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2013 AP Automation Study

The document is a 2013 study on accounts payable (AP) automation sponsored by several companies and published by The Institute of Financial Operations. It includes an executive summary of key findings from a survey of over 200 AP professionals. The survey found that while paper-based processes are declining, they still remain common. Invoice approval workflow was the top priority for AP automation. Cutting costs was the main driver of automation efforts. Competition for resources was the main challenge to implementing automation projects.

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Published July 2013 Copyright © 2013 by The Institute of Financial Operations All rights reserved. Reproduction or transmission of this publication in any form without the ex- press permission of the copyright holder is prohibited and is a violation of federal copyright law. The information contained herein has been diligently obtained from sources believed to be reliable and has been prepared with care. The Institute and the authors disclaim any and all warranties as to the accuracy and completeness of this information. The Institute and the authors, their directors, employees, or assistants can accept no liability for any damages or loss occasioned to any person, company, or entity due to errors or omissions in the information contained herein or in the interpretation thereof. The opinions expressed herein were developed from a global survey of users and the analyses may contain the opinions of the author and may change at any time without notice. This publication is designed to provide authoritative information at the time of publication in regard to the subject matter covered. It is not intended to offer accounting, legal, or other professional advice. If accounting, legal, or other professional advice is required, or if expert assistance is needed, the services of a competent professional person should be sought. This document or any part thereof may not be reproduced in any form without the express written permission of the publisher.
2013 AP Automation Study | 3 About The Institute of Financial Operations REVISED 9/12 The Institute of Financial Operations is a membership-based professional association serving the entire financial operations ecosystem, with a particular focus on the accounts payable and accounts receivable disciplines and the related fields of information management and data cap- ture. The Institute grew out of the merger of four associations: International Accounts Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the National Asso- ciation of Purchasing and Payables (NAPP), and The Association for Work Process Improvement (TAWPI). Based in Orlando, Fla., with affiliates in the U.S., Canada, and the UK, The Institute serves as a global voice, chief advocate, recognized authority, acknowledged leader, and principal educator for people in financial operations. The Institute has a community of nearly 70,000, which includes 9,000 members and customers, and an additional 61,000 financial operations professionals. The Institute’s members have access to benefits and leading-edge resources such as the award- winning Financial Ops magazine, a dynamic content-rich website, educational and networking events, online educational offerings, certification and certificate programs, career resources, and volunteer opportunities. The Institute of Financial Operations Project Team Jo E. LaBorde, Executive Director Laureen Crowley, Vice President of Communications and Editor in Chief Diane Sears, Director of Communications and Managing Editor Joe Stern, Director of Brand Management and Creative Design Mark Brousseau, Analyst About the sponsors Built on the premise that all payments are critical, Anybill was created in 2001 to transition any AP transaction to an automated solution. Anybill combines proprietary technology with un- matched customer service to deliver a complete software-as-a-service solution. Clients retain efficient workflows while gaining greater visibility and control, better cash flow management, streamlined approval processes, 24/7 accessibility, and increased auditor confidence. Anybill works with clients ranging from nonprofit associations to some of the largest multinationals. Anybill is headquartered in Washington, D.C., and is SSAE 16 SOC compliant. This report was sponsored in part by Anybill. Other sponsors include Image Integration Systems Inc. (DocuSphere), Iron Mountain Inc., Kofax, and ReadSoft.
2013 AP Automation Study | 4 Table of Contents EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Survey methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SURVEY RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 About the respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Processing invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Processing B2B payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Technology use and satisfaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Technology spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Survey questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2013 AP Automation Study | 5 Executive Summary For years, accounts payable automation has been a yet-to-be fulfilled promise. The industry has been saddled with high volumes of paper invoices and paper-based payments, particularly among smaller organizations. All of this paper has meant high costs, inefficient pro- cesses, many errors, slow processing turnaround, and a lack of visibility into key financial data. Additionally, the slow processing of paper invoices makes it difficult for companies to capture lucrative supplier discounts. Tools and technologies exist that can help eliminate this paper and drive better business out- comes across the financial supply chain: electronic invoicing, supplier portals, document scan- ning and data extraction, automated workflow solutions, electronic payments, dynamic discount capture, and more. Yet adoption has remained slow. Through the years, organizations have cited supplier resistance, limited internal resources, and tight capital budgets as reasons for holding off on AP automation. This annual study is designed to uncover key trends in AP automation. Has there been a seismic change since we conducted the study last year? No. But the results show that the field of finan- cial operations is making steady but gradual progress toward eliminating paper from invoice and payments processes. For example, the adoption of electronic invoicing and payments has increased since last year. Most respondents predict that the majority of their payments will be electronic within three years. Among key findings of the study: • Invoice approval workflow tops the list of respondents’ AP automation priorities for 2013. • Cutting the cost of processing AP transactions is the No. 1 factor in justify- ing automation. • Competing initiatives is the No. 1 obstacle to getting AP automation projects approved. • Centralized AP environments remain the most popular option among survey respondents. • There does not appear to be a widespread push to align AP and AR processes. • A plurality of respondents said it costs their organization $2 to $5 to process an invoice (paper or electronic), and their average cost to process an electronic invoice is less than $2. • The cost of invoice processing has stayed the same or been reduced for most organizations. • Invoice entry and payment error rates have stayed the same or been reduced for most organizations during the past 18 months. • Just 15.3 percent of respondents have considered trade finance as a part of their AP strategy. • Outsourcing is not yet prevalent when it comes to AP processing. • Despite pushes for digital billing, paper remains a staple in invoicing. • Nearly half of those who responded, 42.9 percent, said that their volume of total invoices has increased slightly (up to 10 percent) during the past year. • Purchase order-based invoices continue to be prevalent, representing the majority (52.8 percent) of invoices handled by those who responded to the survey. • Overall, the volume of paper invoices is trending downward.
2013 AP Automation Study | 6 • More than two-thirds of organizations process invoices in less than five days on average. • Many organizations are missing out on early payment discounts. • The majority of those who responded to the survey (54.7 percent) said there’s been no change in the importance of early payment discount capture to their organization. • Checks are still the most popular method of payment for business-to- business transactions, but this year’s survey illustrates the steady decline of paper-based payments. • Among survey respondents who are processing more business-to-business payments electronically, 49.2 percent reported a moderate increase, saying electronic business-to-business payments were up by 24 percent or less. • The use of P-card rebates as a source of revenue is being embraced by organizations. • Front-end imaging continues to be the most commonly used capture tech- nology in AP. • Some 76.7 percent of those who responded to the survey indicated that they do not use optical character recognition. • Nearly three-fourths of those who responded (73.9 percent) said they com- plete some type of prep work before processing an invoice. • SAP, PeopleSoft, and Oracle ranked highest when it came to enterprise resource planning (ERP) systems used by survey respondents. • Just 28 percent of those who responded said their organizations are using a supplier portal. • Invoice status is the most likely function to be supported through a supplier portal. • The majority of respondents who have a supplier portal are satisfied with the technology. • Respondents have mixed opinions on the value of integrating their travel and entertainment expense reporting and AP systems. • Nearly half of the survey respondents (47.5 percent) indicated that their or- ganization is not considering using cloud services or software-as-a-service for AP processing. • Capital spending for AP automation projects will be a bit higher in 2013. • For most organizations, just a fraction of their overall AP budget is dedicated to automation projects each year. Based on the findings of the study, it is clear that organizations have room to improve when it comes to AP automation. But the tide is clearly turning against paper-based AP business pro- cesses. Survey methodology In cooperation with its sponsors, Anybill, Image Integration Systems Inc. (DocuSphere), Iron Mountain, Kofax, and ReadSoft, The Institute of Financial Operations conducted qualitative and quantitative research among AP professionals into AP automation trends. The online survey was presented to several thousand AP professionals in early 2013. The survey was approximately 50 questions, including some that could be answered instantly with a single mouse click and others that were more complex and likely required the survey respondent to retrieve some information. Respondents were given three months to complete the survey. A total of 213 respondents completed the online survey, and 156 of the respondents answered every question (a 73 percent completion rate).
2013 AP Automation Study | 7 SURVEY RESULTS About the respondents Which of the following describes your job function? CFO - 0.5% CTO - 0% CEO - 0.9% COO - 0.5% Controller - 3.8% Treasurer - 0.5% Cash manager - 1.4% Finance executive - 1.9% Auditor - 0.5% AP manager - 37.4% AP supervisor - 15.6% AP director - 8.5% Operations manager - 3.3% Shared services manager - 2.4% Shared services supervisor - 0.5% Shared services director - 1.9% Other - 20.4% 0.5% 1.9% 0.5% 2.4% 3.3% 0.5% 0.5% 0.5% 1.4% 1.9% 3.8% 0.9% 20.4% 8.5% 15.6% 37.4% More than one-third of the survey respondents (37.4 percent) indicated that their job func- tion is AP manager. Some 15.6 percent of survey respondents are AP supervisors. Other titles represented by survey respondents include AP director, operations manager, controller, shared services manager, shared services director, finance executive, cash manager, CFO, and auditor. What are your company’s annual revenues? Less than $250 million - 18.9% $250 million to $500 million - 15.3% $500 million to $750 million - 5.8% $750 million to $1 billion - 9.5% $1 billion to $5 billion - 29.5% More than $5 billion - 21.1% 18.9% 15.3% 5.8% 9.5% 29.5% 21.1% A plurality of survey respondents (29.5 percent) indicated that their company has between $1 bil- lion and $5 billion in annual revenues. Some 21.1 percent of survey respondents stated that their company has more than $5 billion in annual revenues, while 18.9 percent of survey respondents indicated that their company has less than $250 million in annual revenues, and 15.3 percent stated that their company has between $250 million and $500 million in annual revenues. About one in 10 survey respondents (9.5 percent) indicated that their company has between $750 million and $1 billion in annual revenues, while the remaining 5.8 percent of survey respon- dents stated that their company has between $500 million and $750 million annually.
2013 AP Automation Study | 8 How would you describe your AP environment? Centralized - 61.4% Partially centralized - 15.9% Decentralized - 7.7% Shared service center - 15% 61.4% 15% 7.7% 15.9% Centralized AP environments remain the most popular option among survey respondents this year, with about six in 10 (61.4 percent) describing their organization’s AP environment that way. Additionally, 15 percent of survey respondents described their organization’s AP environment as a shared services center (a trend to watch in the future), while 15.9 percent of survey respon- dents stated that their organization’s AP environment is partially centralized. Only 7.7 percent of the survey respondents indicated that their organization’s AP environment is decentralized. Among survey respondents from companies with more than $5 billion in annual revenues, 47.5 percent said their AP environment is centralized, while 40 percent stated that their AP environ- ment operates in a shared services center. More than three-quarters of respondents from companies with less than $250 million in annual revenues (79.4 percent) described their AP environment as centralized. Has there been an executive-driven effort to have your AP and AR departments work more closely together? Yes - 18.5% No - 51.7% We are already tightly aligned. - 29.8% 29.8% 51.7% 18.5% There does not appear to be a widespread push among organizations to align AP and AR pro- cesses. Fewer than one-third of survey respondents (29.8 percent) reported that their organiza- tion’s AP and AR departments are operating in a “tightly aligned” fashion. Of the organizations whose AP and AR departments are not tightly aligned, just 18.5 percent stated that the executives at the top of their organization are driving an effort to get the two enti- ties to work more closely together.
2013 AP Automation Study | 9 More than one-third of survey respondents from companies with more than $5 billion in annual revenues (35.9 percent) said their AP and AR departments already are tightly aligned. A plurality of survey respondents from companies with less than $250 million in annual revenues (45.5 percent) said their AP and AR departments already are tightly aligned. Has there been an executive-driven effort to have your AP and procurement organizations work more closely together? Yes - 39.4% No - 31.3% We are already tightly aligned. - 29.3% 29.3% 31.3% 39.4% AP and procurement have a history of segregation in many organizations — even gaining the reputation of being silos. Interestingly, the survey findings suggest that there is an effort to inte- grate the two corporate powerhouses. More than one-third of survey respondents (39.4 percent) indicated that their organization has an executive-driven effort to more closely align AP and procurement, in addition to the nearly one- third of survey respondents (29.3 percent) who reported that the two departments already are tightly aligned in their organization. Fewer than one-third of survey respondents (31.3 percent) reported no effort by executives to bring AP and procurement more closely together. Nearly half of the survey respondents from companies with more than $5 billion in annual rev- enues (47.5 percent) said their company has an executive-driven effort to have AP and procure- ment work more closely together. Thirty percent of respondents from this group said the two departments already are tightly aligned in their organization. Some 44.1 percent of survey respondents from companies with less than $250 million in annual revenues said their company has an executive-driven effort to have AP and procurement work more closely together.
2013 AP Automation Study | 10 How many FTEs are you using for invoice entry and matching? Fewer than 5 - 37.6% 5 to 10 - 30.7% 11 to 15 - 11.9% 16 to 25 - 8.9% More than 25 - 10.9%37.6% 30.7% 8.9% 10.9% 11.9% Invoice entry and matching is a process that is still eating up the hours of full-time employees in many AP departments, with the number of survey respondents using more than 16 FTEs for the task growing slightly from a year ago. Fortunately, the majority of organizations can get by with 10 or fewer employees dedicated to the task. Some 37.6 percent of survey respondents reported that they use fewer than five FTEs for invoice entry and matching, compared with 42.8 percent a year ago. About one-third of survey respon- dents (30.7 percent) stated that they use five to 10 FTEs for invoice entry and matching, com- pared with 34.3 percent a year ago. Some 11.9 percent of survey respondents indicated that their organization uses 11 to 15 FTEs for invoice entry and matching (compared with 12.7 percent a year ago), while 8.9 percent stated that they use 16 to 25 FTEs for invoice entry and matching (compared with 3.6 percent a year ago) and 10.9 percent indicated that they use more than 25 FTEs for the task (compared with 6.6 percent a year ago). More than one-quarter of survey respondents from companies with more than $5 billion in an- nual revenues (27.5 percent) indicated that they use more than 25 FTEs for invoice entry and matching, while an equal percentage, 27.5 percent, said they use five to 10 FTEs for the task. More than two-thirds of survey respondents from companies with less than $250 million in an- nual revenues (69.7 percent) said they use fewer than 5 FTEs for invoice entry and matching.
2013 AP Automation Study | 11 What is your average cost to process invoices (both paper and electronic)? Less than $2 per invoice - 16.3% $2 to $5 per invoice - 27.9% $6 to $10 per invoice - 11.1% $11 to $15 per invoice - 4.8% $16 to $25 per invoice - 5.3% More than $25 per invoice - 1.9% Not sure - 32.7% 32.7% 11.1% 1.9% 16.3% 5.3% 27.9% 4.8% A plurality of survey respondents (27.9 percent) indicated that it costs their organization $2 to $5 to process an invoice (paper or electronic). Some 16.3 percent of survey respondents stated that it costs their organization less than $2 to process an invoice, while 11.1 percent pegged the cost at $6 to $10 per invoice. Twelve percent of survey respondents indicated that it costs their organization more than $10 to process a paper or electronic invoice, with 4.8 percent of survey respondents pegging their cost between $11 to $15 per invoice, 5.3 percent stating that it costs their organization $15 to $25 per invoice, and 1.9 percent indicating that their cost per invoice is more than $25. Surprisingly, nearly one-third of survey respondents (32.7 percent) indicated that they don’t know their cost to process a paper or electronic invoice. A plurality of respondents from companies with more than $5 billion in annual revenues said that it costs their organization $2 to $5 to process an invoice (paper or electronic). On the other end of the spectrum, a plurality of survey respondents from companies with less than $250 million in annual revenues (34.3 percent) said that it costs their organization less than $2 to process an invoice. What is your average cost to process paper invoices? Less than $2 per invoice - 12.2% $2 to $5 per invoice - 22.9% $6 to $10 per invoice - 14.6% $11 to $15 per invoice - 5.4% $16 to $25 per invoice - 7.3% More than $25 per invoice - 1% Not sure - 36.6% 36.6% 14.6% 1% 12.2% 7.3% 22.9% 5.4% The average cost to process paper invoices varied greatly among survey respondents, ranging from less than $2 per invoice to more than $25 per invoice. The greatest share of survey respondents — 22.9 percent — fell in the $2 to $5 range. The second most common cost bracket was between $6 and $10 per paper invoice, which was cited by 14.6 percent of survey respondents. Some 12.2 percent of survey respondents indicated that their average cost to process a paper invoice is less than $2.
2013 AP Automation Study | 12 Still, with 13.7 percent of survey respondents reporting average paper invoice processing costs of more than $10 per invoice, there is clearly room for improvement. Some 5.4 percent of survey respondents indicated that their average cost to process a paper invoice is $11 to $15, while 7.3 percent of respondents stated that their average cost to process a paper invoice is $15 to $25, and 1 percent of respondents pegged their average cost at more than $25 per invoice. Of those who responded to the question, more than one-third (36.6 percent) said that they were unsure of their average cost to process paper invoices. A plurality of survey respondents from companies with more than $5 billion in annual revenues (30 percent) indicated that it costs them $2 to $5 to process a paper invoice. Some 22.5 percent of survey respondents from this group said it costs their organization less than $2 to process a paper invoice. A plurality of survey respondents from companies with less than $250 million in annual revenues (27.3 percent) said they didn’t know their average cost to process a paper invoice. What is your average cost to process electronic invoices? 0.5% 0.5% 3.9% Less than $2 per invoice - 31.1% $2 to $5 per invoice - 15.5% $6 to $10 per invoice - 6.3% $11 to $15 per invoice - 3.9% $16 to $25 per invoice - 0.5% More than $25 per invoice - 0.5% Not sure - 42.2% 42.2% 15.5% 31.1% 6.3% A plurality of survey respondents (31.1 percent) indicated that their average cost to process an electronic invoice is less than $2. The second most common cost bracket is between $2 and $5 per electronic invoice, which was cited by 15.5 percent of survey respondents. Some 6.3 per- cent of survey respondents indicated that their average cost to process an electronic invoice is $6 to $10, while 3.9 percent of respondents pegged their average cost per electronic invoice at $11 to $15. Just 0.5 percent of survey respondents indicated that their average cost to process an electronic invoice is between $15 and $25, while another 0.5 percent of respondents stated that their aver- age cost to process an electronic invoice is more than $25. Of those who responded to the question, 42.2 percent said that they were unsure of their aver- age cost to process electronic invoices. The majority of survey respondents from companies with more than $5 billion in annual revenues (57.5 percent) said their average cost to process an electronic invoice is less than $2. Among survey respondents from companies with less than $250 million in annual revenues, 32.4 percent said their average cost to process an electronic invoice is less than $2, while an equal percentage, 32.4 percent, said they didn’t know their average cost to process an electronic invoice.
