Are inefficient A/P processes burning your cash?
Paying vendors might be “an unavoidable cost of doing business”...but there are many opportunities for avoiding A/P processing costs.
We’re fully focused on preparing for the first Orchid Webinar of 2022, “A/P Automation with Orchid”, so reducing Accounts Payable costs are top of mind for us right now. (Though we admit it’s hard not be distracted by the ongoing saga of Novak Djokovic’s visa status!)
Unless you drive a very hard bargain with your vendors, there is probably limited scope to reduce the size of your AP invoices. Likewise, deferring vendor payments isn’t a great strategy if you plan to stay in business for the long haul. So…
When looking at how to make savings on the A/P side, attention inevitably turns to improving process efficiency.
Automation isn’t all-or-nothing, of course, but if you theoretically jumped from fully paper-based and manual to fully digital and automated, the opportunity could be immense.
We’ve seen studies quoting savings of up to 90%. This avidxchange blog quoted:
- Goldman Sachs analysis showing a medium-sized business could reduce the cost of processing a single invoice from $16.00 to $5.89.
- American Productivity & Quality Center research showing the bottom 25% of performers spent nearly 5 times as much per invoice as the most efficient 25%.
- Institute of Finance & Management reporting automation could reduce the processing cost per invoice from $8.78 to $1.77.
Those are impressive numbers, but just think of some of the costs involved, many of them indirect:
- Time spent tracking down supporting documents to validate and approve invoices.
- Passing that paperwork from hand to hand for approval and cheque signing, especially in today’s work-from-home world.
- The physical infrastructure needed to store, index, and retrieve those documents for future reference and to meet regulatory requirements.
- The cost of purchasing and managing custom stationery for cheques, remittance advices, etc.
And that’s just from the time you receive the vendor invoice. What if you also looked at all the lead-up processes, like raising requisitions and purchase orders?
I won’t jump into detailed solution mode, as I don’t want to steal the thunder from our Webinar. (Join us if you can, or track down the video if you’ve missed it.) Still, here are some of the Orchid products you can expect to feature, and why:
- Notes: Sharing information between team members is the core of any collaborative, efficient process!
- Document Management Link: Online access to relevant POs, Invoices, and other supporting documents directly from Sage 300 screens.
- Extender (Scripts): Generate, file and email PDF versions of A/P documents at the click of a button.
- Extender (Workflow): Introduce structured, repeatable business processes to manage approvals.
- Add Workflow Anywhere and/or Remote Action Service to make life easier for your remote workforce to manage their workflow tasks.
- EFT Processing: It seems like the lowest of low-hanging fruit, but we never cease to be amazed at how many Sage 300 sites still use paper cheques for A/P payments. Come on, make 2022 the year you finally make the move to EFT!