Consider the move to AP automation.
By now you’ve heard that marketplaces are a simple, efficient purchasing solution for any district. They allow teachers and administrative staff to shop online across multiple catalogs and get the best prices on items, many of which are delivered next day.
Perhaps as important as price savings is how marketplaces drastically reduce staff time spent on invoicing and accounts payable (AP). According to Ardent Partners’ research, best-in-class organizations have a 73% faster processing time with procure-to-pay solutions in place.
The high cost of “doing what we’ve always done.”
How many teachers and staff do you have running to the nearest big-box store, using their credit card, filling out an expense form and getting reimbursed? With no formal oversight, each staff member is probably paying 10-40% more per item, per trip. Add to inflated prices the long hours that AP staff spend organizing and processing expense reports, and you have a significant amount of unnecessary spend.
There are other hidden costs in “old-fashioned” procurement processes. Set-up time for a new vendor, and “getting a check cut for snail mail,” are two which are obviously labor-intensive. In fact, according to Ardent Partners, the average cost to process a vendor invoice is $10.95. On the other hand, marketplace districts are processing invoices for up to 80 % less — $2.25 each.
Similarly, if your vendors are not strategically sourced, you are probably squandering money. With no negotiated strategy in place, you miss out on bonuses like early pay discounts and VIP promotions. You also risk that the vendor has inconvenient payment terms, possibly resulting in late payment charges on top of everything else.
Can you really say that you’re being the best steward of your budget when you’re operating with such inefficiencies?
The good news: You don’t have to do what you’ve always done.
The good news is that you have options. There are many districts that operate with a marketplace that electronically brings invoices directly back into their ERP. By converting your suppliers to strategic sources and marketplace vendors, you can automate and streamline the AP process, and greatly improve efficiency.
Below are some advantages of adding AP functionality to your customized marketplace:
- Invoices are electronically received via electronic invoice capture eliminating the traditional manual entry required by AP departments.
- Invoices are processed “straight through,” that is, they go through the 3-way-match AP process without anyone on the AP team having to touch the invoice.
- Requisitioners can electronically confirm a goods receipt with a packing slip, which speeds up invoice payment and reduces paper workflow.
- Electronic processing of invoices allows AP teams to leverage remote workers since paper processes are eliminated.
- Marketplace catalogs bring accurate pricing helping to reduce the number of invoice exceptions that take up too much staff time.
Invoice automation is within reach and is quickly becoming the norm to improve cash management and drive greater staff efficiency. Isn’t it time you take the next step to ensure your district operates at its maximum efficiency?
Source: Ardent Partners, 2022