In this blog post, we will show you the hidden costs of manual accounts payable processes. We will also explain how AP automation can help you lower these costs. You will gain a clear understanding of the ROI of AP automation for JD Edwards and the potential savings your business can achieve.
The hidden costs of manual AP processes in JD Edwards
Many companies continue to rely on manual accounts payable processes, believing that AP automation is a non-essential investment. Often, this decision stems from underestimating the hidden costs associated with manual invoice handling. As a result, they face higher operational expenses and fail to fully leverage the capabilities of JD Edwards.
Let’s explore the key inefficiencies and hidden costs of traditional AP processes, and why they might be costing your business more than you think.
Extra AP staff cost
Manual and time-consuming AP tasks often lead to higher staffing costs. Beyond the standard expense of employee hours, there are several hidden costs tied to labor-heavy processes.
When invoice volumes increase, finance teams may need to bring in temporary staff to manage the extra workload. Plus, since manual workflows often depend on individual system knowledge, high staff turnover means more time and money spent on training new hires. On top of that, identifying and correcting errors adds even more strain on time and resources.
High risk of human errors
Hand-keying invoice data into JD Edwards increases the likelihood of mistakes—such as typos, duplicate payments, or incorrect amounts. Resulting in payment errors and compliance issues.
Increased processing costs
Industry benchmarks show that the costs of manually processing and invoice is between $12 and $20. With AP automation you can reduce the cost per invoice to as low as $3.
Delayed Approvals
In paper-based AP processes, physical documents are stored in file cabinets and passed from desk to desk. But what happens when an approver is unavailable or offsite? Approvals get stuck, leading to delays and additional late payment fees.
Missed Early Payment Discounts
When approvals are delayed and processes slow down, payments are postponed, causing you to miss out on early payment discounts. This also harms vendor relationships, making it harder to negotiate favorable terms.
Lack of Visibility and Tracking
Without a centralized system, tracking invoices becomes a challenge. Audit trails are hard to maintain, and locating a specific invoice can be time-consuming. This lack of visibility leads to unnecessary research costs and hinders informed decision-making.
Fraud and Compliance Risk
Weak control over approvals and audit trails increases the risk of fraud and exposes the organization to potential regulatory penalties.
Poor Vendor Relationships
Payment delays frustrate suppliers, damage vendor relationships, and result in less favorable payment terms for future invoices.
Disjointed Systems and Data Silos
The absence of workflows and automation leads to scattered data across emails, spreadsheets, and filing cabinets. This fragmentation requires extra time and effort to locate invoices, while also reducing cross-team collaboration.
The direct and indirect ROI of AP Automation
The ROI (Return on Investment) of an AP automation solution reflects the financial gains your business achieves compared to the total cost of implementation. These gains come from both time savings and cost reductions. As a JD Edwards user, there’s an added benefit—you’ll extend the lifespan of your EnterpriseOne investment by getting more out of your existing system.
Why It Matters for JD Edwards Users
JD Edwards is one of the most robust ERPs on the market. But despite its capabilities, many AP tasks are still handled manually, such as:
- Keying invoice details into the system
- Matching POs and receipts
- Emailing approvals
- Chasing down late approvals
By implementing an AP automation solution, you transform these manual tasks into streamlined workflows. Your AP team function shifts from data entry to reviewers. Resulting in major cost savings and a strong ROI—both direct and indirect.
The Direct ROI of AP Automation
Direct ROI refers to the tangible and measurable benefits your organization gains from automating accounts payable. These benefits include clear cost savings and efficiency improvements that have a direct impact on your bottom line.
Reduction in Labor Costs
AP Automation boosts the efficiency of your AP department, allowing you to accomplish more with fewer resources. As your business grows, you can avoid expanding your team and instead redistribute your existing workforce to higher-value tasks.
Lower Invoice Processing Costs
With less manual work involved, the cost of processing each invoice drops significantly—going from $12–$20 per invoice down to just $2–$5.
More Early Payment Discounts, Fewer Late Payment Fees
Automated approval workflows keep things moving, so invoices are processed and paid on time. This not only helps you take advantage of early payment discounts but also avoids costly late fees.
No Duplicate Payments
Automation helps eliminate human error by flagging duplicate or suspicious entries before payment is made. This reduces the risk of duplicate payments and the costs that come with them.
Reduction in Printing and Storage Costs
With digital invoice management, there’s no need for physical storage or printed documents—saving both space and money.
The indirect ROI of AP Automation
The indirect ROI of AP automation refers to the long-term benefits that are not money-related. These benefits help improve efficiency and make the finance function stronger and more effective over time.
Improved Vendor Relationships
Paying invoices on time builds trust and reliability with vendors. This leads to better payment terms, increased flexibility, and stronger strategic partnerships.
Real-Time Data Visibility
Automation tracks all invoice-related activities, making reporting and analytics easier and more accurate.
Cross-Team Collaboration
With improved visibility, everyone in the organization—from finance to operations—can access AP data. This enhances collaboration and brings non-AP stakeholders into the process.
Increased Efficiency and Productivity
Automation enables better resource utilization, reduces manual errors, and enforces predefined workflows. The result: greater efficiency and higher employee productivity.
Audit Readiness and Compliance
Digital records and clear audit trails ensure you’re always prepared for audits and reduce the risk of non-compliance or penalties.
Process Standardization Across Departments or Locations
Automation enforces consistent workflows and approval hierarchies, helping reduce bottlenecks—especially useful for global or multi-site organizations.
Business Continuity
Mobile applications support remote invoice approvals, enabling hybrid work and keeping operations running smoothly, wherever your team is.
Automate AP in JD Edwards with SCANMAN
Among the many accounts payable solutions for JD Edwards, SCANMAN stands out as the go-to choice. Because it’s fully embedded within JD Edwards, SCANMAN AP Automation doesn’t require external tools – delivering a higher ROI than stand-alone solutions. It removes manual inefficiencies and extends the lifespan of your EnterpriseOne system, making your JD Edwards investment even more valuable.
Conclusion
While investing in AP automation might initially seem unnecessary, your company will quickly see significant cost savings and a noticeable increase in AP efficiency.
Contact our team to find out the ROI of SCANMAN AP Automation.
