Tech investments that truly pay off – Faster ROI with AP automation
Technology investments, especially AI-driven solutions, have been on the CFO agenda for years. However, they often struggle to find value, especially in the short term. According to PwC, 88% of CFOs and other business executives say they struggle to capture value from their technology investments. That is a high percentage and one that CFOs and executive boards alike will be looking closely at for next year's tech stack investments. There’s a big emphasis on getting practical by automating processes that impact day-to-day operations, like accounts payable, to simplify operations and get fast, visible results. FEI's insights emphasize the importance of these choices.
Let's dive into why AP automation is a smart tech investment and how it can deliver a faster ROI.
The true cost of manual accounts payable processes
Before understanding how AP automation delivers ROI, you must first understand the costs associated with manual AP processes. Inefficiencies, such as lost invoices, manual data entry errors, late payments, and time-consuming approvals, are only a few of the frustrations of traditional AP methods. These bottlenecks can lead to a domino effect of issues, such as strained supplier relationships, missed early payment discounts, and increased labor costs.
Look at one cost point: How much does it cost to process an invoice? Good question. There are a lot of variables that go into it, including PO vs. non-PO invoices, centralized vs. non-centralized finance, and more. But one thing is clear. Automation brings that cost down.
Businesses that still rely on manual processes could spend up to $15 to $40 per invoice when factoring in processing time, employee salaries, and error-related costs. The average cost per invoice now hovers around $9.87. Compare this to the cost of AP automation, where best-in-class companies spend between $3-4. Multiply that by hundreds, thousands, or hundreds of thousands, and that is a lot of money saved. And that’s just one stat of ROI.
How AP automation accelerates ROI
Cost savings
One of the quickest benefits of AP automation is reduced processing costs. You can slash invoice processing costs by as much as 80% by automating AP processes, as shown in our Medius AP Benchmark Report. These savings come from eliminating manual tasks, reducing errors, and optimizing payment cycles.
Faster processing times
AP automation drastically reduces the time it takes to process invoices. On average, it takes ten days to process a single invoice, while automated systems can process the same invoice in two to three days. Companies can take advantage of early payment discounts more frequently, adding to significant savings over time.
Fast and painless implementation
The right AP automation solution offers quick ROI from the ease of implementation, requiring no software installation. Cloud deployment ensures continuous hosting and support, while pre-packaged ERP connectors enable seamless integration - often in just days or weeks instead of months. With intelligent AI technology boosting efficiency and simplifying tasks, businesses can achieve rapid results with minimal disruption to workflows.
Improved cash flow management
Having clearer visibility into pending invoices and payment deadlines helps companies manage their cash flow more effectively. Automated systems give real-time insights into accounts payable, enabling CFOs and finance teams to make smarter decisions about when to pay vendors and how to handle working capital.
Increased supplier satisfaction
Automating AP processes not only helps your business but also strengthens supplier relationships. By ensuring timely and accurate payments and automating rapid responses to typical vendor inquiries, you can avoid late fees and keep suppliers happy, fostering long-term, mutually beneficial partnerships.
Reduction in fraud risk
The latest AI-backed AP automation solutions include built-in fraud detection and compliance features. Fewer human touchpoints significantly reduce the likelihood of invoice fraud or duplication. Automated systems help detect and prevent duplicate payments, unauthorized changes, and potential fraud by maintaining a digital audit trail.
Building a business case for AP automation
As 2024 draws closer to a close and 2025 approaches, executives will look at bridging the technology gaps and investing in automation solutions that lead to autonomous processes. Companies and professionals who understand how to maximize processes will be in demand as well, according to Deloitte. Now is the time to build a business case for AI-driven AP automation that can give your team fast ROI. If you haven’t already, start looking at ways to get your stakeholders on board and build your business case.
Start with accounts payable benchmarks
Take a look at accounts payable benchmarks, which provide valuable data on how top-performing companies leverage AP automation to stay ahead.
If you can demonstrate that over 90% of your invoices are processed touchlessly—meaning no manual intervention—you'll probably capture the attention you need to push your business case forward. By comparing your organization's AP performance to industry benchmarks, you quickly see where your company stands and highlight opportunities for improvement that will promise a big return for finance, IT, and your entire company.
Medius AP automation:
a worthwhile tech investment
AP automation is a smart tech investment that pays off fast and keeps offering long-term benefits. Medius makes AP hassle-free by using AI and ML to transform how invoices flow in and out of your business, all through a process that runs on its own and gets smarter with every step.
Learn more – and start getting value from your tech investments.
- Learn five ways to drive touchless accounts payable
- Talk to one of our experts. Book a demo.
- Hear from companies like yours. Read case studies.
