A new sparkling technology solution might be the highlight of a meeting and the talk of the town, but the benefits might be nothing close to what you can save by automating everyday, not-so-exciting back-office processes like accounts payable. In fact, according to APQC (American Productivity & Quality Center) 62% of labor costs are concentrated in the back office, so focusing on these boring details can return substantial gains.
You’ve seen the press on how automation is changing the world; this next stat will really get you thinking.
When it comes to delivering bills to the accounts payable person or team, 80% are still sent through the US mail. This adds postal lag time (which might be worse now than ever), a significant factor in the average transaction taking about 48 days to complete.
It also costs about $9 to move a bill through an organization from start to finish and around $7 just to write and send a check.
DOES THIS SOUND FAMILIAR?
You might be processing 2000+ invoices per month from over 50 properties. In most organizations, invoices sit on desks, get lost in the paper shuffle, and finally get packaged up at each property and overnighted weekly to accounting for processing. The AP team has no visibility as to the status of outstanding invoices and is constantly fielding calls from vendors.
With the implementation of an online AP workflow system, real clients have seen invoice processing time reduced from several weeks to less than three days. Managers have increased visibility into status of outstanding invoices, aren’t scrabbling to find “lost” invoices, and are able to make better use of their time.
Importantly, month-end reporting has become a “non-event,” and the AP team becomes much more efficient. One particular client has recognized $70k per year of savings and has grown 20% with no increase in administrative staff – all as a result of implementing an online AP workflow system. Or perhaps I should say “all as a result of paying attention to one of the more non-exciting pieces of financial management.”
WHAT WOULD $70K MEAN TO YOU?
No matter what the latest tech article says, there is not one technology that will create a more profitable company. The true value is in creating a system of technologies that can create efficiencies in every part of the business process.
Since most of the costs of a real estate management company are incurred in the back office, it makes sense to look for ways to automate the processes that our businesses depend on. By adopting useful technologies, every size portfolio can be optimized in ways never before possible.