How do your accounts payable processes stack up against other New Zealand businesses, or with your competition? How many staff do Kiwi businesses allocate to accounts payable? Have they automated the process? What do they think will be their biggest AP process challenges?
Until now, no one has had the answer to these questions. There was no independent research measuring accounts payable performance in New Zealand. No benchmark for where your company sits on the accounts payable efficiency scale.
So streamline, the specialists in back-office solutions, commissioned the 2016 New Zealand Accounts Payable Benchmark Report. We surveyed businesses from across the country and asked them to tell us about their accounts payable process.
This is what they told us:
- Accounts payable teams are small. Half of the respondents have just one full-time staff member for AP invoice processing.
- Invoice scanning is still not mainstream: just under half of respondents currently scan invoices for record-keeping purposes.
- Automation is even less common: only 22 percent of respondents have automated their AP invoice processing.
- Manual invoice processing and its associated problems present the biggest challenge to most respondents. For the next biggest group, the challenge lies in moving towards process automation.
Approximately how many accounts payable invoices does your organisation process each month?
New Zealand businesses have a broad spread of AP activity, ranging from less than 600 invoices monthly to more than 10,000. The vast majority reported levels at the lower end of the range. Thirty-four percent reported between 100 and 600 invoices each month, 22 percent reported between 600 and 1,000, and 20 percent said they handle between 1,000 and 2,000. At the high end of the range, only three respondents process more than 10,000 invoices each month.
How many full-time staff are employed to process your accounts payable invoices?
Half of the respondents have just one full-time staff member to process AP invoices. The next biggest group, 32 percent, have two. After that, the numbers tail off sharply. At the busiest end of the scale, just one respondent employs more than 10 AP invoicing staff.
Does your company scan invoices as part of the archiving / record keeping process?
Broadly speaking, the more AP invoices a business handles, the more likely it is to scan them. A third of businesses with fewer than 1,000 invoices each month said they scanned them. Of those businesses with more than 2,000 invoices, 83 percent used scanning. Overall, 45 percent of respondents said they scan their AP invoices.
Aside from scanning for record keeping purposes, do your accounts payable processes make use of any automated systems? If so, please describe briefly.
The automation of AP processing is far less common than invoice scanning. Just one in five respondents said they use any kind of AP process automation apart from invoice scanning.
The three busiest respondents — those with more than 10,000 AP invoices monthly — all told us they have automated their processes. Apart from them, however, there is no correlation between workload and automation levels. Some companies with low invoice levels use automation; some much bigger ones do not.
Two respondents told us they have no process automation, but are currently implementing electronic workflow approval.
What do you consider to be the biggest challenges with accounts payable processes for your company over the next three years?
Let’s start with something for the glass-half-full brigade. Seven respondents really didn’t expect to have any challenges at all.
The rest of the respondents had no difficulty projecting problems. The largest group, 35 percent of the total, pointed to the familiar problems of manual invoice processing. Seven of them said their biggest challenge would be unnecessary mistakes: keying errors, incorrect invoices, the wrong bank account details or inaccurate accounts coding. Six respondents thought they’d be challenged by growth in transaction volumes, while four singled out the printing or storage of invoices. One described their old AP system as simply ‘not very user-friendly’ , while another thought their challenge would be the reconciliation of vendor statements without using scanning or OCR.
No surprise, then, that AP automation was on the radar for the next biggest group of respondents. Nine of them thought their biggest challenge would be in replacing their current manual workflow with an online process. ‘Eliminating manual intervention,’ offered one of those nine. ‘Training of staff to use the online system,’ said another. A third wrote: ‘Trying to get further automation implemented with a limited ROI’.
The next most prominent worry: staff retention. Three respondents singled out ‘staff turnover’ or ‘retaining quality staff at current rates’ as their biggest challenge.
Fraud was top of mind for two respondents. ‘Cyber fraud’ wrote one; ‘controls to prevent fraud’ said another.
How we compiled the 2016 New Zealand Accounts Payable Benchmark Report
In August and September 2016, we invited 450 New Zealand businesses to contribute to the NZ Accounts Payable Benchmark Report. Fifty-three of them completed our online survey. The respondents included big businesses and many much smaller ones. Their AP activity levels ranged from less than 600 AP invoices every month to some handling over 10,000.
The typical respondent was based in Auckland, had fewer than 300 employees, and was in the services industry.
Here’s what we asked them:
- Approximately how many accounts payable invoices does your organisation process each month?
- How many full time staff are employed to process your accounts payable invoices?
- Does your company scan invoices as part of the archiving / record keeping process?
- Aside from scanning for record keeping purposes, do your accounts payable processes make use of any automated systems? If so, please describe briefly.
- What do you consider to be the biggest challenges with accounts payable processes for your company over the next three years?
The 2016 New Zealand Accounts Payable Benchmark Report was prepared by streamline.
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