Platforms and software that offer a way to engage with AP automation make big promises. They say they can transform your processes, reshaping the way your teams work and making them more efficient. They claim you can reduce costly errors and ensure that you meet business obligations at the appropriate time. All this may be true—but will it yield a noticeable difference to your company’s bottom line?
Once you engage with automation, you must have a way of measuring its impact. The results of analyzing the return on your investment should signal whether you’re heading in the right direction, or it could indicate you need to make some changes. To understand the results of your expenses, you’ll need to consider both measurable costs along with some intangible benefits.
Understanding your ROI makes a long-term difference
Before diving into the details, consider why you should have procedures and plans ready to go for measuring your automation successes. You’re trying to enhance visibility and productivity—not create another opaque layer of business software. Without analysis, you could:
- Miss valuable opportunities for additional automation.
- Fail to notice when you haven’t automated as effectively as possible.
- Remain stuck at a performance plateau that holds back your teams.
In contrast, the situation is much different when you take the time to investigate your ROI. By doing so, you can:
- Identify where you can further refine processes for additional improvements.
- See the real cost savings and benefits to your business expressed as hard facts.
- Chart the course of future automation projects and prepare for the next growth stage.
Measuring ROI with data
So, where do you look to see an ROI expressed? The answer begins with collecting the appropriate data, although there are many elements you can explore. The Kofax Marketplace, an online collection of solutions purpose-built to extend and enhance Kofax automation platforms, offers a way to begin crunching the numbers. The Process Analyser for Accounts Payable integrates directly with Kofax AP Essentials by Minit Process Mining to start delivering the insights you need.
With this solution, you can enjoy instant access to dashboards and data views that use information ingested directly from your AP processes. Here, you can measure critical KPIs, compare them to your processes before automation, and see visual representations of every part of the workflow. Not only does such a tool make it easier to know how you’re doing at a glance, but it also opens the door to observing long-term trends and making positive changes.
Integrating such a solution into your automation platform gives you a direct way to measure important indicators and other data. Let’s consider some of the data to explore when estimating your ROI.
What metrics reflect positive changes through automation?
As you analyze the output of tools such as the Minit process analyzer and your own observations, it’s important to consider the many metrics that can indicate progress. There is one, of course, that many see as the gold standard: cost per invoice. CPI is one of the easiest ways to determine whether you’re achieving cost savings through automation. A simple calculation of the total expenditures by the AP team divided by the number of invoices processed yields this number. In ideal deployments, you should be able to slash the dollar amount of your CPI substantially.
However, reducing actual processing costs is only part of the story. It clearly indicates if you’re saving money, but you could find savings in other parts of the process. Other key performance indicators to monitor include:
- The number of invoices you process in a given period. Are your teams completing more invoices now than they did before automation? How many more?
- Invoice cycle times. Are you reducing the time it takes to process every invoice? Compare average times today to average times before automation.
- Exception handling times. Even in automated workflows, some invoices will fall outside the rules you’ve established and require a human resolution. Ideally, you should see this number fall, along with the total number of exceptions.
- Error rates. Think of improper or incorrect payments.
- The number of discounts earned. Paying on time or early can earn you some vendor discounts, which are essential to track for factoring into your ROI.
By monitoring and measuring these statistics, you can develop a clear picture of your current ROI.
Automation creates indirect and intangible ROIs
Automation with Kofax tools opens the door to immediate cost savings across many metrics, from vendor discounts to cost per invoice. However, you should also consider the possible long-term return on your investment. These intangibles aren’t as easy to measure as a dollar amount, but they can have a significant impact on your business regardless. These elements include:
- Improved process visibility. Better oversight translates into identifying problems sooner rather than later while also noticing where you can make positive changes ahead of the curve.
- Fight back against fraud and unauthorized spending in an organization. Automation helps flag suspicious activity as exceptions that a trusted worker can analyze.
- More control over internal spending regulations and enhanced external regulatory compliance.
- The agility to integrate additional new technologies as your approach to automation continues to evolve, especially with access to the Marketplace.
- Better control over your finances to set the stage for driving growth.
Succeeding in today’s competitive environment is no easy feat. Keeping your business on the cutting edge and in total control over fundamental processes such as accounts payable is essential to keeping your company at the forefront. Focus your attention on your business mission—not on troublesome and outdated processes that hold you back.
Embrace Advanced Accounts Payable Automation Tools Today
AP automation is a potent force for transforming business operations today. Doing so effectively makes your business more agile, profitable, and prepared for the future ahead. Be sure that you understand how to approach measuring your ROI if you choose to invest in this space. Automation has many benefits to offer when properly deployed and correctly maintained. Explore the Marketplace solutions you can use to help measure ROI today.