How Accounts Payable Invoice Automation Can Solve Labor Shortages and Rising PTO
After more than a year of remote working, the end of the pandemic is now in sight. This should bring some sense of relief to AP teams everywhere – right? They can head back into the office - if they haven’t been there already – and manage all the moving parts of their job, just as they did before.
But multifamily and commercial real estate companies aren’t immune from the labor shortages and workforce challenges that are hitting every industry. And there’s just not enough time in the day to process invoices, cut checks, buy goods and services, and pull reports - without a fully staffed team of property managers, maintenance supervisors, AP clerks, financial controllers, and others doing their part.
That’s where accounts payables invoice automation can help real estate companies of all sizes. Digitization saves quantifiable time – and improves efficiency - for everyone that touches an invoice, orders supplies, or cuts a check. And real estate companies who employ these tools don’t have the constant worry about staffing and vacation leave on their AP team.
Abundant Job Openings, Fewer Workers & More PTO
According to a recent report by the U.S. Chamber of Commerce, there simply aren’t enough available workers to fill all current job openings.
On top of that, many employees are thinking about changing jobs this year and/or taking that long-awaited vacation.
Specifically, about 41% of global workers would consider leaving their current employers within the next year.
Many are rethinking what work means to them, how they are valued, and how they spend their time. It's leading to a dramatic increase in resignations — a record 4 million people quit their jobs in April alone, according to the Labor Department.
At the same time, PTO is on the rise.
Fast Company cited a study conducted by the Society for Human Resource Management (SHRM) that found 41% of employed Americans feel burned out from their work, and 48% feel mentally and physically exhausted at the end of the workday. Another study conducted by Robert Half found that a quarter of workers forfeited paid time off in 2020, and a third intend to take three weeks or more of vacation time in 2021.
Real estate companies everywhere are feeling all these same workforce pressures. Yet, they have as many, if not more, invoices to process and vendors to pay as they did in the first part of the year.
Accounts Payable Invoice Automation Drastically Reduces Invoice Processing Time
With respect to invoice processing, AP automation providers like Nexus can shave 50% off of invoice capture time, compared to paper processing done by employees.
That’s because invoice automation removes the heavy burden from property managers of dealing with vendor invoices – from opening and sorting them to shipping them off to the central AP team for processing.
Invoices can be ingested into the AP automation software – often through scanning, electronic file transfer, or by the suppliers themselves, who can submit their invoices through a self-service portal. Some companies even offer outsourced services to manage the invoice ingestion process.
Then, there are additional time savings on invoice review and approvals. AP automation software, like Nexus, can reduce that time too because all the invoices are housed within one centralized platform. Automated approval workflows are set up to route invoices to the right reviewers (including property managers) and appear on their “to-do” dashboard for approval.
Plus, accountants can “batch approve” invoices, enabling greater transparency and time savings.
Accounts Payable Invoice Automation Reduces the Time to Answer Vendor Questions and Pull Reports
Dealing with vendor questions like, “When can I expect payment?” or “Did you receive my invoice?” can eat up valuable time that property managers and AP teams simply don’t have. With some ADP automation companies, there are dedicated self-service portals for vendors to check payment and invoice status 24-7.
Some multifamily and CRE families report that a good self-service portal, like Nexus’s NexusConnect, shaves off 75% of their time spent communicating with vendors.
Some multifamily and CRE families report that a good self-service portal, like Nexus’s NexusConnect, shaves off 75% of their time spent communicating with vendors. Time savings on administrative tasks using Nexus AP Automation, instead of paper-based processes.
Accounts Payable Invoice Automation Reduces the Time Spent on Procurement Activities
Some automation companies also offer the ability to purchase goods and services directly in the automation software– and then do a 2 or 3-way match with the invoice, purchase order and receipt.
That type of automated process not only helps companies avoid surprises at the end of the month but also reduces time spent on procurement.
Employees can select products from their supplier catalogs, place them in a master shopping cart for easy checkout, click to create electronic purchase orders and view whether the purchase is within budget (for the property). It’s all centralized, visible, and accessible with just a few clicks.
For some companies, procurement time is reduced by 90%. Maverick or non-compliant spend is often reduced by at least .5%, often because of the greater visibility.
Automated Payments Reduce the Time Spent on and Cost of Paying Vendors
Then, there are vendor payments. Obtaining check approvals, printing checks, stuffing the checks in envelopes, and putting them in the mail often consumes days out of every month. With automated vendor payments, a good chunk of that time goes away.
Everything can be handled with clicks. A payment file is sent from the property management system to the automated payments vendor.
Designated approvers – from AP manager to CFO – can then review/approve the transactions online and greenlight for sending payment. The automation company will then pay suppliers electronically – on the client’s behalf.
With Nexus, that electronic process shaves 50% off time spent processing AP payments. It also eliminates about 40% of the cost (because companies aren’t buying printer ink, postage, envelopes, etc.).
Fewer Headcount Required for Invoice Processing and Payments
Pushing paper - and counting on a fully staffed team of employees such as property managers, AP clerks, managers, and many others - may have been a viable, albeit inefficient, way to handle invoice and payment processing in the past.
But it’s less doable today, with the labor shortages and Post-Covid workforce changes.
There’s a much better alternative for AP teams than bringing on more headcount: automating key processes, like invoice processing, procurement, and vendor payments. By using automation solutions, teams can realize huge time and even cost savings. They can perform the same amount of work, and even grow their holdings, without backfilling or hiring FTEs.