A central tenet of Airbase’s innovative spend management is that accounts payable processes are long overdue for an overhaul. As more teams discover the benefits of spend management, we’ve sparked a revolution in AP, but there’s still work to do. To assess the state of AP processes today, PYMNTS conducted a survey of 225 finance executives at SaaS companies in the U.S. with between 100 and 1,500 employees to find out how they feel about their AP processes.
The numbers show that those inefficiencies are holding companies back to a degree that surprised even us. Do you recognize your own company in any of the stats below?
Key pain points for AP processes.
Respondents are overwhelmed by inefficiencies, duplication, and manual work. Here are some of their prime complaints:
- Poor visibility: More than 90% feel they don’t have full visibility and control over spending.
- For 70% of surveyed executives, lack of visibility before spending happens is an issue. This is a bigger concern for larger companies, with 77% expressing concern.
- Wasted time: A full-time AP employee spends an average of 17 hours a week dealing with employee spending, typically doing tasks that could be handled by Airbase, including collecting receipts and processing expense reports.
- 18% of their time is spent on manual tasks, again doing tasks that Airbase could handle. The truly frustrating part of this is that their time could be spent making a more valuable contribution to their companies’ success.
- Wasted spend: Executives believe they could save an average of 11% with improved visibility. Being able to see company-wide purchasing activity in real time would allow them to reduce zombie, duplicate, or unnecessary spend. Not surprisingly, this number was higher in companies that do not have a consolidated platform for all spending.
What’s holding companies back from getting a handle on visibility, wasted time, and wasted spend? 75% of respondents say they have challenges with the processes for managing AP. They identified the top challenges as:
- Data entry errors.
- Delays in the submission of expense reports.
- Payments taking too long.
- Fraud issues.
- Not having access to real-time data.
We were surprised by the emphasis on data-entry errors, particularly in this age of accounting automation — surely, mistakes are avoidable. However, according to the survey, almost half of respondents experience these errors. The consequences also add up: 10% of bill payments made by SaaS firms require adjusting due to incorrect information. That can lead to poor vendor relations, late payment fees, and even poor morale for the AP team. (Firms that use a consolidated spend management system have a lower average of payments with late fees.)
A cure for poor AP processes.
People over-index the value of the easily-attained benefits like eliminating errors that automation provides. They undervalue what it means to achieve spendlightenment. Once experienced, their appreciation for it soars.
Respondents currently using a consolidated platform report that the top benefit is increased transparency, but respondents who do not currently use one didn’t identify this as a key benefit. In fact, those with a consolidated platform were 62% more likely to identify this as a top value than those without.
Larger firms with 500-1,500 employees are more likely to see the benefits of a consolidated system for AP, naming an average of 7.1 benefits, compared to 5.2 for smaller companies. The perception of the value of each benefit is often different. For example, 54% of representatives from larger firms named increased payment options as a perk, compared to 25% from smaller firms.
Let us show you how Airbase solves AP pain points — book a demo!