Earlier this week, we wrote about how The Wilton Companies built a case for AP automation and saved more than $72,000 a year. Today, we’re going to look at how Humphrey Management built a case and also saved more than $70,000 in labor costs a year. How did they do it?
Like The Wilton Companies, Humphrey Management had a paper problem. They manually processed more than 4,500 paper invoices a month, which was quite admirable considering all of those invoices were handled only by four AP personnel and an AP manager.
More than 90 percent of these paper invoices were sent directly to their communities (they managed 70 across six different companies). Then they were stamped, signed for approval, and finally sent to corporate for payment.
Humphrey Management’s CFO, Sheri McGowan, described the situation like this: “…with paper going back and forth between the offices, it was easy for things to get lost in the mail, and since there were so many steps in the process, approval timeframes were often exceptionally lengthy. Our manual process was so inefficient that our community managers would occasionally have to take time out of their hectic schedules to actually drive the invoices to the corporate office in order to get them processed.”
Not only that, but regional managers actually had to physically travel to the respective communities to approve invoices whenever there was a turnover in staff, which added yet another task to their day.
The financial team at Humphrey Management knew something had to change. In 2005, a hotel division within their management group identified AvidInvoice as a solution to their “paper problem.” Later, when the hotel division was sold, McGowan and her team took advantage of the situation by keeping the product and implementing AvidInvoice across the rest of the companies.
Their early adoption of AvidInvoice enabled them to transition to an automated AP process long before many of their competitors, which created a competitive edge for Humphrey Management. They optimized their AP processes and realized a significant reduction in their operating expenses. That savings was then allocated to more deserving and high-level areas of their business.
Humphrey Management reduced their AP staff by 50 percent, because the AP team no longer had to perform meaningless tasks, such as data entry, copying bills, filing, fielding calls from vendors, and searching for bills in filing cabinets. This resulted in an average annual savings of $70,000 in labor costs. Regional Managers also made better use of their time thanks to the new approval process, because they could now approve invoices anytime, anywhere.
“When we bought the system I didn’t realize just how beneficial it would be during budget season,” said McGowan. “I used to spend so much time going back and forth to the filing cabinets to look for an invoice when I wasn’t quite sure what the bill was for, but now I can easily pull up the bills without leaving my desk.”
Automating saved Humphrey Management more than $70,000 a year. Would you like to see how much AP automation could save your company?