8 Key Operational KPIs Enhanced by AP Automation for SMBs
Ash Conversions International
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For growth-oriented small-to-medium-sized business (SMB) owners, leveraging technology to streamline processes and increase profits is essential. While some might assume that advanced tech solutions are only for larger enterprises, many innovative tools are tailored for SMBs.
Accounts payable (AP) automation systems exemplify this. These cloud-based solutions help businesses of all sizes manage their AP processes digitally, eliminating manual paper handling and processing.
The positive impact of AP automation on SMBs can be measured through these eight key performance indicators:
Reducing Invoice Processing Time
SMBs often face resource constraints that can delay manual invoice processing, sometimes taking days or weeks. This delay is exacerbated when multiple people need to review an invoice before payment.
SMB Automated AP systems streamline this by moving invoices electronically, ensuring they don’t get stuck or lost. Faster invoice processing leads to quicker payments and better cash flow management.
Speeding Up Invoice Approval Time
In a manual setup, paper invoices can pile up if someone in the approval chain is unavailable, causing delays.
Cloud-based AP systems allow remote approval with just a few clicks, ensuring that invoices move smoothly through the pipeline. This efficiency improves supplier relationships and opens up opportunities for early payment discounts.
Increasing Touchless Processing Rate
Touchless processing allows invoices to be handled completely by the automated AP system without human intervention, except in cases of discrepancies.
Advanced digital scanning technology minimizes data entry errors, enhancing the touchless processing rate and creating a seamless AP workflow that requires minimal manual input.
Lowering Exception Rate
The exception rate, or error rate, typically inversely correlates with the touchless processing rate. A lower exception rate signifies fewer errors and disruptions.
AP automation eliminates exceptions and duplicate entries, enhancing accuracy and ensuring faster, on-time payments without late penalties.
Boosting First-Time Match Rate
The first-time match rate (FMTR) measures how efficiently invoices match associated purchase orders. A higher FMTR indicates a more efficient AP system.
Manual processes are prone to data entry errors and delays, reducing FMTR. Automated AP systems with precise data capture eliminate these issues, significantly improving FMTR and overall system efficiency.
Improving Supplier Inquiry Response Time
Manual AP systems can make responding to supplier inquiries time-consuming, as staff must search through physical files, which can be misplaced.
Automated systems provide real-time invoice status, enabling quick, accurate responses to supplier queries. This rapid response builds trust and strengthens supplier relationships.
Enhancing Invoice Data Capture Accuracy
Manual data entry is error-prone, leading to process delays, audits, and slower payments.
Automated AP systems utilize sophisticated optical character recognition (OCR) technology for accurate data capture, saving time and reducing avoidable errors. This accuracy also benefits financial reporting and forecasting.
Optimizing Electronic vs. Paper Invoice Ratio
Cost-conscious SMBs benefit significantly from a higher ratio of electronic to paper invoices, which brings cost savings and supports sustainable growth.
Automated AP systems free up time for AP teams to focus on relationship-building and strategic decisions. They also reduce office expenses like paper, ink, and storage, contributing to a smaller environmental footprint.
Reap the Benefits of AP Automation with Ash Conversions International
Implementing AP automation can vastly improve your SMB's invoicing efficiency and profitability. By eliminating manual processing risks, you can enhance your bottom line with a solution from Ash Conversions International (ACI).
For over 40 years, ACI has transformed businesses with efficient, cost-effective solutions that offer complete AP invoice visibility, easy approval routing, centralized cloud-based processing, robust workflow reporting, and more.
Discover how your organization can benefit from automating the accounts payable process. Contact us at 800-719-9621.