Given recent trends toward improving business processes in a bid to better manage cash and drive down costs, it is somewhat baffling that more enterprises have not fully automated their AP processes. This is especially true in light of the challenges brought on by the pandemic, which made paper-based processes unworkable with the work-from-home mandates that most employers enacted. Ardent Partners’ research has consistently shown that automated invoicing processes can cost between 50% and 80% less when compared to manual, paper-based processing methods.
ePayables Usage and Adoption Rates
In a business environment that stresses efficiency and smart cash management, investments in ePayments and eInvoicing have the clearest path to achieving these goals. These two solutions, along with automated routing and approval solutions, have moved to the top of the adoption chart. A discussion of the most widely-adopted solutions follows.
- ePayments solutions (68%) have seen a sharp rise in adoption over the past few years due, in part, to a more holistic (and expanded) focus on the role of AP that now includes both invoice AND payment processing. The increase in availability of new ePayment solutions has also triggered much greater interest in the area. While many AP departments remain focused on the front end of the process, more groups are realizing that ePayment solutions (which can tailor payments specific to certain suppliers utilizing a variety of electronic means, including ACH, commercial/payment cards, virtual cards, wire transfer, etc.) are vital to completing the full cycle of P2P.
- Automated routing and approval workflow (68%) solutions complement document imaging/scanning and automated data capture solutions. In manual environments, invoice approvals often experience delays as invoices await final approval on desks or in email inboxes. These solutions eliminate such bottlenecks by streamlining the approval process through automation. Specific business rules are applied to the approval workflow, allowing for different invoice routing paths based on factors like invoice amounts, cost centers, organizational structure, tolerance levels, business travel, and vacation schedules. These solutions enhance the AP process by reducing waiting times for approvals.
- eInvoicing solutions (67%) remove paper from the AP process by enabling suppliers to create and submit invoices electronically. The system maintains that format through validation, matching, and approval processes. eInvoicing drives process efficiency by eliminating data capture and manual data entry. eInvoicing solutions offer tremendous simplification on the process side, as well as cost savings in terms of price per invoice processed. This is most directly seen with the the solutions enabling “straight-through processing,” which occurs when a submitted invoice is processed and approved without any human intervention. To gain the best returns on eInvoicing, supplier participation is needed.
Technology Impact: Adoption vs. Transformation
ePayables solutions automate invoice and payment processing, transforming AP departments into self-sustainable centers of excellence. By replacing manual tasks with repeatable processes, businesses gain value beyond cost savings. Automated AP teams can take advantage of early payment discounts, mitigate fraud risks, and achieve visibility into specific invoices and payments. The 2024 ePayables adoption numbers indicate that more AP organizations are relying on technology to support their goals, marking an ongoing shift from manual-driven environments.
With more user-friendly and better-integrated solutions, the adoption of ePayables solutions is gradually increasing, enabling AP teams to focus on strategic aspects like relationship-building. While the COVID-19 pandemic served as a catalyst to drive greater emphasis with AP and finance ranks on the crucial role of technology in operations, AI opportunities (and the risk of missing them) will be a multi-year industry catalyst to invest in technology.
Ardent Partners expects more digital transformations across enterprises and within AP. The digital transformation of AP departments reimagines operations by leveraging technology as the core process. It requires sponsorship, collaboration, vision, expertise, and a robust technology infrastructure, with superior program design influencing its speed and impact. Full automation within most defined AP activities is rare.
