07 Jun How can I track ROI for my AP automation system?
Accounts payable automation can lead to visibly-obvious return on investment in decreased costs, but there are additional ways to measure ROI in more areas across the organization.
Estimate benefit areas
When your company decided to implemented automated AP, chances are good that features were prioritized by expected cost and time savings. Instead of reinventing the wheel, use this prioritized list as a jumping off point for ROI tracking. Expand the list by estimating other areas in which the system may save time and money, and then track those areas as well.
Go back in time
Not literally, although that would be great. Go back to past dates and compile reports of all of the features that you will be tracking so that you have a point of comparison when it comes time to measure progress. Go back a little ways and make sure that you have information from a few different time periods so that you can show that improvements are actually a result of the new system and not just cyclical.
Calculate all system costs
In order to show that the system was a good investment, it is important to know how much that investment actually was. Add up all funds put towards software, paid for support, and put towards maintaining the solution. Add actual labor dollars spent on implementation or wasted because of downtime and add this number to the cost.
Compare and calculate results
Compare the past reports and the new information to see if time or money has been saved in the expected areas. Perform calculations to determine the exact ROI to date, figuring labor dollars into the equation. Don’t be discouraged if progress is slow or if results are not immediately visible, as a new system is a long term investment that may take a while to pay off.
Learn more about the benefits of automating AP by contacting simplifiAP today.