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SMR
Best AP departments 50 times as productive as the least effective. Basware, the global leader in purchase-to-pay solutions, today announced
the findings of a commissioned study conducted by Forrester Consulting1
on behalf of Basware, examining the performances of accounts payable
departments in relation to the levels of efficiency within their invoice
handling processes. The study finds that the best AP departments are 50
times as productive as the least effective2. Applying a complete
purchase-to-pay process combining e-invoicing, integrated procurement
and finance solutions, is found to lead to excellence in accounts
payable departments, and increased productivity for organizations.
Examining the AP departments’ performance in terms of how many invoices
each AP employee processed annually, the study measured the gulf between
best and worst performing AP functions to determine what defines AP
invoice processing excellence. The findings revealed a significant
disparity between those accounts payable departments that are still
relying on paper-based processes and those organizations that have
adopted automated processes and e-invoicing. 47 percent of the
organizations surveyed still receive more than half of their invoices in
paper form which leads to increased errors, delays and costs resulting
from manual processes. According to the study, “the worst-performing AP
departments don’t seem to realize how far they lag behind their peers.
In contrast, 60% of those in the top quartile saw further scope for
improvement. The least-efficient departments can’t move forward until
they realize just how far they lag behind their peers.”
Combining invoice automation with e-invoicing and eProcurement within
organizations was shown by the research to double the chances of
achieving AP invoice processing excellence and maximize straight-through
processing (STP). Eliminating human intervention in the invoice
handling and approval process cuts manual data capture tasks such as
document scanning and data entry, thus not only increasing the speed of
the process but also providing cost-savings within the business. By
implementing purchase-to-pay solutions, organizations can gain control
and visibility over finance and procurement processes and improve
overall process performance.
The integration of e-invoicing and eProcurement works in parallel with
the need to centralize responsibility in accounts payable departments to
enable process improvements. Finance managers with pan-division
responsibility were found to be more able to invest in better technology
and processes than their colleagues operating at BU level. Persuading
suppliers to send invoices electronically and offering them incentives
for e-invoicing was also found to correlate strongly with excellent
performance. 18 percent of the companies surveyed were processing more
than 40,000 invoices annually per full time equivalent (FTE), while 25
percent of respondents needed one FTE for every 4,000 invoices or less
per year.
“Organizations are paying dearly for poorly performing processes, with
each invoice costing more than USD 50 to process at the organizations in
the poorest performing quartile,” said Steve Muddiman, SVP at Basware.
“We believe these study findings reflect the evidence we have seen in
our own customer base. Integrated purchase-to-pay process combined with
best practices such departmental collaboration between finance and
procurement enable organizations to transform their AP departments to
top performers, delivering cost savings and ultimately boosting the
bottom line.”
To download the study, please visit: www.basware.com/forrester-report
1 “Finance And Procurement Work Together To Achieve AP Invoice Processing
Excellence. AP Departments That Combine Technology With Best Practices
Are Most Likely To Get Top Results”, A commissioned study conducted by
Forrester Consulting on behalf of Basware, April 2010.
2 In this study, Forrester conducted an online survey of 100 large
organizations in the US, the UK and France.
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