2013 AP Automation Study | 13 How have your costs to process an invoice changed in the past 18 months? 1.5% Increased significantly (more than 10 percent) - 1.5% Increased slightly (up to 10 percent) - 12.9% Have not changed - 45.8% Decreased slightly (up to 10 percent) - 31.8% Decreased significantly (more than 10 percent) - 8% 8% 45.8% 12.9% 31.8% The cost of invoice processing has stayed the same or decreased for most organizations during the past 18 months. Only 14.4 percent of survey respondents indicated that their cost to pro- cess an invoice increased slightly (12.9 percent) or significantly (1.5 percent) during the past 18 months. Nearly half of the survey respondents (45.8 percent) indicated that their cost of invoice pro- cessing has not changed during the past 18 months, while 31.8 percent of survey respondents stated that their cost of invoice processing has decreased slightly (by less than 10 percent) and 8 percent indicated that their cost of invoice processing decreased significantly (by more than 10 percent). The majority of survey respondents from companies with more than $5 billion in annual rev- enues (53.8 percent) said their costs to process an invoice have decreased slightly in the past 18 months. Nearly three-quarters of survey respondents from companies with less than $250 million in an- nual revenues (71.9 percent) said their costs to process an invoice have not changed in the past 18 months. How have your invoice entry and payment error rates changed in the past 18 months? 0.5% Increased significantly (more than 10 percent) - 0.5% Increased slightly (up to 10 percent) - 15.2% Have not changed - 53.4% Decreased slightly (up to 10 percent) - 24.5% Decreased significantly (more than 10 percent) - 6.4% 6.4% 53.4% 15.2% 24.5% Invoice entry and payment error rates have stayed the same or decreased for most organizations during the past 18 months. Only 15.7 percent of survey respondents indicated that their invoice entry and payment error rates have increased slightly (15.2 percent) or significantly (0.5 percent) during the past 18 months.
2013 AP Automation Study | 14 The majority of survey respondents (53.4 percent) indicated that their invoice entry and pay- ment error rates have not changed during the past 18 months, while 24.5 percent of survey respondents stated that their invoice entry and payment error rates have decreased slightly (by less than 10 percent) and 6.4 percent indicated that their invoice entry and payment error rates decreased significantly (by more than 10 percent). These results are on par with last year, when 12.5 percent of survey respondents indicated high- er invoice entry and payment error rates, while 36.7 indicated lower invoice entry and payment error rates and 50.9 percent said their invoice entry and payment error rates had not changed. Fifty-five percent of respondents from companies with more than $5 billion in annual revenues said their invoice entry and payment error rates have not changed during the past 18 months. More than two-thirds of respondents from companies with less than $250 million in annual rev- enues (69.7 percent) said their invoice entry and payment error rates have not changed during the past 18 months. Have you considered trade finance as a part of your AP strategy? 4.4% Yes, planning to deploy within 6 months - 4.4% Yes, planning to deploy within 12 months - 1% Yes, planning to deploy within 24 months - 0.5% Yes, but we have no plans to deploy trade finance - 9.4% No, we have not considered trade finance - 84.7% 84.7% 0.5% 1% 9.4% Trade finance as a tool in AP strategy appears not to have caught on fully among survey respon- dents. Just 15.3 percent of survey respondents indicated that they have considered trade finance as a part of their AP strategy. The remainder (84.7 percent) said they had not. Additionally, 9.4 per- cent of survey respondents stated that they have considered trade finance, but have no plans to deploy it. Two-thirds (66.7 percent) of survey respondents from companies with more than $5 billion in an- nual revenues indicated that they have not considered trade finance as part of their AP strategy. Not surprisingly, hardly any companies with less than $250 million in annual revenues, just 12.1 percent, have considered trade finance as part of their AP strategy.
2013 AP Automation Study | 15 Is your organization considering outsourcing its AP processing? We already outsource our AP processing - 5.3% Yes, within six months - 1% Yes, within 12 months - 0% Yes, within 24 months - 0.5% Yes, timing is unclear - 2.9% No - 81.1% Not sure - 9.2% 5.3% 1% 2.9% 0.5% 81.1% 9.2% Despite broader trends toward outsourcing across corporate America, such a practice is not yet prevalent when it comes to AP processing. The vast majority of survey respondents, 81.1 percent, indicated that their organization is not considering outsourcing its AP processing. Some 5.3 percent of survey respondents stated that their organization already outsources its AP pro- cessing, while 1 percent of respondents indicated that their organization is considering outsourc- ing its AP processing within six months and 0.5 percent stated that their organization is consid- ering outsourcing its AP processing within 24 months. Some 2.9 percent of survey respondents said their organization is considering outsourcing AP processing, but the timing of the project is not clear. A whopping 82.5 percent of survey respondents from companies with more than $5 billion in an- nual revenues indicated that their organization is not considering outsourcing its AP processing. Among survey respondents from companies with less than $250 million in annual revenues, 78.8 percent said their organization is not considering outsourcing its AP processing. What AP processing functions is your organization outsourcing or considering outsourc- ing? Already outsource Considering outsourcing No plans to outsource 0 5 10 15 20 25 30 35 40 Document receipt/sorting Document imaging Document archiving Datacapture/ dataentry Payment processing POand/or goodsreceipt matching 13 13 11 11 19 6 11 19 7 11 13 13 11 15 10 14 14 7 When respondents whose organizations are receptive to outsourcing were asked what they are most likely to send out-of-house, certain tasks bubbled to the surface.
2013 AP Automation Study | 16 A 35.1 percent plurality of the survey respondents who are receptive to outsourcing indicated that they are considering outsourcing document imaging. Some 29.7 percent of survey respon- dents stated that they are considering outsourcing document receipt and sorting, while 27.8 per- cent indicated that they are considering outsourcing document archival, and 20 percent stated that they are considering outsourcing data capture and data entry. Forty percent of survey respondents indicated that they already outsource data capture and data entry. Some 35.1 percent of survey respondents stated that they outsource document receipt and sorting, while 30.6 percent outsource document archiving and 30.6 percent outsource pay- ment processing. Among respondents from companies with more than $5 billion in annual revenues, data capture/ data entry was the top function that organizations are considering outsourcing. Processing Invoices How many total invoices (paper and electronic) are you processing monthly? 14.9% Fewer than 5,000 - 28.2% 5,001 to 10,000 - 19.9% 10,001 to 25,000 - 14.9% 25,001 to 40,000 - 12.2% More than 40,000 - 24.9% 24.9% 19.9% 28.2% 12.2% This year’s survey respondent pool represented a slightly larger share of organizations that are processing high volumes of invoices and a simultaneous decrease in the share of organizations that identify with the lowest level of invoice processing. About one-quarter of survey respondents (24.9 percent) indicated that their organization pro- cesses more than 40,000 total invoices per month (paper and electronic), compared with 15.8 percent a year ago. At the other end of the volume spectrum, 28.2 percent of survey respon- dents stated that their organization processes fewer than 5,000 invoices per month, compared with 37.6 percent a year ago. Some 19.9 percent of survey respondents indicated that their organization processes 5,000 to 10,000 total invoices per month (paper and electronic), while 14.9 percent of survey respondents stated that their organization processes 10,001 to 25,000 total invoices per month, and 12.2 percent of survey respondents indicated that their organization processes 25,001 to 40,000 total invoices per month. Sixty-five percent of survey respondents from companies with more than $5 billion in annual revenues said their organization processes more than 40,000 total invoices per month. A plurality of survey respondents from companies with less than $250 million in annual revenues indicated that their organization processes less than 5,000 total invoices per month.
2013 AP Automation Study | 17 What percentage of your total invoice volume is paper-based? More than 90 percent - 27.9% 75 percent - 18.4% 50 percent - 24.6% 25 percent - 13.4% 10 percent - 6.1% Less than 10 percent - 9.5% 9.5% 18.4% 6.1% 13.4% 27.9% 24.6% Survey results showed that despite pushes for digital billing, paper remains a staple in invoicing. A total of 70.9 percent of those who responded said that at least half of the invoices they handle are paper. A plurality of survey respondents, 27.9 percent, indicated that more than 90 percent of the invoices they handle are paper. Nearly one-quarter of survey respondents, 24.6 percent, stated that half of the invoices they handle are paper, while 18.4 percent indicated that 75 percent of their invoices they process are paper. Conversely, 13.4 percent of those who responded said that 25 percent of the invoices they handle are paper, while 6.1 percent said 10 percent of the invoices they handle are paper. Nearly one in 10 survey respondents, 9.5 percent, indicated that less than 10 percent of the invoices they handle are paper. A plurality of survey respondents from companies with more than $5 billion in annual revenues (32.5 percent) stated that 25 percent of the invoices they handle are paper. Conversely, 50 per- cent of the respondents from companies with less than $250 million in annual revenues indicated that more than 90 percent of the invoices they handle are paper — a tremendous opportunity for automation. How has your volume of total invoices changed over the past year? Increased significantly (more than 10 percent) - 14.3% Increased slightly (up to 10 percent) - 42.9% Unchanged - 21.4% Decreased slightly (up to 10 percent) - 18.7% Decreased significantly (more than 10 percent) - 2.7% 2.7% 42.9% 18.7% 14.3% 21.4% Nearly half of those who responded, 42.9 percent, said that their volume of total invoices has increased slightly (up to 10 percent) during the past year. Additionally, 14.3 percent of survey respondents stated that their volume of total invoices has increased significantly (more than 10 percent) during the past year.
2013 AP Automation Study | 18 About one in five respondents, 21.4 percent, indicated that their volume of total invoices has not changed during the past year. Some 18.7 percent of those who responded stated that their volume of total invoices has de- creased slightly (up to 10 percent) during the past year, while 2.7 percent of respondents indi- cated that their volume of total invoices has decreased significantly (more than 10 percent). A plurality of survey respondents from companies with more than $5 billion in annual revenues (42.5 percent) said their volume of total invoices has increased slightly during the past year. Simi- larly, nearly half of the survey respondents from companies with less than $250 million in annual revenues (43.3 percent) said their volume of total invoices has increased slightly during the past year. What is the percentage breakdown of your invoices among the following: .00 10.00 20.00 30.00 40.00 50.00 60.00 PO-based vendor invoices Non-PO-based vendor invoices Check requests for vendor Employee expense claims 9.14 12.15 52.83 35.08 Purchase order-based invoices continue to be prevalent, representing the majority (52.8 percent) of invoices handled by those who responded to the survey. Non-purchase order-based invoices were the second most common invoice type, representing 35 percent of invoices handled by respondents. Check requests for vendors represent 12.1 percent of the invoices handled by survey respon- dents, while employee expense claims represent 9.1 percent of invoices. PO-based vendor invoices represent 58.9 percent of the invoices handled by companies with more than $5 billion in annual revenues. Among companies with less than $250 million in annual revenues, PO-based vendor invoices represent 43.4 percent of their invoices.
2013 AP Automation Study | 19 Is PO automation an important component of an AP automation initiative? Yes - 72.6% No - 27.4% 72.6% 27.4% A successful AP automation initiative should incorporate purchase order automation, according to survey respondents. Roughly seven of 10 (72.6 percent) said that PO automation is an impor- tant component of an AP automation initiative, while almost three in 10 (27.4 percent) said it is not. A whopping 87.5 percent of survey respondents from companies with more than $5 billion in annual revenues said PO automation is an important component of an AP automation initiative. Seventy percent of survey respondents from companies with less than $250 million in annual revenues said PO automation is an important component of an AP automation initiative. What are the most important drivers to automating the management of POs and invoices? 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Achieving better control over spend and ensuring purchases are with preferred suppliers Eliminating mismatches and exceptions that lead to blocked invoices Simplifying invoice submission process from suppliers (through a PO-flip process) Other (please specify) 9% 36.1% 54.9% 48.1% In an era of attention to the bottom line, the top reason cited for automating POs and invoice management was, not surprisingly, related to finances. A total of 54.9 percent of organizations said a desire to achieve better control over spending and to ensure purchases are made with preferred suppliers is a key driver of automation. Accuracy also ranked high. A significant number (48.1 percent) said eliminating mismatches and exceptions that lead to blocked invoices is the most important driver of automation. Some 36.1 percent of survey respondents said making the supplier invoice submission process easier is a key motivator.
2013 AP Automation Study | 20 These results were in line with the findings of our study from a year ago. Survey respondents commented that other drivers to automating the management of POs and invoices included improving efficiency, accelerating payment turnaround, eliminating manual processes, and streamlining workflows. The majority of survey respondents from companies with more than $5 billion in annual revenues (51.4 percent) said eliminating mismatches and exceptions that lead to blocked invoices was the most important driver of automation. How has the volume of your paper invoices changed over the past year? 6.1% Significantly higher (more than 10 percent) - 6.1% Slightly higher (up to 10 percent) - 23.9% Unchanged - 21.7% Slightly lower (up to 10 percent) - 33.9% Significantly lower (more than 10 percent) - 14.4% 14.4% 21.7% 23.9% 33.9% Overall, the volume of paper invoices is trending downward. More survey participants (48.3 percent) said their volume of paper invoices is slightly lower or significantly lower than said it is higher. Nearly a quarter of respondents (23.9 percent) reported no change in their volume of paper invoices. Still, the survey indicates that many organizations have a lot of work to do in eliminating inefficient paper invoices: Nearly a third of respondents (30 percent) said their paper stacks, so to speak, are growing, indicating a need for more widespread deployment of automation processes. A plurality of survey respondents from companies with more than $5 billion in annual revenues (38.5 percent) said their volume of paper invoices has decreased slightly during the past year. Conversely, about one-third of survey respondents from companies with less than $250 million in annual revenues indicated that their volume of paper invoices has increased slightly during the past year.
2013 AP Automation Study | 21 How long on average does it take your department to process an invoice? Less than 3 days - 33.3% 3 to 5 days - 36.1% 6 to 10 days - 18.3% 11 to 15 days - 7.8% 16 to 25 days - 2.2% More than 25 days - 2.2% 2.2% 2.2% 36.1% 7.8% 33.3% 18.3% Respondents to this year’s survey report fast turnaround on their invoice processing. More than two-thirds of respondents said their organization processes invoices in less than five days on average. More than one-third of survey respondents (36.1 percent) said they process invoices in three to five days, while 33.3 percent of respondents indicated that they process invoices in less than three days. Some 18.3 percent of survey respondents said they process invoices in six to 10 days, while 7.8 percent said they process invoices in 11 to 15 days. Only a handful of respondents said it takes their organization 16 or more days to process an invoice. Some 35.9 percent of survey respondents from companies with more than $5 billion in annual revenues said their organization processes invoices in less than three days, while another 35.9 percent of survey respondents from this group said it takes their organization three to five days to process invoices. Forty percent of survey respondents from companies with less than $250 million in annual rev- enues indicated that it takes their organization less than three days to process an invoice. How has the average time it takes you to process an invoice changed over the past year? 3.9% 2.8% Significantly more days (more than 3 days) - 2.8% Slightly more days (up to 3 days) - 8.9% Unchanged - 59.8% Slightly fewer days (up to 3 days) - 24.6% Significantly fewer days (more than 3 days) - 3.9% 24.6% 59.8% 8.9% More than 28 percent of those who responded reported improvements in processing times, saying it took them slightly fewer days (24.6 percent) or significantly fewer days (3.9 percent) to process invoices.
2013 AP Automation Study | 22 The majority of respondents (59.8 percent) reported no change in the time it takes them to pro- cess an invoice. A minority of respondents — fewer than 12 percent — said their organizations were slightly slower (8.9 percent) or significantly slower (2.8 percent) compared with a year ago. The majority of respondents from companies with more than $5 billion in annual revenues (56.4 percent) said the time it takes their organization to process invoices has not changed in the past year. Among survey respondents from companies with less than $250 million in annual revenues, nearly two-thirds (63.3 percent) reported no change in the time it takes them to process an invoice. What percentage of early payment discounts do you typically capture? Less than 10 percent - 42.5% 10 percent to 24 percent - 9.5% 25 percent to 49 percent - 4.5% 50 percent to 74 percent - 10.1% 75 percent to 99 percent - 25.7% 100 percent - 7.8% 7.8% 9.5% 25.7% 10.1% 42.5% 4.5% The survey shows that many organizations are missing out on early payment discounts that could help the bottom line. The exception is companies with more than $5 billion in annual revenues: 43.6 percent of respondents in this group capture 75 percent to 99 percent of early payment discounts. A plurality of those who responded to the survey (42.5 percent) said they capture less than 10 percent of early payment discounts. On the other end of the spectrum, 7.8 percent of those who responded to the survey said they capture all early payment discounts, while 25.7 percent said they capture 75 percent to 99 per- cent of early payment discounts. Additionally, 10.1 percent of survey respondents indicated that they capture between 50 percent and 74 percent of early payment discounts, while 4.5 percent of survey respondents stated that they capture between 25 percent and 49 percent of early payment discounts, and 9.5 percent of respondents indicated that they capture between 10 percent and 24 percent of early payment discounts. A plurality of survey respondents from companies with less than $250 million in annual revenues (37.9 percent) said their organization captures less than 10 percent of early payment discounts.
2013 AP Automation Study | 23 In 2013, how will the importance of early payment discount capture to your organization change? Significantly more important - 12.7% Slightly more important - 29.3% No change - 54.7% Slightly less important - 2.2% Significantly less important - 1.1% 54.7% 12.7% 29.3% 2.2% 1.1% The majority of those who responded to the survey (54.7 percent) said there’s been no change in the importance of early payment discount capture to their organization. Nearly one-third of survey respondents (29.3 percent) stated that early payment discount cap- ture is slightly more important to their organization in 2013, while 12.7 percent of survey re- spondents indicated that early payment discount capture is significantly more important to their organization. Only a handful of those who responded to the survey said early payment discount capture is less important to their organization. Some 2.2 percent of respondents said early payment discount capture is slightly less important to their organization in 2013, while 1.1 percent of respondents stated that early payment discount capture is significantly less important to their organization. A plurality of respondents from companies with more than $5 billion in annual revenues (43.6 percent) said the importance of early payment discount capture has not changed in their organi- zation. Seventy percent of respondents from companies with less than $250 million in annual revenues said the importance of early payment discount capture has not changed in their organization.
