I was thinking recently… that’s what I do… I was thinking about time and desire and what it has to do with AP Automation.
I work with a lot of middle market companies. One interesting fact about a middle market company as opposed to a large market company is the ROI (return on investment). An ROI with a large market company generally comes in the form of head count reduction, which is something that a middle market company can’t do. A middle market company’s accounting staff do a lot of different task and don’t have the ability to specialize like a large market company.
Generally an ROI is expressed in the form of a dollar amount. The average dollar amount that I get for the middle market companies I work with is about $98,000 per year. The ROI comes from a reduction in their cost per invoice, which means that the company saves on processing cost. The problem is – NO ONE IS GOING TO WRITE YOU A CHECK!
That’s right… I like to call this ROI, “funny money”. It’s nothing that you can’t take to the bank. The money is a symbol of change and impact and isn’t anything that can be calculated to the bottom line. The only time I have seen bottom line savings are from firing people.
(Back to me thinking) – In order to capitalized on the ROI you must have the need for time and the desire to change. On average I help companies free up 8500 per year. Companies take that time and put those people on additional tasks that are more important to the tasks that they are currently doing. An example is, with Accounts Payable Automation no one is going to be doing accounting system data entry, which means you are able to take the people or person doing data entry and assign them to vendor compliance and/or pricing negotiation.
If you have a need to use your people better and need the time you have checked off the first factor that you can use AP Automation. The second, desire to change, is by far the most difficult. Doing what you are doing because that’s what you have been doing is easy to stick with it. To stop and tell you group that there is a better process our there and that you want to use your people in a better way and explaining how you are going to do that is much more difficult. You really have to want to change your process for the better, and until you get to that point it will be very difficult to automation Accounts Payable.
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