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Integratz 2 minute read

Unlock Hidden AP Savings Through Data Visibility

In the world of distribution, the highest performers have invested in one critical asset - deep data visibility into every aspect of their operations.

Without clear insights into key metrics, distributors remain oblivious to the millions of dollars lost from hidden issues like:

  • Late payment penalties
  • Missed early payment discounts
  • Bloated processing costs

Armed with accurate data, leaders can spotlight exactly where problems exist, quantify true impact, and activate solutions for transformative gains.

Let's examine prime opportunities uncovered through better data visibility into accounts payable processes:

Cut Late Fees Through Payment Cycle Tracking

Many distributors estimate 25% of their supplier invoices contain errors that slow payments. But without visibility into the actual numbers, those delays stay invisible and their true cost in late fees goes unknown.

Leading organizations closely track payment cycle time metrics, from invoice receipt to final settlement. This exposes inefficiencies so they can streamline issues like:

  • Manual workflows
  • Approval bottlenecks
  • Dispute resolution lags

With accelerated payment cycles, late fees plummet. One $100 million distribution company cut late penalties by 21%, saving over $270,000 annually.

Increase Early Payment Discounts

Most distributors capture early payment discounts from less than 5% of eligible invoices. Limited visibility into fast approaching discount deadlines means they miss out on significant savings.

By monitoring key discount metrics - percentage captured, average discount value, remaining days to expiry - leaders can spot workflow constraints impeding capture rates. Refining invoice routing, coding automation, and approval hierarchies enables more discounts to be capitalized.

One leading firm improved their early payment capture from just 5% to 45% of available discounts by optimizing their processes based on data. For a $100 million distributor, that jump would mean over $120,000 in extra annual savings.

Streamline Invoice Processing Costs

Manual invoice management tasks eat up significant processing costs through labor intensity. But gauging current performance and improvement opportunities requires tracking:

  • Invoice handling costs per document
  • Percentage of invoices processed manually
  • Time spent on manual data entry, routing, filing, etc.

With baseline visibility, distributors can target reductions through digitization, smart workflows, and automation. For example, one $15 million firm cut invoice processing expenses by 50% by eliminating manual data entry and paperwork through adoption of intelligent OCR invoice capture.

The Journey Starts With Insights

Distributors looking to step up into the top tier should consider following the example set by high performers - invest in data visibility across all facets of the business. Quantifying cost and efficiency metrics exposes priority areas for modernization.

You can't improve what you don't measure. Mobilizing teams around key data insights provides the roadmap toward reaching best-in-class. Distribution leaders will continue pulling away from the pack through harnessing the power of accuracy and visibility!

 


Integratz helps leading B2B distributors improve supplier pricing and invoicing processes to strengthen visibility, cycle times, accuracy, and their bottom line. We work with your current systems to identify the right processes and reduce wasteful ones, build secure and stable automated workflows, and bridge the gap between new and existing systems. If you have struggled with invoice processing and you’re noticing a hit on your bottom line, we'd love to connect. Set up a time to talk to our team to learn more!

Published by Integratz
Integratz