2013 AP Automation Study | 24 Processing B2B payments For B2B payments, what methods do you use, and what portion of payments is made via each method? .00 10.00 20.00 30.00 40.00 50.00 60.00 Check ACH Accounts payable card 51.47 33.56 Wire 6.35 Purchasing card 9.00 2.93 Debit card 0.26 EDI 1.23 Checks are still the most popular method of payment for business-to-business transactions, but this year’s survey illustrates the steady decline of paper-based payments. When respondents’ answers were added and averaged, checks accounted for 51.5 percent of payments, compared with 57.1 percent of payments in last year’s survey. The survey showed continued growth for Automated Clearing House (ACH) payments. Survey respondents said ACH payments represent 33.6 percent of their transaction volume, compared with 25.5 percent in last year’s study. The next-closest payment type was the P-card, accounting for 9 percent of the payments vol- ume among those who responded to the survey. P-card’s share of business-to-business pay- ments was virtually unchanged from last year. Accounts payable cards represented 2.9 percent of the payments volume among those who responded to the survey. Wire transfer accounted for 6.4 percent of the payments volume among survey respondents. The use of debit cards, which have proved popular with consumers, was largely absent in re- spondents’ business-to-business payments. Overall, the results show that AP operations are shifting toward electronic means of payment but are still firmly entrenched in paper-based payment processes. Among companies with more than $5 billion in annual revenues, ACH represents a greater share of business-to-business payments than paper checks (46.8 percent to 37.4 percent, respec- tively). Paper checks represent 61.4 percent of the business-to-business payments among companies with less than $250 million in annual revenues.
2013 AP Automation Study | 25 Are you processing more B2B payments electronically today than you were three years ago? Yes - 75.3% No - 24.7% 75.3% 24.7% Electronic business-to-business payments are on the rise. Three quarters of those who responded to the survey (75.3 percent) said their organization is processing more business-to-business payments electronically, compared with three years ago. Just one-quarter of survey respondents (24.7 percent) indicated that their organization is not processing more electronic business-to-business payments electronically. A whopping 85.7 percent of survey respondents from companies with more than $5 billion in annual revenues said their organization is processing more business-to-business payments electronically compared with three years ago. Similarly, 86.2 percent of survey respondents from companies with less than $250 million in annual revenues said their organization is processing more business-to-business payments electronically compared with three years ago. What is the increase in B2B payments today compared with three years ago? 100 percent - 4.9% 75 percent to 99 percent - 5.7% 50 percent to 74 percent - 14.8% 25 percent to 49 percent - 25.4% 10 percent to 24 percent - 26.2% Less than 10 percent - 23% 23% 5.7% 25.4% 26.2% 14.8% 4.9% Among survey respondents who are processing more business-to-business payments electroni- cally, 49.2 percent reported a moderate increase, saying electronic business-to-business pay- ments are up by 24 percent or less. One-quarter said their electronic payments are up between 24 percent and 49 percent. Some 14.8 percent stated that their electronic payments are up between 50 percent and 75 percent, while 5.7 percent indicated that their electronic payments volumes are up between 75 percent and 99 percent. It was rare for organizations to see their volume of electronic payments double during the past three years: Only 4.9 percent of those who responded said they have seen an increase of 100 percent.
2013 AP Automation Study | 26 Companies with less than $250 million in annual revenues may be processing more electronic payments than three years ago, but the volume increase is hardly overwhelming. A plurality of survey respondents from this group (41.7 percent) indicated that their organization processes less than 10 percent more electronic business-to-business payments compared with three years ago. With regard to electronic payments, which of the following applies to your organization? Most of our B2B payments already are electronic. - 36.1% We have a strategy and are in the process of migrating to electronic payments. - 32.5% We have defined a strategy to migrate to electronic payments but have not begun the process. - 6.6% We have not migrated to electronic payments but plan to do so. - 10.8% We have no plans at this time to migrate to electronic payments. - 13.9% 6.6% 13.9% 10.8% 36.1% 32.5% Organizations have made tremendous progress in migrating to electronic payments during the past year. About one-third of those who responded to the survey (36.1 percent) said the majority of their business-to-business payments are electronic, compared with 20.6 percent of respondents in last year’s survey. Additionally, 32.5 percent of survey respondents indicated that their organization has a strategy in place for migrating to electronic payments. Last year’s survey reported that 38.7 percent of organizations had a strategy in place for migrating to electronic payments. Some 6.6 percent of respondents stated that their organization has defined a strategy for migrat- ing to electronic payments but has not started the process. And 10.8 percent of survey respon- dents indicated that their organization has not started migrating to electronic payments, but plans to do so. One in seven respondents said their organization has no plans to migrate to electronic pay- ments. Half of the respondents from companies with more than $5 billion in annual revenues (55.9 per- cent) said the majority of their organization’s business-to-business payments already are elec- tronic. Surprisingly, a plurality of survey respondents from companies with less than $250 million in annual revenues (35.7 percent) said the majority of their organization’s business-to-business payments already are electronic.
2013 AP Automation Study | 27 How long do you expect it will be until the majority of your B2B payments will be complet- ed electronically? Less than 1 year - 22% 2–3 years - 59.8% 3–4 years - 8.5% More than 4 years - 9.8% 9.8% 22% 59.8% 8.5% The tide is clearly turning in the adoption of electronic business-to-business payments. More than three-quarters of those who responded to the survey expect that within three years, the majority of their business-to-business payments will be completed electronically. Nearly two-thirds of those who responded to the survey (59.8 percent) expect that in two to three years the majority of their business-to-business payments will be completed electronically, while 22 percent of survey respondents said they expect that within the next year the majority of their business-to-business payments will be completed electronically. Some 8.5 percent of survey respondents expect that in three to four years the majority of their business-to-business payments will be completed electronically. Just 9.8 percent of survey respondents indicated that it will be more than four years before the majority of their business-to-business payments are completed electronically. Technology use and satisfaction Which of the following do you use? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Variable (dynamic) discounting tools 13.1% P-card rebates 66.4% AP card rebates (e.g. AP card, ghost card) 43.1% Procurement catalogs 33.6% E-invoice submission process 51.8% financing Supply chain 8% This question sought to measure the market saturation of various tools and technologies avail- able to AP departments. Clearly, the use of purchasing card rebates as a source of revenue generation is being embraced by organizations. A whopping 66.4 percent of survey respondents said they use P-card rebates, while 43.1 percent reported taking advantage of AP card rebates.
2013 AP Automation Study | 28 The survey also shows significant growth in the number of organizations using electronic invoic- ing submission processes and procurement catalogs, compared with a year ago. More than half of the survey respondents (51.8 percent) indicated that they use an electronic in- voicing submission process. Last year’s survey found that one-third of organizations were using an electronic invoicing submission process. Some 33.6 percent of survey respondents indicated that they use procurement catalogs. Last year’s survey found that one-fifth of organizations were using procurement catalogs. Variable discounting tools and supply chain financing came in as the least used options. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said they use P-card rebates, while 55.9 percent said they use e-invoicing. A plurality of survey respondents from companies with less than $250 million in annual revenues said they use e-invoicing, topping all other tools and technologies listed in the survey. What types of capture technology are you using? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Front-end imaging 57.9% Front-end extraction of document data 19.5% Post-workflow archiving 39.6% None of the above 25.6% Front-end classification 18.3% Front-end imaging continues to be the most commonly used capture technology in AP depart- ments, although post-workflow archiving is gaining in popularity. The majority of those who responded to the survey (57.9 percent) said their organization uses front-end imaging, a significant increase from last year when 47 percent said they used the tech- nology. A total of 39.6 percent of survey respondents indicated that they use post-workflow archiving, up slightly from last year’s survey when 36 percent of organizations reporting using the technology. Some 19.5 percent of those who responded to the survey said their organization uses front-end extraction of document data, while 18.3 percent of survey respondents stated that their organi- zation uses front-end classification. There is a large contingent of respondents who don’t identify themselves as users of the most common capture technologies. About a quarter of respondents reported using none of the tech- nologies listed. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said their organization uses front-end imaging technology. Post- workflow archiving is the top capture technology used by companies with less than $250 million in annual revenues.
2013 AP Automation Study | 29 Does your organization use OCR technology to capture invoice data? Yes - 23.3% No - 76.7% 76.7% 23.3% Optical character recognition (OCR) technology replaces manual data entry by automatically interpreting invoice data and validating that data to ensure accuracy in downstream systems. Some 76.7 percent of those who responded to the survey indicated that they do not use OCR, compared with last year when 80.6 percent said they did not use the technology. With more than three-quarters of respondents reporting that they do not currently use the tech- nology to capture invoice data, this is an area ripe for expansion in the AP automation segment. Nearly three-quarters of survey respondents from companies with more than $5 billion in annual revenues (73.5 percent) said their organization does not use OCR technology to capture invoice data. Among companies with less than $250 million in annual revenues, just 14.3 percent use OCR. What are the primary reasons your organization does not use OCR technology? (Check all that apply.) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Lack of capital 21.8% Lack of a compelling business case 34.5% Unimpressed with the solutions on the market 16% Concerns about managing the change 6.7% Poor past experiences with OCR technology 6.7% Other 26.1% Lack of internal resources to support project 37.8% When asked why organizations do not employ OCR technology, the lack of internal resources and money, as well as the lack of a compelling business case, are the primary barriers cited. More than one-third of those who responded to the survey (37.8 percent) said a lack of internal resources.
2013 AP Automation Study | 30 Some 34.5 percent of survey respondents cited the lack of a compelling business case as the primary reason their organization does not use OCR technology, while 21.8 percent identified a lack of capital. Sixteen percent of those who responded to the survey said they were unimpressed with the OCR solutions on the market. Concerns about managing change were cited by 6.7 percent of survey respondents. Another 6.7 percent of survey respondents blamed poor past experiences with OCR. Among respondents from companies with less than $250 million in annual revenues, lack of a compelling business case was the top reason cited for not using OCR technology. What invoice types are you processing? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Electronic 59.4% Paper,withpurchaseorder 84.2% Paper,non-purchaseorder 87.9% Paper,checkrequests forvendors 72.1% Paper,employee expenseclaims 52.1% Emailattachment/submission77.6% Fax 55.2% Webforminvoicesubmission 27.9% EDI 43.6% The survey backs up what most AP professionals already know: Organizations today are dealing with multiple types of invoices, and there’s still no getting away from old-fashioned paper. Some 87.9 percent of survey respondents said they process paper invoices without POs, and 84.2 percent of respondents said they process paper invoices with POs. Email submissions are the third most common type of invoice, with 77.6 percent of respondents processing them. Nearly two-thirds of those who responded to the survey (59.4 percent) said they process elec- tronic invoices, while 52.1 percent of respondents said they process paper employee expense claims. Surprisingly, fax submissions are hanging on fairly well, with 55.2 percent of organizations pro- cessing invoices via facsimile. Additionally, 43.6 percent of survey respondents indicated that they process EDI invoices. Just 27.9 percent of survey respondents said they process Web form invoice submissions.
2013 AP Automation Study | 31 A stout 88.6 percent of survey respondents from companies with more than $5 billion in annual revenues stated that their organization processes paper invoices with POs. Some 88.9 percent of survey respondents from companies with less than $250 million in annual revenues said their organization processes paper invoices without POs, while 74.1 percent of re- spondents from this group indicated that their organization processes paper invoices with POs. Do you perform any invoice prep work before processing? Yes - 73.9% No - 26.1% 26.1% 73.9% Although the ultimate goal of AP automation is to allow invoices to be processed with little to no human intervention, the reality for most organizations has not caught up with the ideal. Nearly three-fourths of those who responded (73.9 percent) said they complete some type of prep work before processing an invoice, far outpacing those who said they do not (26.1 percent). These results are nearly identical to the findings of last year’s survey. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said they complete some type of prep work before processing an invoice. Among survey respondents from companies with less than $250 million in annual revenues, 69.2 percent said their organization completes some type of prep work before processing an invoice.
2013 AP Automation Study | 32 What ERP system are you currently using? JD Edwards - 3.6% Lawson - 7.8% Microsoft - 4.2% Oracle - 12% PeopleSoft - 14.4% SAP - 21% WorkDay - 0.6% No ERP system - 9% Other - 27.5% 3.6% 7.8% 4.2% 9% 0.6% 27.5% 14.4% 21% 12% SAP, PeopleSoft, and Oracle ranked highest when it came to enterprise resource planning (ERP) systems used by survey respondents. One in five survey respondents use SAP, while PeopleSoft and Oracle each have roughly one-sixth of the market. Lawson, Microsoft, and JD Edwards each pulled in smaller shares of the market. Relative newcomer WorkDay is used by 0.6 percent of respondents. About 27.5 percent of respondents said they used some form of ERP other than those men- tioned by name in the survey. Deltek emerged as the most popular choice in the “other” catego- ry, but it was among more than three dozen systems mentioned, indicating a fragmented market for ERP systems. SAP is the most commonly used ERP system among companies with more than $5 billion in an- nual revenues. Microsoft is the most popular ERP system among respondents from companies with less than $250 million in annual revenues, identified by 14.8 percent of respondents in this group. Are you using a supplier portal? Yes - 28% No - 72% 72% 28% An effective supplier portal can reduce invoice capture and entry costs as well as expenses related to routine vendor inquiries. Yet despite those benefits, just 28 percent of those who re- sponded said their organizations are using a supplier portal of any kind. The remaining 72 percent of those who responded said they do not use a supplier portal. The majority of survey respondents from companies with more than $5 billion in annual revenues (57.1 percent) said their organization is using a supplier portal. On the other hand, only 11.1 per- cent of companies with less than $250 million in annual revenues are using a supplier portal.
2013 AP Automation Study | 33 Which of the following would be the most important driver of your decision to implement a supplier portal? Invoice status - 37.8% PO-flip invoice submittal - 7.2% Non-PO invoice submittal - 7.2% PDF/document invoice submittal - 18.9% Self-service Web form invoice submittal - 21.6% Payment submittal - 7.2% 7.2% 7.7% 7.7% 18.9% 21.6% 37.8% Organizations want their supplier portal to enable them to easily communicate invoice status — a task that can otherwise eat up valuable staff hours — and to allow suppliers to submit their invoices online. Invoice status was cited as the most important driver for implementing a supplier portal for more than a third of survey respondents (37.8 percent), while self-service Web form invoice submittal is the key driver for 21.6 percent of respondents. Among those who responded to the survey, 18.9 percent said being able to submit invoices as PDF files is the most important driver for implementing a supplier portal. Other considerations — including submitting non-purchase order invoices (7.2 percent), PO-flip invoice submittal (7.2 percent) and payment submittal (7.2 percent) — are not as great a concern. Forty percent of survey respondents from companies with more than $5 billion in annual revenues said self-service Web form invoice submittal is the key driver for implementing a supplier portal. A plurality of survey respondents from companies with less than $250 million in annual revenues (31.8 percent) said self-service Web form invoice submittal is the key driver for implementing a supplier portal.
2013 AP Automation Study | 34 Who owns the management of the supplier portal? Procurement - 43.4% Accounts payable - 39.6% Treasury - 1.9% Other - 15.1% 1.9% 39.6% 15.1% 43.4% Of those who use a supplier portal, organizations were split when it came to who owns the man- agement of the portal. Some 43.4 percent said procurement manages the supplier portal, while 39.6 percent said the responsibility belongs to AP. Additionally, 1.9 percent said treasury owns management of the portal. Fifteen percent of respondents said another entity is in charge, with examples including account- ing, “data quality,” a third party, and IT. The majority of survey respondents from companies with more than $5 billion in annual revenues (52.4 percent) said AP owns their supplier portal. Where is it housed? On premises - 65.4% In the cloud - 34.6% 34.6% 65.4% Respondents also were split in regard to where their supplier portal is housed, with nearly two- thirds (65.4 percent) saying it is on premises and 34.6 percent saying it is “in the cloud.” Among survey respondents from companies with more than $5 billion in annual revenues that use a supplier portal, 76.2 percent said it is on premises. Eighty percent of survey respondents from companies with less than $250 million in annual revenues said their supplier portal is “in the cloud.”
2013 AP Automation Study | 35 Which of the following AP functions are supported through your supplier portal? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Invoicestatus 89.8% Non-POinvoicesubmittal 22.4% PDF/documentinvoicesubmittal 30.6%Self-serviceWebform invoicesubmittal 46.9% Paymentsubmittal 22.4% Disputemanagement 28.6% Presentationofearly paymentdiscountoffers 12.2% Self-serviceaccount maintenance/updates 34.7% PO-flipinvoicesubmittal 42.9% Invoice status is far and away the most likely function to be supported through a supplier portal. Of the respondents who have a supplier portal and provided details about its functionality, 89.8 percent said it supports invoice status. Other functions are not as well supported. Some 46.9 percent of survey respondents said self-service Web form invoice submittal is supported, and 42.9 percent of respondents said PO-flip invoice submittal is supported. Ad- ditionally, 34.7 percent of survey respondents with a supplier portal said self-service account maintenance is supported, while 30.6 percent said PDF invoice submittal is supported, and 28.6 percent said dispute management is supported. Some 22.4 percent of survey respondents who have a supplier portal indicated that payment submittal is supported, and 22.4 percent stated that non-PO-based invoice submittal is sup- ported. Just 12.2 percent of survey respondents with a supplier portal said the presentment of early pay- ment discount offers is supported. Among the respondents from companies with more than $5 billion in annual revenues that use a supplier portal, all of them said their portal supports invoice status. Similarly, a plurality of survey respondents from companies with less than $250 million in annual revenues (60 percent) said their portal supports invoice status.
2013 AP Automation Study | 36 How satisfied are you with your supplier portal? Extremely satisfied - 17% Satisfied - 44.7% No opinion - 25.5% Dissatisfied - 10.6% Extremely dissatisfied - 2.1% 2.1% 44.7% 25.5% 10.6% 17% The majority of respondents who have a supplier portal are satisfied with the technology. Some 44.7 percent of the respondents who have a supplier portal say they are “satisfied” with the technology, while 17 percent of respondents who have a supplier portal say they are “ex- tremely satisfied.” Conversely, 10.6 percent of respondents who have a supplier portal say they are “dissatisfied” with the technology, while 2.1 percent of respondent said they are “extremely dissatisfied.” One-quarter of survey respondents who have a supplier portal said they have no opinion on the technology. Among companies with less than $250 million in annual revenues that have a supplier portal, 75 percent of survey respondents said they have no opinion about the technology. Is your T&E expense management system integrated with your AP solution? Yes - 44.8% No - 55.2% 55.2% 44.8% There is a clear trend toward organizations integrating travel and entertainment expense man- agement with accounts payable solutions. This year, 44.8 percent said the systems are integrated, compared with 55.2 percent who said their systems are not integrated. The majority of survey respondents from companies with more than $5 billion in annual revenues (54.3 percent) said their T&E expense management system is integrated with their AP solution. Conversely, 77.8 percent of survey respondents from companies with less than $250 million in annual revenues said their T&E expense management system is not integrated with their AP solution.
