Increasingly, the AP department is seen as a strategic element within companies and an area that can contribute to profits; perhaps as a result, it’s being monitored more closely. These are several of the findings of a recent study of 550 AP and finance professionals around the globe, which was conducted by Basware Corporation.
At the same time, manual processes within many accounts payable functions adds time and cost to the system. For instance, 30 percent of respondents said they’ve missed early payment discounts within the past twelve months, while another 27 percent incurred late payment fees. Similarly, about one-quarter of survey participants said mistakes by their customers meant their firms had not received a payment due them.
Human errors, either in AP or procurement, are behind more than half the mistakes, such as missing early payment discounts, survey respondents said. Lack of communication between the AP and procurement departments is the reason for another one-quarter of mistakes.
Perhaps because of this, a majority of companies are steadily moving to streamline their finance processes. More than half (56 percent) of the processes surrounding spending are now automated, versus 50 percent in 2009. In addition, 46 percent of indirect spending is captured in companies’ PO systems, up from 42 percent a year ago. Finally, 44 percent of respondents predicted that electronic invoices for B2B purchases will replace paper-based invoices within the next five years.