know it can cost $19.10 to process a single invoice and take 27 days to approve? If you’re like most people, you’re probably feeling a mixture of disbelief and shock. That sounds ridiculously expensive and slow!
Time for a change? Absolutely. Sure you could look for ways to make tiny improvements, but why not think big? Consider making serious ROI by switching to invoice automation to reduce transactional costs by 80% and accelerate processing cycles by 75%! As you start to plan for 2016, consider giving your AP practices a much needed make-over.