2013 AP Automation Study | 37 Do you believe that integrating your T&E and AP systems would provide significant ben- efits? Yes - 34.8% No - 37% Not sure - 26.1% They are already integrated. - 2.2% 2.2% 37% 26.1% 34.8% Survey respondents have mixed opinions on the value of integrating their T&E and AP systems. A plurality of survey respondents (37 percent) said they don’t see significant benefits in integrat- ing their T&E and AP systems. A slightly lower percentage (34.8 percent) see significant benefits in integrating their T&E and AP systems. Perhaps more telling is how many people have not made up their minds on the integration issue: 26.1 percent said they are unsure whether such a move would offer significant benefits. Some 2.2 percent of survey respondents indicated that their T&E and AP systems are already integrated. Nearly two-thirds of respondents from companies with more than $5 billion in annual revenues (62.5 percent) said they don’t see significant benefits in integrating their T&E and AP systems. Among respondents from companies with less than $250 million in annual revenues, 47.6 percent said they aren’t sure that there were significant benefits in integrating their T&E and AP systems. Is your organization considering using cloud services or software-as-a-service for AP processing? We already do - 8% Yes, within six months - 1.9% Yes, within 12 months - 4.9% Yes, within 24 months - 0% Yes, timing is unclear - 8.6% No - 47.5% Not sure - 29% 29% 47.5% 8% 8.6% 4.9% 1.9% Nearly half of the survey respondents (47.5 percent) indicated that their organization is not considering using cloud services or software-as-a-service for AP processing. These results are nearly identical to the findings of last year’s survey.
2013 AP Automation Study | 38 Some 8.6 percent of survey respondents stated that their organization is considering using cloud services or software-as-a-service for AP processing, but the timing is unclear. Some 1.9 percent of survey respondents stated that their organization is considering using cloud services or soft- ware-as-service for AP processing within six months, while 4.9 percent said their organization is considering using cloud services or software-as-a-service for AP processing within 12 months. Approximately one-third of survey respondents (29 percent) aren’t sure whether their organiza- tion is considering using cloud services or software-as-a-service for AP processing. Sixty percent of survey respondents from companies with more than $5 billion in annual rev- enues said their organization is not considering cloud services or software-as-a-service for AP processing. The majority of respondents from companies with less than $250 million in annual revenues (51.9 percent) said their organization is not considering cloud services or software-as-a-service for AP. What do you see as the biggest benefit of cloud services or software-as-a-service for AP processing? Fast startup - 12.1% No capital investment - 10.7% Lower cost per invoice - 17.1% Reduced operational risk - 5.7% Rapid return on expense - 4.3% No software or hardware - 15.7% Minimal IT involvement - 29.3% Other - 5% 4.3% 12.1% 10.7% 5% 17.1% 29.3% 5.7%15.7% When it comes to the cloud, respondents are particularly fond of the fact that it requires minimal IT involvement. Some 29.3 percent of respondents said that was the top draw of the technol- ogy. Similarly, organizations like the fact that cloud services or software-as-a-service require no software or hardware — a benefit cited by 15.7 percent of respondents. Cloud services are also earning points for lower costs (cited by 17.1 percent of respondents), fast startup (12.1 percent), no capital investment (10.7 percent), and reduced operational risk (5.7 percent). Some 4.3 percent of survey respondents said rapid return on investment is the big- gest benefit of cloud services or software-as-a-service for AP processing. A handful of respondents are unsure of the benefits of cloud services or software-as-a-service for AP processing, and one respondent doesn’t see any benefits of the technology for AP pro- cessing. A plurality of respondents from companies with more than $5 billion in annual revenues (25 per- cent) like the fact that cloud services or software-as-a-service don’t require software or hard- ware. Among respondents from companies with less than $250 million in annual revenues, 34.8 percent said minimizing IT involvement is the biggest benefit of cloud services or software-as-a- service.
2013 AP Automation Study | 39 What do you see as potential disadvantages of cloud services or software-as-a-service for AP processing? Runs counter to IT mandate for on-premises solution - 4.2% Limited ability to customize a solution - 16.1% Lack of control over changes to software - 11.2% Problems integrating with ERP solutions - 13.3% Potential problems with bandwidth, connectivity, or “down” time - 9.1% Risks to our data security - 25.9% Concerns with service-level agreements - 2.8% Cost - 11.9% Other - 5.6% 4.2% 16.1% 5.6% 25.9% 2.8% 11.9% 9.1% 11.2% 13.3% There is less consensus when it comes to potential downfalls of cloud services and software- as-a-service. Answers to the question were fragmented, but risk was atop the list. Risk to data security was cited by 25.9 percent of respondents, up from 19 percent in last year’s survey. Risk to data security was followed by limited customization (cited by 16.1 percent of respon- dents), problems integrating with ERP systems (13.3 percent), cost (11.9 percent), lack of control over software changes (11.2 percent), and potential downtime or problems with connectivity (9.1 percent). Nearly one-third of survey respondents from companies with more than $5 billion in annual revenues (31.3 percent) said risk to data security is the biggest potential disadvantage to cloud services or software-as-a-service. A plurality of survey respondents from companies with less than $250 million in annual revenues (28 percent) said risk to data security was the biggest potential disadvantage of cloud services or software-as-a-service.
2013 AP Automation Study | 40 Technology spending How does your 2013 capital budget for AP automation projects compare with your budget for 2012? 8.2% Significantly higher (more than 5 percent) - 8.2% Slightly higher (up to 5 percent) - 16.4% Unchanged - 56.8% Slightly lower (up to 5 percent) - 8.9% Significantly lower (more than 5 percent) - 9.6% 9.6% 56.8% 16.4% 8.9% The survey shows that capital spending for AP automation projects will be a bit higher in 2013. One-sixth of survey respondents (16.4 percent) said their capital budgets for AP automation projects are slightly higher this year. Last year, 13 percent of survey respondents said their capital budgets for AP automation projects were slightly higher (defined as an up to 5 percent increase) compared with the previous year. Additionally, 8.2 percent of survey respondents said their capital budgets for AP automation projects are significantly higher than a year ago, up from 7.6 percent in last year’s survey. But AP technology vendors shouldn’t pop the champagne corks just yet. The majority of survey respondents (56.8 percent) said their capital budgets for AP automation projects remain unchanged compared with a year ago. Worse, 8.9 percent of survey respon- dents indicated that their capital budgets for AP automation projects are slightly lower this year, while 9.6 percent of survey respondents stated that their capital budgets are significantly lower. A plurality of survey respondents from companies with more than $5 billion in annual revenues (38.7 percent) said their capital spending for AP automation projects will not change in 2013. Sixty-eight percent of survey respondents from companies with less than $250 million in annual revenues said their capital spending for AP automation projects will not change in 2013.
2013 AP Automation Study | 41 How much of your overall AP budget is spent on automation projects each year? More than 25 percent - 4.2% 15 percent to 25 percent - 5.6% 10 percent to 14 percent - 11.3% 7.5 percent to 9.5 percent - 6.3% 2.5 percent to 7 percent - 14.1% Less than 2.5 percent - 58.5% 58.5% 5.6% 4.2% 14.1% 6.3% 11.3% For most organizations, just a fraction of the overall budget is dedicated to automation projects each year. Some 58.5 percent of respondents said less than 2.5 percent of their AP budget is spent on automation projects. The second most prevalent answer was between 2.5 percent and 7 percent of the budget, which is the case for 14.1 percent of respondents. Some 11.3 percent of respondents said between 10 percent and 14 percent of their annual AP budgets are spent on automation projects, while 6.3 percent said between 7.5 percent and 9.5 percent of their annual AP budgets are spent on automation projects. Just 9.8 percent of respondents said their organization spends 15 percent or more of their AP budget on automation projects. It is important to note that about one-third of survey participants skipped the question, perhaps indicating unfamiliarity with their organization’s spending habits. Among survey respondents from companies with less than $250 million in annual revenues, 76 percent said that less than 2.5 percent of their AP budget is spent on automation projects.
2013 AP Automation Study | 42 What are your operational priorities for AP automation in 2013? Rank the items below, with 1 being the most important and 11 being the least important. .00 2.00 4.00 6.00 8.00 10.00 12.00 Documentimaging 4.76 Automaticmatching 5.32 Workflow/invoiceapproval 3.80 E-invoicing 4.94 EDI 6.62 ACH 4.71 T&Eautomation 6.88 Outsourcing 9.96 ERPintegration 6.92 Improvingtax/legalcompliance 6.96 Datacapture/OCR 5.14 Invoice approval workflow tops the list of respondents’ AP automation priorities for 2013, with a mean rating of 3.80 on a scale of 1 to 11 (with 1 being the most important). Among the top priorities of survey respondents, invoice approval workflow is followed by ACH, which received a mean rating of 4.71, and document imaging, which received a mean rating of 4.76. E-invoicing is the fourth-highest priority of survey respondents in 2013, with a mean rating of 4.94. Other top AP automation priorities of survey respondents included data capture/OCR (with a mean rating of 5.14) and automated matching (with a mean rating of 5.32). Outsourcing received the lowest ranking among the AP automation priorities provided in the questionnaire. Among companies with more than $5 billion in annual revenues, invoice approval workflow, e-invoicing, ACH, and automated matching are the top priorities for AP automation in 2013. Invoice approval workflow is the top operational priority identified by survey respondents from companies with less than $250 million in annual revenues.
2013 AP Automation Study | 43 Which of the following factors are the most important in justifying the cost of AP automa- tion projects? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Fewermistakes/higheraccuracy 65.7% Improvedmetricstounderstand andreduceexceptions 39.9% Increasedvisibility 49.7% Optimizingworkingcapital 24.5% Quickerturnaroundtimes 49.7%Reducedcostofprocessing APtransactions 76.9% Immediaterecordingofliabilities 33.6% Improveddatacapturefor bettercontroloverspend 35% FTEredeployments 44.1% Takingadvantageofdiscounts 39.9% EnsuringVATorothertaxcompliance 14% Improvingmastervendorfilemanagement 29.4% Other 2.1% Cutting the cost of processing AP transactions is the No. 1 factor in justifying AP automation projects, cited by 76.9 percent of survey respondents. Nearly as important is a decrease in mistakes, which was identified by 65.7 percent of survey respondents. Quicker turnaround times and increased visibility also are important to about half of the respondents. Some 86.7 percent of survey respondents from companies with more than $5 billion in annual rev- enues said cutting the cost of processing is the No. 1 factor in justifying AP automation projects. Among survey respondents from companies with less than $250 million in annual revenues, 75 percent said cutting the cost of processing is the No. 1 factor in justifying AP automation projects.
2013 AP Automation Study | 44 What is your No. 1 obstacle to getting AP automation projects approved? Too many other projects - 33.3% Senior executive attention and sponsorship - 19.6% Lack of capital - 15.2% Lack of internal IT resources - 13% Other - 8% Solutions are not compelling enough - 5.1% Lack of a business case - 4.3% Lack of automation/technology savvy among suppliers - 1.4% Supplier resistance - 0% 5.1% 4.3% 1.4% 33.3% 19.6% 15.2% 13% 8% Competing initiatives is the No. 1 obstacle to getting AP automation projects approved, cited by 33.3 percent of survey respondents. One-fifth of survey respondents identified senior manage- ment attention and sponsorship as the top obstacle to getting AP automation projects approved. A lack of capital, a lack of internal resources, and a lack of compelling solutions also were men- tioned by respondents as top obstacles to getting AP automation projects approved. Respondents aren’t as concerned about supplier resistance or a lack of technology savvy or automation among suppliers. A plurality of survey respondents from companies with more than $5 billion in annual revenues (25.8 percent) cited competing initiatives as the No. 1 obstacle to getting AP automation projects approved. Nearly one-third of survey respondents from companies with less than $250 million in annual revenues (30.4 percent) said competing initiatives are the No. 1 obstacle to getting AP automa- tion projects approved.
2013 AP Automation Study | 45 Which of the following executives are actively aware of AP automation efforts in your organization? (Select all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Controller 71% 80.0% 90.0% CEO 17.6% CFO 65.6% COO 11.5% CIO 20.6% Treasurer 31.3% Chief procurement officer 33.6% President 13% By far, controllers and CFOs are the executives most likely to be actively aware of AP automation projects within an organization. Seventy-one percent of respondents indicated that their control- ler is actively aware of AP automation efforts in their organization, while 65.6 percent stated that their chief financial officer is actively aware of their AP automation efforts. After these executives, chief procurement officers, treasurers, chief information officers, chief executive officers and presidents are the executives most likely to be actively aware of an organization’s AP automation efforts. Some 79.3 percent of survey respondents from companies with more than $5 billion in annual revenues said their controller is actively aware of AP automation efforts in their organization. Among survey respondents from companies with less than $250 million in annual revenues, 70.8 percent said their CFO is actively aware of AP automation efforts in their organization.
2013 AP Automation Study | 46 CONCLUSION AP continues its steady migration toward electronic business processes. This year’s AP Automation Study shows a reduction in the percentage of paper invoices pro- cessed by respondents, with e-invoicing growing by nearly 20 percentage points since last year’s study. The volume of electronic business-to-business payments also has increased since last year. In fact, ACH now represents a larger share of business-to-business payments than paper checks among survey respondents with the highest annual revenues. Within three years, most survey respondents expect the majority of their business-to-business payments to be completed electronically. More organizations also are integrating AP and T&E systems, and better aligning AP with AR and procurement, to drive further efficiencies and increase information reporting and tracking. Yet, financial operations professionals have a long way to go before achieving the paperless office. Their push toward electronic processes appears stymied by competing corporate initiatives, flat capital budgets, and automation projects receiving a tiny portion of overall AP budgets. Cloud computing and software-as-a-service, an obvious way to get around these capital and resource constraints, are raising too many security concerns to be an option for most AP professionals. Outsourcing also is not a consideration for the vast majority of survey respondents. So the industry is likely to continue the gradual but unrelenting move away from paper highlight- ed by this year’s results. To ensure there are no potholes along the way, AP professionals must continue to leverage a mix of automation tools and technologies (workflow, OCR, e-invoicing, discount management, etc.), and solutions providers must offer compelling business cases and innovative business models to help end-users overcome the internal challenges identified in this survey.
2013 AP Automation Study | 47 appendix Are you processing more B2B payments electronically today than you were three years ago?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Are you using a supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Does your organization use OCR technology to capture invoice data?. . . . . . . . . . . . . . . . . . 29 Do you believe that integrating your T&E and AP systems would provide significant benefits?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Do you perform any invoice prep work before processing? . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 For B2B payments, what methods do you use, and what portion of payments is made via each method?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Has there been an executive-driven effort to have your AP and AR departments work more closely together?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Has there been an executive-driven effort to have your AP and procurement organizations work more closely together?. . . . . . . . . . . . . . . . . . . . . . . . . . .9 Have you considered trade finance as a part of your AP strategy? . . . . . . . . . . . . . . . . . . . . . 14 How does your 2013 capital budget for AP automation projects compare with your budget for 2012? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 How has the average time it takes you to process an invoice changed over the past year?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 How has the volume of your paper invoices changed over the past year? . . . . . . . . . . . . . . . 20 How has your volume of total invoices changed over the past year?. . . . . . . . . . . . . . . . . . . . 17 How have your costs to process an invoice changed in the past 18 months?. . . . . . . . . . . . . 13 How have your invoice entry and payment error rates changed in the past 18 months? . . . . 13 How long do you expect it will be until the majority of your B2B payments will be completed electronically? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 How long on average does it take your department to process an invoice?. . . . . . . . . . . . . . 21 How many FTEs are you using for invoice entry and matching?. . . . . . . . . . . . . . . . . . . . . . . . 10 How many total invoices (paper and electronic) are you processing monthly?. . . . . . . . . . . . 16 How much of your overall AP budget is spent on automation projects each year?. . . . . . . . . 41 How satisfied are you with your supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 How would you describe your AP environment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 In 2013, how will the importance of early payment discount capture to your organization change? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Is PO automation an important component of an AP automation initiative?. . . . . . . . . . . . . . 19 Is your organization considering outsourcing its AP processing?. . . . . . . . . . . . . . . . . . . . . . . 15 Is your organization considering using cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Is your T&E expense management system integrated with your AP solution?. . . . . . . . . . . . . 36 What AP processing functions is your organization outsourcing or considering outsourcing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 What are the most important drivers to automating the management of POs and invoices? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2013 AP Automation Study | 48 What are the primary reasons your organization does not use OCR technology?. . . . . . . . . . 29 What are your company’s annual revenues? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 What are your operational priorities for AP automation in 2013?. . . . . . . . . . . . . . . . . . . . . . . 42 What do you see as potential disadvantages of cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 What do you see as the biggest benefit of cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 What ERP system are you currently using?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 What invoice types are you processing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 What is the increase in B2B payments today compared with three years ago?. . . . . . . . . . . . 25 What is the percentage breakdown of your invoices among the following. . . . . . . . . . . . . . . . 18 What is your average cost to process electronic invoices?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 What is your average cost to process invoices (both paper and electronic)? . . . . . . . . . . . . . 11 What is your average cost to process paper invoices?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 What is your No. 1 obstacle to getting AP automation projects approved?. . . . . . . . . . . . . . . 44 What percentage of early payment discounts do you typically capture?. . . . . . . . . . . . . . . . . 22 What percentage of your total invoice volume is paper-based?. . . . . . . . . . . . . . . . . . . . . . . . 17 What types of capture technology are you using?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Where is it housed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Which of the following AP functions are supported through your supplier portal?. . . . . . . . . 35 Which of the following describes your job function?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Which of the following do you use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Which of the following executives are actively aware of AP automation efforts in your organization? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Which of the following factors are the most important in justifying the cost of AP automation projects?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Which of the following would be the most important driver of your decision to implement a supplier portal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Who owns the management of the supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 With regard to electronic payments, which of the following applies to your organization?. . . 26
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2013 AP Automation Study

  • 1.
    2013 AP AutomationStudy Sponsored by:Published by:
  • 2.
