Improving Efficiency and Supplier Relations through Accounts Payable Automation

AP automation transforms accounts payable from a cost centre into a strategic enabler, driving efficiency, transparency, and stronger supplier relationships.

- By Srividya Kannan

The accounts payable function has long been viewed as a necessary but burdensome back-office operation.

Mountains of paper invoices, manual data entry, and endless approval cycles have traditionally defined this critical business process. However, the landscape is rapidly transforming as enterprises discover that AP automation delivers not just operational efficiency, but also strengthens the foundation of supplier relationships that drive business success.

As organizations grapple with increasing invoice volumes, regulatory compliance requirements, and the need for real-time financial visibility, the question is no longer whether to automate AP processes, but how quickly transformation can be achieved. The data tells a compelling story: companies implementing comprehensive AP automation report cost reductions of up to 80%, processing time improvements of 70%, and error rates dropping from 39% to below 0.5%.

A recent report surveying 35 large enterprises across multiple industries reveals that this transformation is accelerating. Over 76% of surveyed companies now process invoices within five days, reflecting improved workflows and faster cycles. However, significant opportunities remain—only 8.8% of organizations achieve outstanding OCR accuracy rates of 91-100%, while best-in-class performers process over 200 invoices per FTE per day through advanced automation.

THE FORCES DRIVING TRANSFORMATION

Traditional accounts payable processes carry costs that extend far beyond human resources. The Institute of Finance & Management reports that businesses using manual processes spend an average of $15 per invoice, compared to just $1.77 for those with automated systems. This dramatic difference reflects the true cost of inefficiency.