The Recall Blog: Inside Information Management

Addressing Accounts Payable Challenges with Automation

Monday, November 23 rd, 2015Comments: Comments Off

For many companies, Accounts Payable (AP) departments are tasked with processing an overwhelming number of invoices. Often, there are a number of people involved in the process to review and approve before the invoice can move to the next step. This makes for a fairly lengthy, and sometimes costly, process. In fact, Forrester found that nearly 90 percent of invoices are still processed manually and cost as much as $20 per invoice to process.

However, Forrester also notes the efficiencies gained through implementing an automated, electronic invoice process including a 90 percent cost savings for AP and 37 percent fewer errors on invoices. Bottom line: Automation enables AP departments to save time and money by reducing the number of people who need to review, approve and otherwise handle paperwork.

To implement an automated process, companies must first understand the challenges specific to its internal process. Finding the pain points is an essential step before moving to an automated process. Being aware of challenges, and knowing potential solutions, better enables a company to identify where efficiencies can be created. Here are some of the most common challenges and solutions with paper-based AP processes:

  • Challenge: Unknown Processes – Many companies struggle to understand its own internal procedures for processing invoices. The field office may have different methodologies than headquarters and there may be differences for codes used in a particular system.
  • Solution: Outline the routing and approval system in 10 steps or less. Many companies are unable to identify 10 clear steps. Hold a discovery session to see what processes are used and determine which ones make sense. Cleaning up the internal process will better allow a company to streamline from start to finish. From there, focus on consistency and efficiency to create automated rules.


  • Challenge: Inconsistent Processes – Headquarters and field offices may not apply uniform workflow implementation. In outlining steps there may be differences or employees may not follow them, opting for a perceived “shortcut.” Legacy knowledge can get in the way of a structured process.
  • Solution: Appoint a project manager to collect the different processes and validate them from end-to-end. Having one point person can bring all necessary departments and staff together to implement one consistent solution. A project manager can see where there are problems and what critical problems could come up and prioritize which ones need to be addressed first.


  • Challenge: Lengthy Processes – Time spent processing an invoice can vary widely and with time comes cost. Particularly for companies that have lengthy or inefficient processes, the time spent on one invoice can mean more overall cost. Many companies average $10 or more per invoice to process with a large number at $20 per invoice. Industry average should be around $6 per invoice.
  • Solution: Do a time study to see how long it takes to process one invoice and evaluate the price per invoice. By making it a priority to track and document current methods, companies can better understand where inefficiencies are and address them.

By starting with the current inefficiencies, AP departments can have the best understanding on what needs to be done to gain efficiencies and implement an effective automated system.

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