    Published July 2013Copyright © 2013 by The Institute of Financial Operations All rights reserved. Reproduction or transmission of this publication in any form without the ex- press permission of the copyright holder is prohibited and is a violation of federal copyright law. The information contained herein has been diligently obtained from sources believed to be reliable and has been prepared with care. The Institute and the authors disclaim any and all warranties as to the accuracy and completeness of this information. The Institute and the authors, their directors, employees, or assistants can accept no liability for any damages or loss occasioned to any person, company, or entity due to errors or omissions in the information contained herein or in the interpretation thereof. The opinions expressed herein were developed from a global survey of users and the analyses may contain the opinions of the author and may change at any time without notice. This publication is designed to provide authoritative information at the time of publication in regard to the subject matter covered. It is not intended to offer accounting, legal, or other professional advice. If accounting, legal, or other professional advice is required, or if expert assistance is needed, the services of a competent professional person should be sought. This document or any part thereof may not be reproduced in any form without the express written permission of the publisher.
  • 3.
    2013 AP AutomationStudy | 3 About The Institute of Financial Operations REVISED 9/12 The Institute of Financial Operations is a membership-based professional association serving the entire financial operations ecosystem, with a particular focus on the accounts payable and accounts receivable disciplines and the related fields of information management and data cap- ture. The Institute grew out of the merger of four associations: International Accounts Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the National Asso- ciation of Purchasing and Payables (NAPP), and The Association for Work Process Improvement (TAWPI). Based in Orlando, Fla., with affiliates in the U.S., Canada, and the UK, The Institute serves as a global voice, chief advocate, recognized authority, acknowledged leader, and principal educator for people in financial operations. The Institute has a community of nearly 70,000, which includes 9,000 members and customers, and an additional 61,000 financial operations professionals. The Institute’s members have access to benefits and leading-edge resources such as the award- winning Financial Ops magazine, a dynamic content-rich website, educational and networking events, online educational offerings, certification and certificate programs, career resources, and volunteer opportunities. The Institute of Financial Operations Project Team Jo E. LaBorde, Executive Director Laureen Crowley, Vice President of Communications and Editor in Chief Diane Sears, Director of Communications and Managing Editor Joe Stern, Director of Brand Management and Creative Design Mark Brousseau, Analyst About the sponsors Built on the premise that all payments are critical, Anybill was created in 2001 to transition any AP transaction to an automated solution. Anybill combines proprietary technology with un- matched customer service to deliver a complete software-as-a-service solution. Clients retain efficient workflows while gaining greater visibility and control, better cash flow management, streamlined approval processes, 24/7 accessibility, and increased auditor confidence. Anybill works with clients ranging from nonprofit associations to some of the largest multinationals. Anybill is headquartered in Washington, D.C., and is SSAE 16 SOC compliant. This report was sponsored in part by Anybill. Other sponsors include Image Integration Systems Inc. (DocuSphere), Iron Mountain Inc., Kofax, and ReadSoft.
  • 4.
    2013 AP AutomationStudy | 4 Table of Contents EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Survey methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SURVEY RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 About the respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Processing invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Processing B2B payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Technology use and satisfaction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Technology spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Survey questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
  • 5.
    2013 AP AutomationStudy | 5 Executive Summary For years, accounts payable automation has been a yet-to-be fulfilled promise. The industry has been saddled with high volumes of paper invoices and paper-based payments, particularly among smaller organizations. All of this paper has meant high costs, inefficient pro- cesses, many errors, slow processing turnaround, and a lack of visibility into key financial data. Additionally, the slow processing of paper invoices makes it difficult for companies to capture lucrative supplier discounts. Tools and technologies exist that can help eliminate this paper and drive better business out- comes across the financial supply chain: electronic invoicing, supplier portals, document scan- ning and data extraction, automated workflow solutions, electronic payments, dynamic discount capture, and more. Yet adoption has remained slow. Through the years, organizations have cited supplier resistance, limited internal resources, and tight capital budgets as reasons for holding off on AP automation. This annual study is designed to uncover key trends in AP automation. Has there been a seismic change since we conducted the study last year? No. But the results show that the field of finan- cial operations is making steady but gradual progress toward eliminating paper from invoice and payments processes. For example, the adoption of electronic invoicing and payments has increased since last year. Most respondents predict that the majority of their payments will be electronic within three years. Among key findings of the study: • Invoice approval workflow tops the list of respondents’ AP automation priorities for 2013. • Cutting the cost of processing AP transactions is the No. 1 factor in justify- ing automation. • Competing initiatives is the No. 1 obstacle to getting AP automation projects approved. • Centralized AP environments remain the most popular option among survey respondents. • There does not appear to be a widespread push to align AP and AR processes. • A plurality of respondents said it costs their organization $2 to $5 to process an invoice (paper or electronic), and their average cost to process an electronic invoice is less than $2. • The cost of invoice processing has stayed the same or been reduced for most organizations. • Invoice entry and payment error rates have stayed the same or been reduced for most organizations during the past 18 months. • Just 15.3 percent of respondents have considered trade finance as a part of their AP strategy. • Outsourcing is not yet prevalent when it comes to AP processing. • Despite pushes for digital billing, paper remains a staple in invoicing. • Nearly half of those who responded, 42.9 percent, said that their volume of total invoices has increased slightly (up to 10 percent) during the past year. • Purchase order-based invoices continue to be prevalent, representing the majority (52.8 percent) of invoices handled by those who responded to the survey. • Overall, the volume of paper invoices is trending downward.
  • 6.
    2013 AP AutomationStudy | 6 • More than two-thirds of organizations process invoices in less than five days on average. • Many organizations are missing out on early payment discounts. • The majority of those who responded to the survey (54.7 percent) said there’s been no change in the importance of early payment discount capture to their organization. • Checks are still the most popular method of payment for business-to- business transactions, but this year’s survey illustrates the steady decline of paper-based payments. • Among survey respondents who are processing more business-to-business payments electronically, 49.2 percent reported a moderate increase, saying electronic business-to-business payments were up by 24 percent or less. • The use of P-card rebates as a source of revenue is being embraced by organizations. • Front-end imaging continues to be the most commonly used capture tech- nology in AP. • Some 76.7 percent of those who responded to the survey indicated that they do not use optical character recognition. • Nearly three-fourths of those who responded (73.9 percent) said they com- plete some type of prep work before processing an invoice. • SAP, PeopleSoft, and Oracle ranked highest when it came to enterprise resource planning (ERP) systems used by survey respondents. • Just 28 percent of those who responded said their organizations are using a supplier portal. • Invoice status is the most likely function to be supported through a supplier portal. • The majority of respondents who have a supplier portal are satisfied with the technology. • Respondents have mixed opinions on the value of integrating their travel and entertainment expense reporting and AP systems. • Nearly half of the survey respondents (47.5 percent) indicated that their or- ganization is not considering using cloud services or software-as-a-service for AP processing. • Capital spending for AP automation projects will be a bit higher in 2013. • For most organizations, just a fraction of their overall AP budget is dedicated to automation projects each year. Based on the findings of the study, it is clear that organizations have room to improve when it comes to AP automation. But the tide is clearly turning against paper-based AP business pro- cesses. Survey methodology In cooperation with its sponsors, Anybill, Image Integration Systems Inc. (DocuSphere), Iron Mountain, Kofax, and ReadSoft, The Institute of Financial Operations conducted qualitative and quantitative research among AP professionals into AP automation trends. The online survey was presented to several thousand AP professionals in early 2013. The survey was approximately 50 questions, including some that could be answered instantly with a single mouse click and others that were more complex and likely required the survey respondent to retrieve some information. Respondents were given three months to complete the survey. A total of 213 respondents completed the online survey, and 156 of the respondents answered every question (a 73 percent completion rate).
  • 7.
    2013 AP AutomationStudy | 7 SURVEY RESULTS About the respondents Which of the following describes your job function? CFO - 0.5% CTO - 0% CEO - 0.9% COO - 0.5% Controller - 3.8% Treasurer - 0.5% Cash manager - 1.4% Finance executive - 1.9% Auditor - 0.5% AP manager - 37.4% AP supervisor - 15.6% AP director - 8.5% Operations manager - 3.3% Shared services manager - 2.4% Shared services supervisor - 0.5% Shared services director - 1.9% Other - 20.4% 0.5% 1.9% 0.5% 2.4% 3.3% 0.5% 0.5% 0.5% 1.4% 1.9% 3.8% 0.9% 20.4% 8.5% 15.6% 37.4% More than one-third of the survey respondents (37.4 percent) indicated that their job func- tion is AP manager. Some 15.6 percent of survey respondents are AP supervisors. Other titles represented by survey respondents include AP director, operations manager, controller, shared services manager, shared services director, finance executive, cash manager, CFO, and auditor. What are your company’s annual revenues? Less than $250 million - 18.9% $250 million to $500 million - 15.3% $500 million to $750 million - 5.8% $750 million to $1 billion - 9.5% $1 billion to $5 billion - 29.5% More than $5 billion - 21.1% 18.9% 15.3% 5.8% 9.5% 29.5% 21.1% A plurality of survey respondents (29.5 percent) indicated that their company has between $1 bil- lion and $5 billion in annual revenues. Some 21.1 percent of survey respondents stated that their company has more than $5 billion in annual revenues, while 18.9 percent of survey respondents indicated that their company has less than $250 million in annual revenues, and 15.3 percent stated that their company has between $250 million and $500 million in annual revenues. About one in 10 survey respondents (9.5 percent) indicated that their company has between $750 million and $1 billion in annual revenues, while the remaining 5.8 percent of survey respon- dents stated that their company has between $500 million and $750 million annually.
  • 8.
    2013 AP AutomationStudy | 8 How would you describe your AP environment? Centralized - 61.4% Partially centralized - 15.9% Decentralized - 7.7% Shared service center - 15% 61.4% 15% 7.7% 15.9% Centralized AP environments remain the most popular option among survey respondents this year, with about six in 10 (61.4 percent) describing their organization’s AP environment that way. Additionally, 15 percent of survey respondents described their organization’s AP environment as a shared services center (a trend to watch in the future), while 15.9 percent of survey respon- dents stated that their organization’s AP environment is partially centralized. Only 7.7 percent of the survey respondents indicated that their organization’s AP environment is decentralized. Among survey respondents from companies with more than $5 billion in annual revenues, 47.5 percent said their AP environment is centralized, while 40 percent stated that their AP environ- ment operates in a shared services center. More than three-quarters of respondents from companies with less than $250 million in annual revenues (79.4 percent) described their AP environment as centralized. Has there been an executive-driven effort to have your AP and AR departments work more closely together? Yes - 18.5% No - 51.7% We are already tightly aligned. - 29.8% 29.8% 51.7% 18.5% There does not appear to be a widespread push among organizations to align AP and AR pro- cesses. Fewer than one-third of survey respondents (29.8 percent) reported that their organiza- tion’s AP and AR departments are operating in a “tightly aligned” fashion. Of the organizations whose AP and AR departments are not tightly aligned, just 18.5 percent stated that the executives at the top of their organization are driving an effort to get the two enti- ties to work more closely together.
  • 9.
    2013 AP AutomationStudy | 9 More than one-third of survey respondents from companies with more than $5 billion in annual revenues (35.9 percent) said their AP and AR departments already are tightly aligned. A plurality of survey respondents from companies with less than $250 million in annual revenues (45.5 percent) said their AP and AR departments already are tightly aligned. Has there been an executive-driven effort to have your AP and procurement organizations work more closely together? Yes - 39.4% No - 31.3% We are already tightly aligned. - 29.3% 29.3% 31.3% 39.4% AP and procurement have a history of segregation in many organizations — even gaining the reputation of being silos. Interestingly, the survey findings suggest that there is an effort to inte- grate the two corporate powerhouses. More than one-third of survey respondents (39.4 percent) indicated that their organization has an executive-driven effort to more closely align AP and procurement, in addition to the nearly one- third of survey respondents (29.3 percent) who reported that the two departments already are tightly aligned in their organization. Fewer than one-third of survey respondents (31.3 percent) reported no effort by executives to bring AP and procurement more closely together. Nearly half of the survey respondents from companies with more than $5 billion in annual rev- enues (47.5 percent) said their company has an executive-driven effort to have AP and procure- ment work more closely together. Thirty percent of respondents from this group said the two departments already are tightly aligned in their organization. Some 44.1 percent of survey respondents from companies with less than $250 million in annual revenues said their company has an executive-driven effort to have AP and procurement work more closely together.
  • 10.
    2013 AP AutomationStudy | 10 How many FTEs are you using for invoice entry and matching? Fewer than 5 - 37.6% 5 to 10 - 30.7% 11 to 15 - 11.9% 16 to 25 - 8.9% More than 25 - 10.9%37.6% 30.7% 8.9% 10.9% 11.9% Invoice entry and matching is a process that is still eating up the hours of full-time employees in many AP departments, with the number of survey respondents using more than 16 FTEs for the task growing slightly from a year ago. Fortunately, the majority of organizations can get by with 10 or fewer employees dedicated to the task. Some 37.6 percent of survey respondents reported that they use fewer than five FTEs for invoice entry and matching, compared with 42.8 percent a year ago. About one-third of survey respon- dents (30.7 percent) stated that they use five to 10 FTEs for invoice entry and matching, com- pared with 34.3 percent a year ago. Some 11.9 percent of survey respondents indicated that their organization uses 11 to 15 FTEs for invoice entry and matching (compared with 12.7 percent a year ago), while 8.9 percent stated that they use 16 to 25 FTEs for invoice entry and matching (compared with 3.6 percent a year ago) and 10.9 percent indicated that they use more than 25 FTEs for the task (compared with 6.6 percent a year ago). More than one-quarter of survey respondents from companies with more than $5 billion in an- nual revenues (27.5 percent) indicated that they use more than 25 FTEs for invoice entry and matching, while an equal percentage, 27.5 percent, said they use five to 10 FTEs for the task. More than two-thirds of survey respondents from companies with less than $250 million in an- nual revenues (69.7 percent) said they use fewer than 5 FTEs for invoice entry and matching.
  • 11.
    2013 AP AutomationStudy | 11 What is your average cost to process invoices (both paper and electronic)? Less than $2 per invoice - 16.3% $2 to $5 per invoice - 27.9% $6 to $10 per invoice - 11.1% $11 to $15 per invoice - 4.8% $16 to $25 per invoice - 5.3% More than $25 per invoice - 1.9% Not sure - 32.7% 32.7% 11.1% 1.9% 16.3% 5.3% 27.9% 4.8% A plurality of survey respondents (27.9 percent) indicated that it costs their organization $2 to $5 to process an invoice (paper or electronic). Some 16.3 percent of survey respondents stated that it costs their organization less than $2 to process an invoice, while 11.1 percent pegged the cost at $6 to $10 per invoice. Twelve percent of survey respondents indicated that it costs their organization more than $10 to process a paper or electronic invoice, with 4.8 percent of survey respondents pegging their cost between $11 to $15 per invoice, 5.3 percent stating that it costs their organization $15 to $25 per invoice, and 1.9 percent indicating that their cost per invoice is more than $25. Surprisingly, nearly one-third of survey respondents (32.7 percent) indicated that they don’t know their cost to process a paper or electronic invoice. A plurality of respondents from companies with more than $5 billion in annual revenues said that it costs their organization $2 to $5 to process an invoice (paper or electronic). On the other end of the spectrum, a plurality of survey respondents from companies with less than $250 million in annual revenues (34.3 percent) said that it costs their organization less than $2 to process an invoice. What is your average cost to process paper invoices? Less than $2 per invoice - 12.2% $2 to $5 per invoice - 22.9% $6 to $10 per invoice - 14.6% $11 to $15 per invoice - 5.4% $16 to $25 per invoice - 7.3% More than $25 per invoice - 1% Not sure - 36.6% 36.6% 14.6% 1% 12.2% 7.3% 22.9% 5.4% The average cost to process paper invoices varied greatly among survey respondents, ranging from less than $2 per invoice to more than $25 per invoice. The greatest share of survey respondents — 22.9 percent — fell in the $2 to $5 range. The second most common cost bracket was between $6 and $10 per paper invoice, which was cited by 14.6 percent of survey respondents. Some 12.2 percent of survey respondents indicated that their average cost to process a paper invoice is less than $2.
  • 12.
    2013 AP AutomationStudy | 12 Still, with 13.7 percent of survey respondents reporting average paper invoice processing costs of more than $10 per invoice, there is clearly room for improvement. Some 5.4 percent of survey respondents indicated that their average cost to process a paper invoice is $11 to $15, while 7.3 percent of respondents stated that their average cost to process a paper invoice is $15 to $25, and 1 percent of respondents pegged their average cost at more than $25 per invoice. Of those who responded to the question, more than one-third (36.6 percent) said that they were unsure of their average cost to process paper invoices. A plurality of survey respondents from companies with more than $5 billion in annual revenues (30 percent) indicated that it costs them $2 to $5 to process a paper invoice. Some 22.5 percent of survey respondents from this group said it costs their organization less than $2 to process a paper invoice. A plurality of survey respondents from companies with less than $250 million in annual revenues (27.3 percent) said they didn’t know their average cost to process a paper invoice. What is your average cost to process electronic invoices? 0.5% 0.5% 3.9% Less than $2 per invoice - 31.1% $2 to $5 per invoice - 15.5% $6 to $10 per invoice - 6.3% $11 to $15 per invoice - 3.9% $16 to $25 per invoice - 0.5% More than $25 per invoice - 0.5% Not sure - 42.2% 42.2% 15.5% 31.1% 6.3% A plurality of survey respondents (31.1 percent) indicated that their average cost to process an electronic invoice is less than $2. The second most common cost bracket is between $2 and $5 per electronic invoice, which was cited by 15.5 percent of survey respondents. Some 6.3 per- cent of survey respondents indicated that their average cost to process an electronic invoice is $6 to $10, while 3.9 percent of respondents pegged their average cost per electronic invoice at $11 to $15. Just 0.5 percent of survey respondents indicated that their average cost to process an electronic invoice is between $15 and $25, while another 0.5 percent of respondents stated that their aver- age cost to process an electronic invoice is more than $25. Of those who responded to the question, 42.2 percent said that they were unsure of their aver- age cost to process electronic invoices. The majority of survey respondents from companies with more than $5 billion in annual revenues (57.5 percent) said their average cost to process an electronic invoice is less than $2. Among survey respondents from companies with less than $250 million in annual revenues, 32.4 percent said their average cost to process an electronic invoice is less than $2, while an equal percentage, 32.4 percent, said they didn’t know their average cost to process an electronic invoice.
  • 13.
