Know your own business – MYOB, Xero & Reckon AP Automation

Accounts Payable Processing Automation

For any business looking to digitally transform their business, Accounts Payable seems like the most obvious business process to automate and transform. But for business owners and managers using MYOB, Xero or Reckon, they should ask themselves, do I really know how my accounts payable process currently performs, and will automation of this process improve the productivity and profitability of my business?

To answer these questions, there are several measures worth investigating.

Measure One – Cost to process a invoice

What does it cost your business to process a creditor invoice? How do you measure this? Most market averages now estimate the average cost to process a single invoice is around $14.00, with best in class at around $2.40. This cost variation can have a big impact on a business processing 500+ invoices per month.

To measure the cost of processing a creditor invoice you must consider a number of elements such as:

  • Printing, copying and filing costs
  • Staff wages
  • Approval process costs
  • IT support systems

Many of these costs are labour related costs. AP Automation addresses many of these manual labour intensive tasks associated with processing creditor invoices.

Measure Two – Time impact

For many business manually processing invoices in MYOB, Xero and Reckon, the time taken to process a single creditor invoice can have a major impact on their business.

Some of these impacts might include:

  • Missed discounts
  • Late payment fees and charges
  • Data entry inaccuracies
  • Lost documents
  • Costs associated with rectifying non-compliance
  • Duplicate invoice payments and corrections
  • Fraud detection and investigation

Again manual AP processes take longer as bottlenecks in the process can increase the average time it takes to process a invoice. This increased time and delays leads to real profitability impacts such as the extra fees for late payments or missed opportunities to take up discounts for on time payments. Automated AP processes also provide greater transparency and audit control.

Measure Three – Use of Purchase Order

For every invoice received there is a requirement to check these off to confirm firstly that the goods or services have been received and secondly the invoice is accurate in terms of amount, GL coding and item description.

The first step is to look at how many of your creditor invoices are linked to a purchase order. This becomes even more important for business requiring creditor invoices to be allocated across several jobs or locations. Those businesses with a higher percentage of invoices linked to purchase orders save time in validating and approving invoices which saves the business money.

Measure Four – Staff productivity

At the end of the day for any business it is about maximisiing the productivity of staff. Accounts Payable is no different. Businesses with MYOB, Xero and Reckon still manually entering invoices, manually approving invoices, and manually scanning or filing invoices are limited by these steps. Automating the Accounts Payable process looks to increase the capacity by replacing the manual tasks with intelligent automated systems. In this way AP staff spend most of their time dealing with a small number of exceptions rather than manually processing every invoice that comes into the business.

Whats next?

Once you have looked at each of these measures for your business, you should be in a position to identify the critical pain points in the process. At Colourworks Australia we have been providing leading business technology services for over 30 years. Through our product Autofile Purchase to Pay, we provide businesses of all sizes, in all industries with a complete Accounts Payable automation service. And as integration partners with MYOB, Reckon and Xero, you can be assured of a seamless improvement in your productivity.

Contact Colourworks Australia today on 1300 351 594 to learn more about our Autofile Purchase to Pay business technology service.