Current APQC research indicates an uptick in financial process improvement. These efforts tend to focus on one of two key areas: (a) streamlining and automating core processes or (b) strengthening financial analysis that supports business decision making. When it comes to core process repair, accounts payable (AP) is getting a lot of attention. Process productivity metrics from APQC's Open Standards Benchmarking database help to explain why.
The data in Figure 1 show that implementing high levels of automation in AP can lead to significant cost savings and cycle-time compression. We examined the performance differences between:
(1) the top-quartile performers that are very highly automated, defined as those organizations that report having 5 percent or less of invoice data entered manually, and
(2) the top-quartile performers at the other end of the automation spectrum, defined as those organizations that report having 90 percent or more of invoice data entered manually.
Unsurprisingly, the number of organizations that have completed APQC's AP benchmark survey and that we placed in the "highly automated" category is quite small. The vast majority remains highly dependent on manual data entry. Still, we have enough data to make our point: process automation offers attractive benefits. The highly automated group spends about one-third of what the non-automated group spends on AP, and it can process and pay invoices at twice the speed.