Time to process invoices falls post-pandemic as automation benefits realized
Compared to 2020, automated non-PO invoice cycles are 7% faster and PO invoices were 4% faster in 2021, according to analysis of $180bn worth of global invoices
STOCKHOLM, April 29, 2022 - The automated invoice processing cycle time has reduced since 2020 as remote work has transformed accounts payable departments across the world as manual processes and approvals have been rapidly replaced by digital tools and high-degrees of automation.
According to a report by Medius, a leading Accounts Payable provider, invoice processing times fell for both non-PO and PO invoices. Compared to 2020, non-PO invoice cycles reduced by 7% from 7.2 days to 6.6, while PO-Invoice cycles reduced by 4% from 6.55 to 6.29 days. This is faster than the average invoice processing time, which according to the Ardent state of e-Payables is 10.3 days .
Most organizations improved their AP process performance, however, the gap between the average and best performers is surprisingly large. Best performers have achieved a PO-invoice processing time of 1 day, compared to the average customer, with a cycle of 6 days. For peak performance, AP teams need to identify improvement areas with their solution provider, data provider and suppliers. The trend is universal across all geographies, including the UK, US, and Sweden, and industries, such as construction, e-commerce, and financial services.
The report also shows strides made in touchless invoicing, the process by which invoices are captured and processed without user intervention. Touchless invoicing has increased over the past few years thanks to machine learning technology and improved reporting on touchless confidence levels. However, the data shows that since 2020, the average rate is down 2%, while for best-in-class performers the rate is up by 1%, perhaps indicating a lag in performance by newcomers to AP automation.
The data comes from the Medius Accounts Payable Automation Benchmark Report 2022 which provides new data for AP professionals, to give them the knowledge and insights they need to run a best-in-class accounts department. The report has taken data from thousands of organizations and millions of invoices to calculate KPI averages for invoices. The report guides readers through automation processes, and explains how to measure performance, and provides tactics to improve efficiency.
Speaking on the findings, Jim Lucier, CEO at Medius comments: “The pandemic forced companies to innovate, automate and streamline their back office processes. The result for the accounts payable team is a faster invoice cycle. A quicker process through automation means business leaders can make better decisions about their finances.
But it’s not just about speed. Companies should ensure a faster invoice cycle doesn’t compromise on quality. With the right tools, teams can speed up and use the latest technology to detect and prevent fraud too. Our analysis and report now equips AP professionals with the benchmark of what good looks like, and then how to get there.”
In the report, Medius highlights top industry performers including Reily Foods Company. The company replaced a manual invoice process using a legacy document management system and spreadsheets with Medius AP Automation to accelerate invoice processing throughout their North American operations.
Paul Fournet, Accounts Payable Supervisor, Reily Foods, total invoice processing cycle time 3.33 days: “We have nearly eliminated all manual work, allowing the AP team members to spend their time on more strategic, value-driven tasks, including tracking KPIs and developing continuous improvement policies and procedures. Plus, with Medius AP Automation, we have visibility like you would not imagine.”
Medius’s customer base includes organizations in all regions of the world, operating in a variety of industries and handling invoice volumes ranging from 10,000 to over 1 million supplier invoices annually. The average performance benchmark takes into account all companies in the database whereas the best-in-class benchmark represents an average of the top 10% best performing organizations.
Medius is a leading provider of cloud-based accounts payable automation solutions, helping organizations drive their business forward by enabling best-in-class process efficiency, cost saving opportunities and greater financial control.
Thousands of customers use Medius solutions, managing transactions worth more than $180 billion annually.
For more information, please visit medius.com.