    2013 AP AutomationStudy | 13 How have your costs to process an invoice changed in the past 18 months? 1.5% Increased significantly (more than 10 percent) - 1.5% Increased slightly (up to 10 percent) - 12.9% Have not changed - 45.8% Decreased slightly (up to 10 percent) - 31.8% Decreased significantly (more than 10 percent) - 8% 8% 45.8% 12.9% 31.8% The cost of invoice processing has stayed the same or decreased for most organizations during the past 18 months. Only 14.4 percent of survey respondents indicated that their cost to pro- cess an invoice increased slightly (12.9 percent) or significantly (1.5 percent) during the past 18 months. Nearly half of the survey respondents (45.8 percent) indicated that their cost of invoice pro- cessing has not changed during the past 18 months, while 31.8 percent of survey respondents stated that their cost of invoice processing has decreased slightly (by less than 10 percent) and 8 percent indicated that their cost of invoice processing decreased significantly (by more than 10 percent). The majority of survey respondents from companies with more than $5 billion in annual rev- enues (53.8 percent) said their costs to process an invoice have decreased slightly in the past 18 months. Nearly three-quarters of survey respondents from companies with less than $250 million in an- nual revenues (71.9 percent) said their costs to process an invoice have not changed in the past 18 months. How have your invoice entry and payment error rates changed in the past 18 months? 0.5% Increased significantly (more than 10 percent) - 0.5% Increased slightly (up to 10 percent) - 15.2% Have not changed - 53.4% Decreased slightly (up to 10 percent) - 24.5% Decreased significantly (more than 10 percent) - 6.4% 6.4% 53.4% 15.2% 24.5% Invoice entry and payment error rates have stayed the same or decreased for most organizations during the past 18 months. Only 15.7 percent of survey respondents indicated that their invoice entry and payment error rates have increased slightly (15.2 percent) or significantly (0.5 percent) during the past 18 months.
  • 14.
    2013 AP AutomationStudy | 14 The majority of survey respondents (53.4 percent) indicated that their invoice entry and pay- ment error rates have not changed during the past 18 months, while 24.5 percent of survey respondents stated that their invoice entry and payment error rates have decreased slightly (by less than 10 percent) and 6.4 percent indicated that their invoice entry and payment error rates decreased significantly (by more than 10 percent). These results are on par with last year, when 12.5 percent of survey respondents indicated high- er invoice entry and payment error rates, while 36.7 indicated lower invoice entry and payment error rates and 50.9 percent said their invoice entry and payment error rates had not changed. Fifty-five percent of respondents from companies with more than $5 billion in annual revenues said their invoice entry and payment error rates have not changed during the past 18 months. More than two-thirds of respondents from companies with less than $250 million in annual rev- enues (69.7 percent) said their invoice entry and payment error rates have not changed during the past 18 months. Have you considered trade finance as a part of your AP strategy? 4.4% Yes, planning to deploy within 6 months - 4.4% Yes, planning to deploy within 12 months - 1% Yes, planning to deploy within 24 months - 0.5% Yes, but we have no plans to deploy trade finance - 9.4% No, we have not considered trade finance - 84.7% 84.7% 0.5% 1% 9.4% Trade finance as a tool in AP strategy appears not to have caught on fully among survey respon- dents. Just 15.3 percent of survey respondents indicated that they have considered trade finance as a part of their AP strategy. The remainder (84.7 percent) said they had not. Additionally, 9.4 per- cent of survey respondents stated that they have considered trade finance, but have no plans to deploy it. Two-thirds (66.7 percent) of survey respondents from companies with more than $5 billion in an- nual revenues indicated that they have not considered trade finance as part of their AP strategy. Not surprisingly, hardly any companies with less than $250 million in annual revenues, just 12.1 percent, have considered trade finance as part of their AP strategy.
  • 15.
    2013 AP AutomationStudy | 15 Is your organization considering outsourcing its AP processing? We already outsource our AP processing - 5.3% Yes, within six months - 1% Yes, within 12 months - 0% Yes, within 24 months - 0.5% Yes, timing is unclear - 2.9% No - 81.1% Not sure - 9.2% 5.3% 1% 2.9% 0.5% 81.1% 9.2% Despite broader trends toward outsourcing across corporate America, such a practice is not yet prevalent when it comes to AP processing. The vast majority of survey respondents, 81.1 percent, indicated that their organization is not considering outsourcing its AP processing. Some 5.3 percent of survey respondents stated that their organization already outsources its AP pro- cessing, while 1 percent of respondents indicated that their organization is considering outsourc- ing its AP processing within six months and 0.5 percent stated that their organization is consid- ering outsourcing its AP processing within 24 months. Some 2.9 percent of survey respondents said their organization is considering outsourcing AP processing, but the timing of the project is not clear. A whopping 82.5 percent of survey respondents from companies with more than $5 billion in an- nual revenues indicated that their organization is not considering outsourcing its AP processing. Among survey respondents from companies with less than $250 million in annual revenues, 78.8 percent said their organization is not considering outsourcing its AP processing. What AP processing functions is your organization outsourcing or considering outsourc- ing? Already outsource Considering outsourcing No plans to outsource 0 5 10 15 20 25 30 35 40 Document receipt/sorting Document imaging Document archiving Datacapture/ dataentry Payment processing POand/or goodsreceipt matching 13 13 11 11 19 6 11 19 7 11 13 13 11 15 10 14 14 7 When respondents whose organizations are receptive to outsourcing were asked what they are most likely to send out-of-house, certain tasks bubbled to the surface.
  • 16.
    2013 AP AutomationStudy | 16 A 35.1 percent plurality of the survey respondents who are receptive to outsourcing indicated that they are considering outsourcing document imaging. Some 29.7 percent of survey respon- dents stated that they are considering outsourcing document receipt and sorting, while 27.8 per- cent indicated that they are considering outsourcing document archival, and 20 percent stated that they are considering outsourcing data capture and data entry. Forty percent of survey respondents indicated that they already outsource data capture and data entry. Some 35.1 percent of survey respondents stated that they outsource document receipt and sorting, while 30.6 percent outsource document archiving and 30.6 percent outsource pay- ment processing. Among respondents from companies with more than $5 billion in annual revenues, data capture/ data entry was the top function that organizations are considering outsourcing. Processing Invoices How many total invoices (paper and electronic) are you processing monthly? 14.9% Fewer than 5,000 - 28.2% 5,001 to 10,000 - 19.9% 10,001 to 25,000 - 14.9% 25,001 to 40,000 - 12.2% More than 40,000 - 24.9% 24.9% 19.9% 28.2% 12.2% This year’s survey respondent pool represented a slightly larger share of organizations that are processing high volumes of invoices and a simultaneous decrease in the share of organizations that identify with the lowest level of invoice processing. About one-quarter of survey respondents (24.9 percent) indicated that their organization pro- cesses more than 40,000 total invoices per month (paper and electronic), compared with 15.8 percent a year ago. At the other end of the volume spectrum, 28.2 percent of survey respon- dents stated that their organization processes fewer than 5,000 invoices per month, compared with 37.6 percent a year ago. Some 19.9 percent of survey respondents indicated that their organization processes 5,000 to 10,000 total invoices per month (paper and electronic), while 14.9 percent of survey respondents stated that their organization processes 10,001 to 25,000 total invoices per month, and 12.2 percent of survey respondents indicated that their organization processes 25,001 to 40,000 total invoices per month. Sixty-five percent of survey respondents from companies with more than $5 billion in annual revenues said their organization processes more than 40,000 total invoices per month. A plurality of survey respondents from companies with less than $250 million in annual revenues indicated that their organization processes less than 5,000 total invoices per month.
  • 17.
    2013 AP AutomationStudy | 17 What percentage of your total invoice volume is paper-based? More than 90 percent - 27.9% 75 percent - 18.4% 50 percent - 24.6% 25 percent - 13.4% 10 percent - 6.1% Less than 10 percent - 9.5% 9.5% 18.4% 6.1% 13.4% 27.9% 24.6% Survey results showed that despite pushes for digital billing, paper remains a staple in invoicing. A total of 70.9 percent of those who responded said that at least half of the invoices they handle are paper. A plurality of survey respondents, 27.9 percent, indicated that more than 90 percent of the invoices they handle are paper. Nearly one-quarter of survey respondents, 24.6 percent, stated that half of the invoices they handle are paper, while 18.4 percent indicated that 75 percent of their invoices they process are paper. Conversely, 13.4 percent of those who responded said that 25 percent of the invoices they handle are paper, while 6.1 percent said 10 percent of the invoices they handle are paper. Nearly one in 10 survey respondents, 9.5 percent, indicated that less than 10 percent of the invoices they handle are paper. A plurality of survey respondents from companies with more than $5 billion in annual revenues (32.5 percent) stated that 25 percent of the invoices they handle are paper. Conversely, 50 per- cent of the respondents from companies with less than $250 million in annual revenues indicated that more than 90 percent of the invoices they handle are paper — a tremendous opportunity for automation. How has your volume of total invoices changed over the past year? Increased significantly (more than 10 percent) - 14.3% Increased slightly (up to 10 percent) - 42.9% Unchanged - 21.4% Decreased slightly (up to 10 percent) - 18.7% Decreased significantly (more than 10 percent) - 2.7% 2.7% 42.9% 18.7% 14.3% 21.4% Nearly half of those who responded, 42.9 percent, said that their volume of total invoices has increased slightly (up to 10 percent) during the past year. Additionally, 14.3 percent of survey respondents stated that their volume of total invoices has increased significantly (more than 10 percent) during the past year.
  • 18.
    2013 AP AutomationStudy | 18 About one in five respondents, 21.4 percent, indicated that their volume of total invoices has not changed during the past year. Some 18.7 percent of those who responded stated that their volume of total invoices has de- creased slightly (up to 10 percent) during the past year, while 2.7 percent of respondents indi- cated that their volume of total invoices has decreased significantly (more than 10 percent). A plurality of survey respondents from companies with more than $5 billion in annual revenues (42.5 percent) said their volume of total invoices has increased slightly during the past year. Simi- larly, nearly half of the survey respondents from companies with less than $250 million in annual revenues (43.3 percent) said their volume of total invoices has increased slightly during the past year. What is the percentage breakdown of your invoices among the following: .00 10.00 20.00 30.00 40.00 50.00 60.00 PO-based vendor invoices Non-PO-based vendor invoices Check requests for vendor Employee expense claims 9.14 12.15 52.83 35.08 Purchase order-based invoices continue to be prevalent, representing the majority (52.8 percent) of invoices handled by those who responded to the survey. Non-purchase order-based invoices were the second most common invoice type, representing 35 percent of invoices handled by respondents. Check requests for vendors represent 12.1 percent of the invoices handled by survey respon- dents, while employee expense claims represent 9.1 percent of invoices. PO-based vendor invoices represent 58.9 percent of the invoices handled by companies with more than $5 billion in annual revenues. Among companies with less than $250 million in annual revenues, PO-based vendor invoices represent 43.4 percent of their invoices.
  • 19.
    2013 AP AutomationStudy | 19 Is PO automation an important component of an AP automation initiative? Yes - 72.6% No - 27.4% 72.6% 27.4% A successful AP automation initiative should incorporate purchase order automation, according to survey respondents. Roughly seven of 10 (72.6 percent) said that PO automation is an impor- tant component of an AP automation initiative, while almost three in 10 (27.4 percent) said it is not. A whopping 87.5 percent of survey respondents from companies with more than $5 billion in annual revenues said PO automation is an important component of an AP automation initiative. Seventy percent of survey respondents from companies with less than $250 million in annual revenues said PO automation is an important component of an AP automation initiative. What are the most important drivers to automating the management of POs and invoices? 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Achieving better control over spend and ensuring purchases are with preferred suppliers Eliminating mismatches and exceptions that lead to blocked invoices Simplifying invoice submission process from suppliers (through a PO-flip process) Other (please specify) 9% 36.1% 54.9% 48.1% In an era of attention to the bottom line, the top reason cited for automating POs and invoice management was, not surprisingly, related to finances. A total of 54.9 percent of organizations said a desire to achieve better control over spending and to ensure purchases are made with preferred suppliers is a key driver of automation. Accuracy also ranked high. A significant number (48.1 percent) said eliminating mismatches and exceptions that lead to blocked invoices is the most important driver of automation. Some 36.1 percent of survey respondents said making the supplier invoice submission process easier is a key motivator.
  • 20.
    2013 AP AutomationStudy | 20 These results were in line with the findings of our study from a year ago. Survey respondents commented that other drivers to automating the management of POs and invoices included improving efficiency, accelerating payment turnaround, eliminating manual processes, and streamlining workflows. The majority of survey respondents from companies with more than $5 billion in annual revenues (51.4 percent) said eliminating mismatches and exceptions that lead to blocked invoices was the most important driver of automation. How has the volume of your paper invoices changed over the past year? 6.1% Significantly higher (more than 10 percent) - 6.1% Slightly higher (up to 10 percent) - 23.9% Unchanged - 21.7% Slightly lower (up to 10 percent) - 33.9% Significantly lower (more than 10 percent) - 14.4% 14.4% 21.7% 23.9% 33.9% Overall, the volume of paper invoices is trending downward. More survey participants (48.3 percent) said their volume of paper invoices is slightly lower or significantly lower than said it is higher. Nearly a quarter of respondents (23.9 percent) reported no change in their volume of paper invoices. Still, the survey indicates that many organizations have a lot of work to do in eliminating inefficient paper invoices: Nearly a third of respondents (30 percent) said their paper stacks, so to speak, are growing, indicating a need for more widespread deployment of automation processes. A plurality of survey respondents from companies with more than $5 billion in annual revenues (38.5 percent) said their volume of paper invoices has decreased slightly during the past year. Conversely, about one-third of survey respondents from companies with less than $250 million in annual revenues indicated that their volume of paper invoices has increased slightly during the past year.
  • 21.
    2013 AP AutomationStudy | 21 How long on average does it take your department to process an invoice? Less than 3 days - 33.3% 3 to 5 days - 36.1% 6 to 10 days - 18.3% 11 to 15 days - 7.8% 16 to 25 days - 2.2% More than 25 days - 2.2% 2.2% 2.2% 36.1% 7.8% 33.3% 18.3% Respondents to this year’s survey report fast turnaround on their invoice processing. More than two-thirds of respondents said their organization processes invoices in less than five days on average. More than one-third of survey respondents (36.1 percent) said they process invoices in three to five days, while 33.3 percent of respondents indicated that they process invoices in less than three days. Some 18.3 percent of survey respondents said they process invoices in six to 10 days, while 7.8 percent said they process invoices in 11 to 15 days. Only a handful of respondents said it takes their organization 16 or more days to process an invoice. Some 35.9 percent of survey respondents from companies with more than $5 billion in annual revenues said their organization processes invoices in less than three days, while another 35.9 percent of survey respondents from this group said it takes their organization three to five days to process invoices. Forty percent of survey respondents from companies with less than $250 million in annual rev- enues indicated that it takes their organization less than three days to process an invoice. How has the average time it takes you to process an invoice changed over the past year? 3.9% 2.8% Significantly more days (more than 3 days) - 2.8% Slightly more days (up to 3 days) - 8.9% Unchanged - 59.8% Slightly fewer days (up to 3 days) - 24.6% Significantly fewer days (more than 3 days) - 3.9% 24.6% 59.8% 8.9% More than 28 percent of those who responded reported improvements in processing times, saying it took them slightly fewer days (24.6 percent) or significantly fewer days (3.9 percent) to process invoices.
  • 22.
    2013 AP AutomationStudy | 22 The majority of respondents (59.8 percent) reported no change in the time it takes them to pro- cess an invoice. A minority of respondents — fewer than 12 percent — said their organizations were slightly slower (8.9 percent) or significantly slower (2.8 percent) compared with a year ago. The majority of respondents from companies with more than $5 billion in annual revenues (56.4 percent) said the time it takes their organization to process invoices has not changed in the past year. Among survey respondents from companies with less than $250 million in annual revenues, nearly two-thirds (63.3 percent) reported no change in the time it takes them to process an invoice. What percentage of early payment discounts do you typically capture? Less than 10 percent - 42.5% 10 percent to 24 percent - 9.5% 25 percent to 49 percent - 4.5% 50 percent to 74 percent - 10.1% 75 percent to 99 percent - 25.7% 100 percent - 7.8% 7.8% 9.5% 25.7% 10.1% 42.5% 4.5% The survey shows that many organizations are missing out on early payment discounts that could help the bottom line. The exception is companies with more than $5 billion in annual revenues: 43.6 percent of respondents in this group capture 75 percent to 99 percent of early payment discounts. A plurality of those who responded to the survey (42.5 percent) said they capture less than 10 percent of early payment discounts. On the other end of the spectrum, 7.8 percent of those who responded to the survey said they capture all early payment discounts, while 25.7 percent said they capture 75 percent to 99 per- cent of early payment discounts. Additionally, 10.1 percent of survey respondents indicated that they capture between 50 percent and 74 percent of early payment discounts, while 4.5 percent of survey respondents stated that they capture between 25 percent and 49 percent of early payment discounts, and 9.5 percent of respondents indicated that they capture between 10 percent and 24 percent of early payment discounts. A plurality of survey respondents from companies with less than $250 million in annual revenues (37.9 percent) said their organization captures less than 10 percent of early payment discounts.
  • 23.
    2013 AP AutomationStudy | 23 In 2013, how will the importance of early payment discount capture to your organization change? Significantly more important - 12.7% Slightly more important - 29.3% No change - 54.7% Slightly less important - 2.2% Significantly less important - 1.1% 54.7% 12.7% 29.3% 2.2% 1.1% The majority of those who responded to the survey (54.7 percent) said there’s been no change in the importance of early payment discount capture to their organization. Nearly one-third of survey respondents (29.3 percent) stated that early payment discount cap- ture is slightly more important to their organization in 2013, while 12.7 percent of survey re- spondents indicated that early payment discount capture is significantly more important to their organization. Only a handful of those who responded to the survey said early payment discount capture is less important to their organization. Some 2.2 percent of respondents said early payment discount capture is slightly less important to their organization in 2013, while 1.1 percent of respondents stated that early payment discount capture is significantly less important to their organization. A plurality of respondents from companies with more than $5 billion in annual revenues (43.6 percent) said the importance of early payment discount capture has not changed in their organi- zation. Seventy percent of respondents from companies with less than $250 million in annual revenues said the importance of early payment discount capture has not changed in their organization.
  • 24.
    2013 AP AutomationStudy | 24 Processing B2B payments For B2B payments, what methods do you use, and what portion of payments is made via each method? .00 10.00 20.00 30.00 40.00 50.00 60.00 Check ACH Accounts payable card 51.47 33.56 Wire 6.35 Purchasing card 9.00 2.93 Debit card 0.26 EDI 1.23 Checks are still the most popular method of payment for business-to-business transactions, but this year’s survey illustrates the steady decline of paper-based payments. When respondents’ answers were added and averaged, checks accounted for 51.5 percent of payments, compared with 57.1 percent of payments in last year’s survey. The survey showed continued growth for Automated Clearing House (ACH) payments. Survey respondents said ACH payments represent 33.6 percent of their transaction volume, compared with 25.5 percent in last year’s study. The next-closest payment type was the P-card, accounting for 9 percent of the payments vol- ume among those who responded to the survey. P-card’s share of business-to-business pay- ments was virtually unchanged from last year. Accounts payable cards represented 2.9 percent of the payments volume among those who responded to the survey. Wire transfer accounted for 6.4 percent of the payments volume among survey respondents. The use of debit cards, which have proved popular with consumers, was largely absent in re- spondents’ business-to-business payments. Overall, the results show that AP operations are shifting toward electronic means of payment but are still firmly entrenched in paper-based payment processes. Among companies with more than $5 billion in annual revenues, ACH represents a greater share of business-to-business payments than paper checks (46.8 percent to 37.4 percent, respec- tively). Paper checks represent 61.4 percent of the business-to-business payments among companies with less than $250 million in annual revenues.
  • 25.
    2013 AP AutomationStudy | 25 Are you processing more B2B payments electronically today than you were three years ago? Yes - 75.3% No - 24.7% 75.3% 24.7% Electronic business-to-business payments are on the rise. Three quarters of those who responded to the survey (75.3 percent) said their organization is processing more business-to-business payments electronically, compared with three years ago. Just one-quarter of survey respondents (24.7 percent) indicated that their organization is not processing more electronic business-to-business payments electronically. A whopping 85.7 percent of survey respondents from companies with more than $5 billion in annual revenues said their organization is processing more business-to-business payments electronically compared with three years ago. Similarly, 86.2 percent of survey respondents from companies with less than $250 million in annual revenues said their organization is processing more business-to-business payments electronically compared with three years ago. What is the increase in B2B payments today compared with three years ago? 100 percent - 4.9% 75 percent to 99 percent - 5.7% 50 percent to 74 percent - 14.8% 25 percent to 49 percent - 25.4% 10 percent to 24 percent - 26.2% Less than 10 percent - 23% 23% 5.7% 25.4% 26.2% 14.8% 4.9% Among survey respondents who are processing more business-to-business payments electroni- cally, 49.2 percent reported a moderate increase, saying electronic business-to-business pay- ments are up by 24 percent or less. One-quarter said their electronic payments are up between 24 percent and 49 percent. Some 14.8 percent stated that their electronic payments are up between 50 percent and 75 percent, while 5.7 percent indicated that their electronic payments volumes are up between 75 percent and 99 percent. It was rare for organizations to see their volume of electronic payments double during the past three years: Only 4.9 percent of those who responded said they have seen an increase of 100 percent.
  • 26.
    2013 AP AutomationStudy | 26 Companies with less than $250 million in annual revenues may be processing more electronic payments than three years ago, but the volume increase is hardly overwhelming. A plurality of survey respondents from this group (41.7 percent) indicated that their organization processes less than 10 percent more electronic business-to-business payments compared with three years ago. With regard to electronic payments, which of the following applies to your organization? Most of our B2B payments already are electronic. - 36.1% We have a strategy and are in the process of migrating to electronic payments. - 32.5% We have defined a strategy to migrate to electronic payments but have not begun the process. - 6.6% We have not migrated to electronic payments but plan to do so. - 10.8% We have no plans at this time to migrate to electronic payments. - 13.9% 6.6% 13.9% 10.8% 36.1% 32.5% Organizations have made tremendous progress in migrating to electronic payments during the past year. About one-third of those who responded to the survey (36.1 percent) said the majority of their business-to-business payments are electronic, compared with 20.6 percent of respondents in last year’s survey. Additionally, 32.5 percent of survey respondents indicated that their organization has a strategy in place for migrating to electronic payments. Last year’s survey reported that 38.7 percent of organizations had a strategy in place for migrating to electronic payments. Some 6.6 percent of respondents stated that their organization has defined a strategy for migrat- ing to electronic payments but has not started the process. And 10.8 percent of survey respon- dents indicated that their organization has not started migrating to electronic payments, but plans to do so. One in seven respondents said their organization has no plans to migrate to electronic pay- ments. Half of the respondents from companies with more than $5 billion in annual revenues (55.9 per- cent) said the majority of their organization’s business-to-business payments already are elec- tronic. Surprisingly, a plurality of survey respondents from companies with less than $250 million in annual revenues (35.7 percent) said the majority of their organization’s business-to-business payments already are electronic.
  • 27.
    2013 AP AutomationStudy | 27 How long do you expect it will be until the majority of your B2B payments will be complet- ed electronically? Less than 1 year - 22% 2–3 years - 59.8% 3–4 years - 8.5% More than 4 years - 9.8% 9.8% 22% 59.8% 8.5% The tide is clearly turning in the adoption of electronic business-to-business payments. More than three-quarters of those who responded to the survey expect that within three years, the majority of their business-to-business payments will be completed electronically. Nearly two-thirds of those who responded to the survey (59.8 percent) expect that in two to three years the majority of their business-to-business payments will be completed electronically, while 22 percent of survey respondents said they expect that within the next year the majority of their business-to-business payments will be completed electronically. Some 8.5 percent of survey respondents expect that in three to four years the majority of their business-to-business payments will be completed electronically. Just 9.8 percent of survey respondents indicated that it will be more than four years before the majority of their business-to-business payments are completed electronically. Technology use and satisfaction Which of the following do you use? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Variable (dynamic) discounting tools 13.1% P-card rebates 66.4% AP card rebates (e.g. AP card, ghost card) 43.1% Procurement catalogs 33.6% E-invoice submission process 51.8% financing Supply chain 8% This question sought to measure the market saturation of various tools and technologies avail- able to AP departments. Clearly, the use of purchasing card rebates as a source of revenue generation is being embraced by organizations. A whopping 66.4 percent of survey respondents said they use P-card rebates, while 43.1 percent reported taking advantage of AP card rebates.
  • 28.
    2013 AP AutomationStudy | 28 The survey also shows significant growth in the number of organizations using electronic invoic- ing submission processes and procurement catalogs, compared with a year ago. More than half of the survey respondents (51.8 percent) indicated that they use an electronic in- voicing submission process. Last year’s survey found that one-third of organizations were using an electronic invoicing submission process. Some 33.6 percent of survey respondents indicated that they use procurement catalogs. Last year’s survey found that one-fifth of organizations were using procurement catalogs. Variable discounting tools and supply chain financing came in as the least used options. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said they use P-card rebates, while 55.9 percent said they use e-invoicing. A plurality of survey respondents from companies with less than $250 million in annual revenues said they use e-invoicing, topping all other tools and technologies listed in the survey. What types of capture technology are you using? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Front-end imaging 57.9% Front-end extraction of document data 19.5% Post-workflow archiving 39.6% None of the above 25.6% Front-end classification 18.3% Front-end imaging continues to be the most commonly used capture technology in AP depart- ments, although post-workflow archiving is gaining in popularity. The majority of those who responded to the survey (57.9 percent) said their organization uses front-end imaging, a significant increase from last year when 47 percent said they used the tech- nology. A total of 39.6 percent of survey respondents indicated that they use post-workflow archiving, up slightly from last year’s survey when 36 percent of organizations reporting using the technology. Some 19.5 percent of those who responded to the survey said their organization uses front-end extraction of document data, while 18.3 percent of survey respondents stated that their organi- zation uses front-end classification. There is a large contingent of respondents who don’t identify themselves as users of the most common capture technologies. About a quarter of respondents reported using none of the tech- nologies listed. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said their organization uses front-end imaging technology. Post- workflow archiving is the top capture technology used by companies with less than $250 million in annual revenues.
  • 29.
    2013 AP AutomationStudy | 29 Does your organization use OCR technology to capture invoice data? Yes - 23.3% No - 76.7% 76.7% 23.3% Optical character recognition (OCR) technology replaces manual data entry by automatically interpreting invoice data and validating that data to ensure accuracy in downstream systems. Some 76.7 percent of those who responded to the survey indicated that they do not use OCR, compared with last year when 80.6 percent said they did not use the technology. With more than three-quarters of respondents reporting that they do not currently use the tech- nology to capture invoice data, this is an area ripe for expansion in the AP automation segment. Nearly three-quarters of survey respondents from companies with more than $5 billion in annual revenues (73.5 percent) said their organization does not use OCR technology to capture invoice data. Among companies with less than $250 million in annual revenues, just 14.3 percent use OCR. What are the primary reasons your organization does not use OCR technology? (Check all that apply.) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Lack of capital 21.8% Lack of a compelling business case 34.5% Unimpressed with the solutions on the market 16% Concerns about managing the change 6.7% Poor past experiences with OCR technology 6.7% Other 26.1% Lack of internal resources to support project 37.8% When asked why organizations do not employ OCR technology, the lack of internal resources and money, as well as the lack of a compelling business case, are the primary barriers cited. More than one-third of those who responded to the survey (37.8 percent) said a lack of internal resources.
  • 30.
    2013 AP AutomationStudy | 30 Some 34.5 percent of survey respondents cited the lack of a compelling business case as the primary reason their organization does not use OCR technology, while 21.8 percent identified a lack of capital. Sixteen percent of those who responded to the survey said they were unimpressed with the OCR solutions on the market. Concerns about managing change were cited by 6.7 percent of survey respondents. Another 6.7 percent of survey respondents blamed poor past experiences with OCR. Among respondents from companies with less than $250 million in annual revenues, lack of a compelling business case was the top reason cited for not using OCR technology. What invoice types are you processing? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Electronic 59.4% Paper,withpurchaseorder 84.2% Paper,non-purchaseorder 87.9% Paper,checkrequests forvendors 72.1% Paper,employee expenseclaims 52.1% Emailattachment/submission77.6% Fax 55.2% Webforminvoicesubmission 27.9% EDI 43.6% The survey backs up what most AP professionals already know: Organizations today are dealing with multiple types of invoices, and there’s still no getting away from old-fashioned paper. Some 87.9 percent of survey respondents said they process paper invoices without POs, and 84.2 percent of respondents said they process paper invoices with POs. Email submissions are the third most common type of invoice, with 77.6 percent of respondents processing them. Nearly two-thirds of those who responded to the survey (59.4 percent) said they process elec- tronic invoices, while 52.1 percent of respondents said they process paper employee expense claims. Surprisingly, fax submissions are hanging on fairly well, with 55.2 percent of organizations pro- cessing invoices via facsimile. Additionally, 43.6 percent of survey respondents indicated that they process EDI invoices. Just 27.9 percent of survey respondents said they process Web form invoice submissions.
  • 31.
    2013 AP AutomationStudy | 31 A stout 88.6 percent of survey respondents from companies with more than $5 billion in annual revenues stated that their organization processes paper invoices with POs. Some 88.9 percent of survey respondents from companies with less than $250 million in annual revenues said their organization processes paper invoices without POs, while 74.1 percent of re- spondents from this group indicated that their organization processes paper invoices with POs. Do you perform any invoice prep work before processing? Yes - 73.9% No - 26.1% 26.1% 73.9% Although the ultimate goal of AP automation is to allow invoices to be processed with little to no human intervention, the reality for most organizations has not caught up with the ideal. Nearly three-fourths of those who responded (73.9 percent) said they complete some type of prep work before processing an invoice, far outpacing those who said they do not (26.1 percent). These results are nearly identical to the findings of last year’s survey. More than three-quarters of survey respondents from companies with more than $5 billion in annual revenues (76.5 percent) said they complete some type of prep work before processing an invoice. Among survey respondents from companies with less than $250 million in annual revenues, 69.2 percent said their organization completes some type of prep work before processing an invoice.
  • 32.
    2013 AP AutomationStudy | 32 What ERP system are you currently using? JD Edwards - 3.6% Lawson - 7.8% Microsoft - 4.2% Oracle - 12% PeopleSoft - 14.4% SAP - 21% WorkDay - 0.6% No ERP system - 9% Other - 27.5% 3.6% 7.8% 4.2% 9% 0.6% 27.5% 14.4% 21% 12% SAP, PeopleSoft, and Oracle ranked highest when it came to enterprise resource planning (ERP) systems used by survey respondents. One in five survey respondents use SAP, while PeopleSoft and Oracle each have roughly one-sixth of the market. Lawson, Microsoft, and JD Edwards each pulled in smaller shares of the market. Relative newcomer WorkDay is used by 0.6 percent of respondents. About 27.5 percent of respondents said they used some form of ERP other than those men- tioned by name in the survey. Deltek emerged as the most popular choice in the “other” catego- ry, but it was among more than three dozen systems mentioned, indicating a fragmented market for ERP systems. SAP is the most commonly used ERP system among companies with more than $5 billion in an- nual revenues. Microsoft is the most popular ERP system among respondents from companies with less than $250 million in annual revenues, identified by 14.8 percent of respondents in this group. Are you using a supplier portal? Yes - 28% No - 72% 72% 28% An effective supplier portal can reduce invoice capture and entry costs as well as expenses related to routine vendor inquiries. Yet despite those benefits, just 28 percent of those who re- sponded said their organizations are using a supplier portal of any kind. The remaining 72 percent of those who responded said they do not use a supplier portal. The majority of survey respondents from companies with more than $5 billion in annual revenues (57.1 percent) said their organization is using a supplier portal. On the other hand, only 11.1 per- cent of companies with less than $250 million in annual revenues are using a supplier portal.
  • 33.
    2013 AP AutomationStudy | 33 Which of the following would be the most important driver of your decision to implement a supplier portal? Invoice status - 37.8% PO-flip invoice submittal - 7.2% Non-PO invoice submittal - 7.2% PDF/document invoice submittal - 18.9% Self-service Web form invoice submittal - 21.6% Payment submittal - 7.2% 7.2% 7.7% 7.7% 18.9% 21.6% 37.8% Organizations want their supplier portal to enable them to easily communicate invoice status — a task that can otherwise eat up valuable staff hours — and to allow suppliers to submit their invoices online. Invoice status was cited as the most important driver for implementing a supplier portal for more than a third of survey respondents (37.8 percent), while self-service Web form invoice submittal is the key driver for 21.6 percent of respondents. Among those who responded to the survey, 18.9 percent said being able to submit invoices as PDF files is the most important driver for implementing a supplier portal. Other considerations — including submitting non-purchase order invoices (7.2 percent), PO-flip invoice submittal (7.2 percent) and payment submittal (7.2 percent) — are not as great a concern. Forty percent of survey respondents from companies with more than $5 billion in annual revenues said self-service Web form invoice submittal is the key driver for implementing a supplier portal. A plurality of survey respondents from companies with less than $250 million in annual revenues (31.8 percent) said self-service Web form invoice submittal is the key driver for implementing a supplier portal.
  • 34.
    2013 AP AutomationStudy | 34 Who owns the management of the supplier portal? Procurement - 43.4% Accounts payable - 39.6% Treasury - 1.9% Other - 15.1% 1.9% 39.6% 15.1% 43.4% Of those who use a supplier portal, organizations were split when it came to who owns the man- agement of the portal. Some 43.4 percent said procurement manages the supplier portal, while 39.6 percent said the responsibility belongs to AP. Additionally, 1.9 percent said treasury owns management of the portal. Fifteen percent of respondents said another entity is in charge, with examples including account- ing, “data quality,” a third party, and IT. The majority of survey respondents from companies with more than $5 billion in annual revenues (52.4 percent) said AP owns their supplier portal. Where is it housed? On premises - 65.4% In the cloud - 34.6% 34.6% 65.4% Respondents also were split in regard to where their supplier portal is housed, with nearly two- thirds (65.4 percent) saying it is on premises and 34.6 percent saying it is “in the cloud.” Among survey respondents from companies with more than $5 billion in annual revenues that use a supplier portal, 76.2 percent said it is on premises. Eighty percent of survey respondents from companies with less than $250 million in annual revenues said their supplier portal is “in the cloud.”
  • 35.
    2013 AP AutomationStudy | 35 Which of the following AP functions are supported through your supplier portal? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Invoicestatus 89.8% Non-POinvoicesubmittal 22.4% PDF/documentinvoicesubmittal 30.6%Self-serviceWebform invoicesubmittal 46.9% Paymentsubmittal 22.4% Disputemanagement 28.6% Presentationofearly paymentdiscountoffers 12.2% Self-serviceaccount maintenance/updates 34.7% PO-flipinvoicesubmittal 42.9% Invoice status is far and away the most likely function to be supported through a supplier portal. Of the respondents who have a supplier portal and provided details about its functionality, 89.8 percent said it supports invoice status. Other functions are not as well supported. Some 46.9 percent of survey respondents said self-service Web form invoice submittal is supported, and 42.9 percent of respondents said PO-flip invoice submittal is supported. Ad- ditionally, 34.7 percent of survey respondents with a supplier portal said self-service account maintenance is supported, while 30.6 percent said PDF invoice submittal is supported, and 28.6 percent said dispute management is supported. Some 22.4 percent of survey respondents who have a supplier portal indicated that payment submittal is supported, and 22.4 percent stated that non-PO-based invoice submittal is sup- ported. Just 12.2 percent of survey respondents with a supplier portal said the presentment of early pay- ment discount offers is supported. Among the respondents from companies with more than $5 billion in annual revenues that use a supplier portal, all of them said their portal supports invoice status. Similarly, a plurality of survey respondents from companies with less than $250 million in annual revenues (60 percent) said their portal supports invoice status.
  • 36.
    2013 AP AutomationStudy | 36 How satisfied are you with your supplier portal? Extremely satisfied - 17% Satisfied - 44.7% No opinion - 25.5% Dissatisfied - 10.6% Extremely dissatisfied - 2.1% 2.1% 44.7% 25.5% 10.6% 17% The majority of respondents who have a supplier portal are satisfied with the technology. Some 44.7 percent of the respondents who have a supplier portal say they are “satisfied” with the technology, while 17 percent of respondents who have a supplier portal say they are “ex- tremely satisfied.” Conversely, 10.6 percent of respondents who have a supplier portal say they are “dissatisfied” with the technology, while 2.1 percent of respondent said they are “extremely dissatisfied.” One-quarter of survey respondents who have a supplier portal said they have no opinion on the technology. Among companies with less than $250 million in annual revenues that have a supplier portal, 75 percent of survey respondents said they have no opinion about the technology. Is your T&E expense management system integrated with your AP solution? Yes - 44.8% No - 55.2% 55.2% 44.8% There is a clear trend toward organizations integrating travel and entertainment expense man- agement with accounts payable solutions. This year, 44.8 percent said the systems are integrated, compared with 55.2 percent who said their systems are not integrated. The majority of survey respondents from companies with more than $5 billion in annual revenues (54.3 percent) said their T&E expense management system is integrated with their AP solution. Conversely, 77.8 percent of survey respondents from companies with less than $250 million in annual revenues said their T&E expense management system is not integrated with their AP solution.
  • 37.
    2013 AP AutomationStudy | 37 Do you believe that integrating your T&E and AP systems would provide significant ben- efits? Yes - 34.8% No - 37% Not sure - 26.1% They are already integrated. - 2.2% 2.2% 37% 26.1% 34.8% Survey respondents have mixed opinions on the value of integrating their T&E and AP systems. A plurality of survey respondents (37 percent) said they don’t see significant benefits in integrat- ing their T&E and AP systems. A slightly lower percentage (34.8 percent) see significant benefits in integrating their T&E and AP systems. Perhaps more telling is how many people have not made up their minds on the integration issue: 26.1 percent said they are unsure whether such a move would offer significant benefits. Some 2.2 percent of survey respondents indicated that their T&E and AP systems are already integrated. Nearly two-thirds of respondents from companies with more than $5 billion in annual revenues (62.5 percent) said they don’t see significant benefits in integrating their T&E and AP systems. Among respondents from companies with less than $250 million in annual revenues, 47.6 percent said they aren’t sure that there were significant benefits in integrating their T&E and AP systems. Is your organization considering using cloud services or software-as-a-service for AP processing? We already do - 8% Yes, within six months - 1.9% Yes, within 12 months - 4.9% Yes, within 24 months - 0% Yes, timing is unclear - 8.6% No - 47.5% Not sure - 29% 29% 47.5% 8% 8.6% 4.9% 1.9% Nearly half of the survey respondents (47.5 percent) indicated that their organization is not considering using cloud services or software-as-a-service for AP processing. These results are nearly identical to the findings of last year’s survey.
  • 38.
    2013 AP AutomationStudy | 38 Some 8.6 percent of survey respondents stated that their organization is considering using cloud services or software-as-a-service for AP processing, but the timing is unclear. Some 1.9 percent of survey respondents stated that their organization is considering using cloud services or soft- ware-as-service for AP processing within six months, while 4.9 percent said their organization is considering using cloud services or software-as-a-service for AP processing within 12 months. Approximately one-third of survey respondents (29 percent) aren’t sure whether their organiza- tion is considering using cloud services or software-as-a-service for AP processing. Sixty percent of survey respondents from companies with more than $5 billion in annual rev- enues said their organization is not considering cloud services or software-as-a-service for AP processing. The majority of respondents from companies with less than $250 million in annual revenues (51.9 percent) said their organization is not considering cloud services or software-as-a-service for AP. What do you see as the biggest benefit of cloud services or software-as-a-service for AP processing? Fast startup - 12.1% No capital investment - 10.7% Lower cost per invoice - 17.1% Reduced operational risk - 5.7% Rapid return on expense - 4.3% No software or hardware - 15.7% Minimal IT involvement - 29.3% Other - 5% 4.3% 12.1% 10.7% 5% 17.1% 29.3% 5.7%15.7% When it comes to the cloud, respondents are particularly fond of the fact that it requires minimal IT involvement. Some 29.3 percent of respondents said that was the top draw of the technol- ogy. Similarly, organizations like the fact that cloud services or software-as-a-service require no software or hardware — a benefit cited by 15.7 percent of respondents. Cloud services are also earning points for lower costs (cited by 17.1 percent of respondents), fast startup (12.1 percent), no capital investment (10.7 percent), and reduced operational risk (5.7 percent). Some 4.3 percent of survey respondents said rapid return on investment is the big- gest benefit of cloud services or software-as-a-service for AP processing. A handful of respondents are unsure of the benefits of cloud services or software-as-a-service for AP processing, and one respondent doesn’t see any benefits of the technology for AP pro- cessing. A plurality of respondents from companies with more than $5 billion in annual revenues (25 per- cent) like the fact that cloud services or software-as-a-service don’t require software or hard- ware. Among respondents from companies with less than $250 million in annual revenues, 34.8 percent said minimizing IT involvement is the biggest benefit of cloud services or software-as-a- service.
  • 39.
    2013 AP AutomationStudy | 39 What do you see as potential disadvantages of cloud services or software-as-a-service for AP processing? Runs counter to IT mandate for on-premises solution - 4.2% Limited ability to customize a solution - 16.1% Lack of control over changes to software - 11.2% Problems integrating with ERP solutions - 13.3% Potential problems with bandwidth, connectivity, or “down” time - 9.1% Risks to our data security - 25.9% Concerns with service-level agreements - 2.8% Cost - 11.9% Other - 5.6% 4.2% 16.1% 5.6% 25.9% 2.8% 11.9% 9.1% 11.2% 13.3% There is less consensus when it comes to potential downfalls of cloud services and software- as-a-service. Answers to the question were fragmented, but risk was atop the list. Risk to data security was cited by 25.9 percent of respondents, up from 19 percent in last year’s survey. Risk to data security was followed by limited customization (cited by 16.1 percent of respon- dents), problems integrating with ERP systems (13.3 percent), cost (11.9 percent), lack of control over software changes (11.2 percent), and potential downtime or problems with connectivity (9.1 percent). Nearly one-third of survey respondents from companies with more than $5 billion in annual revenues (31.3 percent) said risk to data security is the biggest potential disadvantage to cloud services or software-as-a-service. A plurality of survey respondents from companies with less than $250 million in annual revenues (28 percent) said risk to data security was the biggest potential disadvantage of cloud services or software-as-a-service.
  • 40.
    2013 AP AutomationStudy | 40 Technology spending How does your 2013 capital budget for AP automation projects compare with your budget for 2012? 8.2% Significantly higher (more than 5 percent) - 8.2% Slightly higher (up to 5 percent) - 16.4% Unchanged - 56.8% Slightly lower (up to 5 percent) - 8.9% Significantly lower (more than 5 percent) - 9.6% 9.6% 56.8% 16.4% 8.9% The survey shows that capital spending for AP automation projects will be a bit higher in 2013. One-sixth of survey respondents (16.4 percent) said their capital budgets for AP automation projects are slightly higher this year. Last year, 13 percent of survey respondents said their capital budgets for AP automation projects were slightly higher (defined as an up to 5 percent increase) compared with the previous year. Additionally, 8.2 percent of survey respondents said their capital budgets for AP automation projects are significantly higher than a year ago, up from 7.6 percent in last year’s survey. But AP technology vendors shouldn’t pop the champagne corks just yet. The majority of survey respondents (56.8 percent) said their capital budgets for AP automation projects remain unchanged compared with a year ago. Worse, 8.9 percent of survey respon- dents indicated that their capital budgets for AP automation projects are slightly lower this year, while 9.6 percent of survey respondents stated that their capital budgets are significantly lower. A plurality of survey respondents from companies with more than $5 billion in annual revenues (38.7 percent) said their capital spending for AP automation projects will not change in 2013. Sixty-eight percent of survey respondents from companies with less than $250 million in annual revenues said their capital spending for AP automation projects will not change in 2013.
  • 41.
    2013 AP AutomationStudy | 41 How much of your overall AP budget is spent on automation projects each year? More than 25 percent - 4.2% 15 percent to 25 percent - 5.6% 10 percent to 14 percent - 11.3% 7.5 percent to 9.5 percent - 6.3% 2.5 percent to 7 percent - 14.1% Less than 2.5 percent - 58.5% 58.5% 5.6% 4.2% 14.1% 6.3% 11.3% For most organizations, just a fraction of the overall budget is dedicated to automation projects each year. Some 58.5 percent of respondents said less than 2.5 percent of their AP budget is spent on automation projects. The second most prevalent answer was between 2.5 percent and 7 percent of the budget, which is the case for 14.1 percent of respondents. Some 11.3 percent of respondents said between 10 percent and 14 percent of their annual AP budgets are spent on automation projects, while 6.3 percent said between 7.5 percent and 9.5 percent of their annual AP budgets are spent on automation projects. Just 9.8 percent of respondents said their organization spends 15 percent or more of their AP budget on automation projects. It is important to note that about one-third of survey participants skipped the question, perhaps indicating unfamiliarity with their organization’s spending habits. Among survey respondents from companies with less than $250 million in annual revenues, 76 percent said that less than 2.5 percent of their AP budget is spent on automation projects.
  • 42.
    2013 AP AutomationStudy | 42 What are your operational priorities for AP automation in 2013? Rank the items below, with 1 being the most important and 11 being the least important. .00 2.00 4.00 6.00 8.00 10.00 12.00 Documentimaging 4.76 Automaticmatching 5.32 Workflow/invoiceapproval 3.80 E-invoicing 4.94 EDI 6.62 ACH 4.71 T&Eautomation 6.88 Outsourcing 9.96 ERPintegration 6.92 Improvingtax/legalcompliance 6.96 Datacapture/OCR 5.14 Invoice approval workflow tops the list of respondents’ AP automation priorities for 2013, with a mean rating of 3.80 on a scale of 1 to 11 (with 1 being the most important). Among the top priorities of survey respondents, invoice approval workflow is followed by ACH, which received a mean rating of 4.71, and document imaging, which received a mean rating of 4.76. E-invoicing is the fourth-highest priority of survey respondents in 2013, with a mean rating of 4.94. Other top AP automation priorities of survey respondents included data capture/OCR (with a mean rating of 5.14) and automated matching (with a mean rating of 5.32). Outsourcing received the lowest ranking among the AP automation priorities provided in the questionnaire. Among companies with more than $5 billion in annual revenues, invoice approval workflow, e-invoicing, ACH, and automated matching are the top priorities for AP automation in 2013. Invoice approval workflow is the top operational priority identified by survey respondents from companies with less than $250 million in annual revenues.
  • 43.
    2013 AP AutomationStudy | 43 Which of the following factors are the most important in justifying the cost of AP automa- tion projects? (Check all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Fewermistakes/higheraccuracy 65.7% Improvedmetricstounderstand andreduceexceptions 39.9% Increasedvisibility 49.7% Optimizingworkingcapital 24.5% Quickerturnaroundtimes 49.7%Reducedcostofprocessing APtransactions 76.9% Immediaterecordingofliabilities 33.6% Improveddatacapturefor bettercontroloverspend 35% FTEredeployments 44.1% Takingadvantageofdiscounts 39.9% EnsuringVATorothertaxcompliance 14% Improvingmastervendorfilemanagement 29.4% Other 2.1% Cutting the cost of processing AP transactions is the No. 1 factor in justifying AP automation projects, cited by 76.9 percent of survey respondents. Nearly as important is a decrease in mistakes, which was identified by 65.7 percent of survey respondents. Quicker turnaround times and increased visibility also are important to about half of the respondents. Some 86.7 percent of survey respondents from companies with more than $5 billion in annual rev- enues said cutting the cost of processing is the No. 1 factor in justifying AP automation projects. Among survey respondents from companies with less than $250 million in annual revenues, 75 percent said cutting the cost of processing is the No. 1 factor in justifying AP automation projects.
  • 44.
    2013 AP AutomationStudy | 44 What is your No. 1 obstacle to getting AP automation projects approved? Too many other projects - 33.3% Senior executive attention and sponsorship - 19.6% Lack of capital - 15.2% Lack of internal IT resources - 13% Other - 8% Solutions are not compelling enough - 5.1% Lack of a business case - 4.3% Lack of automation/technology savvy among suppliers - 1.4% Supplier resistance - 0% 5.1% 4.3% 1.4% 33.3% 19.6% 15.2% 13% 8% Competing initiatives is the No. 1 obstacle to getting AP automation projects approved, cited by 33.3 percent of survey respondents. One-fifth of survey respondents identified senior manage- ment attention and sponsorship as the top obstacle to getting AP automation projects approved. A lack of capital, a lack of internal resources, and a lack of compelling solutions also were men- tioned by respondents as top obstacles to getting AP automation projects approved. Respondents aren’t as concerned about supplier resistance or a lack of technology savvy or automation among suppliers. A plurality of survey respondents from companies with more than $5 billion in annual revenues (25.8 percent) cited competing initiatives as the No. 1 obstacle to getting AP automation projects approved. Nearly one-third of survey respondents from companies with less than $250 million in annual revenues (30.4 percent) said competing initiatives are the No. 1 obstacle to getting AP automa- tion projects approved.
  • 45.
    2013 AP AutomationStudy | 45 Which of the following executives are actively aware of AP automation efforts in your organization? (Select all that apply.) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Controller 71% 80.0% 90.0% CEO 17.6% CFO 65.6% COO 11.5% CIO 20.6% Treasurer 31.3% Chief procurement officer 33.6% President 13% By far, controllers and CFOs are the executives most likely to be actively aware of AP automation projects within an organization. Seventy-one percent of respondents indicated that their control- ler is actively aware of AP automation efforts in their organization, while 65.6 percent stated that their chief financial officer is actively aware of their AP automation efforts. After these executives, chief procurement officers, treasurers, chief information officers, chief executive officers and presidents are the executives most likely to be actively aware of an organization’s AP automation efforts. Some 79.3 percent of survey respondents from companies with more than $5 billion in annual revenues said their controller is actively aware of AP automation efforts in their organization. Among survey respondents from companies with less than $250 million in annual revenues, 70.8 percent said their CFO is actively aware of AP automation efforts in their organization.
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    2013 AP AutomationStudy | 46 CONCLUSION AP continues its steady migration toward electronic business processes. This year’s AP Automation Study shows a reduction in the percentage of paper invoices pro- cessed by respondents, with e-invoicing growing by nearly 20 percentage points since last year’s study. The volume of electronic business-to-business payments also has increased since last year. In fact, ACH now represents a larger share of business-to-business payments than paper checks among survey respondents with the highest annual revenues. Within three years, most survey respondents expect the majority of their business-to-business payments to be completed electronically. More organizations also are integrating AP and T&E systems, and better aligning AP with AR and procurement, to drive further efficiencies and increase information reporting and tracking. Yet, financial operations professionals have a long way to go before achieving the paperless office. Their push toward electronic processes appears stymied by competing corporate initiatives, flat capital budgets, and automation projects receiving a tiny portion of overall AP budgets. Cloud computing and software-as-a-service, an obvious way to get around these capital and resource constraints, are raising too many security concerns to be an option for most AP professionals. Outsourcing also is not a consideration for the vast majority of survey respondents. So the industry is likely to continue the gradual but unrelenting move away from paper highlight- ed by this year’s results. To ensure there are no potholes along the way, AP professionals must continue to leverage a mix of automation tools and technologies (workflow, OCR, e-invoicing, discount management, etc.), and solutions providers must offer compelling business cases and innovative business models to help end-users overcome the internal challenges identified in this survey.
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    2013 AP AutomationStudy | 47 appendix Are you processing more B2B payments electronically today than you were three years ago?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Are you using a supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Does your organization use OCR technology to capture invoice data?. . . . . . . . . . . . . . . . . . 29 Do you believe that integrating your T&E and AP systems would provide significant benefits?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Do you perform any invoice prep work before processing? . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 For B2B payments, what methods do you use, and what portion of payments is made via each method?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Has there been an executive-driven effort to have your AP and AR departments work more closely together?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Has there been an executive-driven effort to have your AP and procurement organizations work more closely together?. . . . . . . . . . . . . . . . . . . . . . . . . . .9 Have you considered trade finance as a part of your AP strategy? . . . . . . . . . . . . . . . . . . . . . 14 How does your 2013 capital budget for AP automation projects compare with your budget for 2012? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 How has the average time it takes you to process an invoice changed over the past year?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 How has the volume of your paper invoices changed over the past year? . . . . . . . . . . . . . . . 20 How has your volume of total invoices changed over the past year?. . . . . . . . . . . . . . . . . . . . 17 How have your costs to process an invoice changed in the past 18 months?. . . . . . . . . . . . . 13 How have your invoice entry and payment error rates changed in the past 18 months? . . . . 13 How long do you expect it will be until the majority of your B2B payments will be completed electronically? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 How long on average does it take your department to process an invoice?. . . . . . . . . . . . . . 21 How many FTEs are you using for invoice entry and matching?. . . . . . . . . . . . . . . . . . . . . . . . 10 How many total invoices (paper and electronic) are you processing monthly?. . . . . . . . . . . . 16 How much of your overall AP budget is spent on automation projects each year?. . . . . . . . . 41 How satisfied are you with your supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 How would you describe your AP environment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 In 2013, how will the importance of early payment discount capture to your organization change? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Is PO automation an important component of an AP automation initiative?. . . . . . . . . . . . . . 19 Is your organization considering outsourcing its AP processing?. . . . . . . . . . . . . . . . . . . . . . . 15 Is your organization considering using cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Is your T&E expense management system integrated with your AP solution?. . . . . . . . . . . . . 36 What AP processing functions is your organization outsourcing or considering outsourcing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 What are the most important drivers to automating the management of POs and invoices? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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    2013 AP AutomationStudy | 48 What are the primary reasons your organization does not use OCR technology?. . . . . . . . . . 29 What are your company’s annual revenues? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 What are your operational priorities for AP automation in 2013?. . . . . . . . . . . . . . . . . . . . . . . 42 What do you see as potential disadvantages of cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 What do you see as the biggest benefit of cloud services or software-as-a-service for AP processing?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 What ERP system are you currently using?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 What invoice types are you processing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 What is the increase in B2B payments today compared with three years ago?. . . . . . . . . . . . 25 What is the percentage breakdown of your invoices among the following. . . . . . . . . . . . . . . . 18 What is your average cost to process electronic invoices?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 What is your average cost to process invoices (both paper and electronic)? . . . . . . . . . . . . . 11 What is your average cost to process paper invoices?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 What is your No. 1 obstacle to getting AP automation projects approved?. . . . . . . . . . . . . . . 44 What percentage of early payment discounts do you typically capture?. . . . . . . . . . . . . . . . . 22 What percentage of your total invoice volume is paper-based?. . . . . . . . . . . . . . . . . . . . . . . . 17 What types of capture technology are you using?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Where is it housed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Which of the following AP functions are supported through your supplier portal?. . . . . . . . . 35 Which of the following describes your job function?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Which of the following do you use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Which of the following executives are actively aware of AP automation efforts in your organization? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Which of the following factors are the most important in justifying the cost of AP automation projects?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Which of the following would be the most important driver of your decision to implement a supplier portal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Who owns the management of the supplier portal?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 With regard to electronic payments, which of the following applies to your organization?. . . 26
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