Streamlining Payables in Higher Education

Colleges and universities around the United States are grappling with a variety of 21st century challenges, from finding a place for the Internet in the conventional classroom to questioning the perceived value of a college degree. Higher education is a competitive industry, especially in today’s economy. Students have more options, from traditional 4-year institutions, community colleges and online universities – and paying for college is on almost everyone’s minds.

Where does paying the school’s bills come into play?

Educational institutions are under weighty financial pressures, and their finance and accounting departments are evaluating AP costs and processes to identify opportunities to save money and work more efficiently. The solution for most innovative leaders is automation and streamlining payables.

AP Automation in Higher Ed

Technology research and consulting firm PayStream Advisors’ recent Purchase to Pay in Higher Education report provides a view into payables in the higher education sector. Their survey suggests that while educational institutions are less likely to have made significant investments in automation technology when compared with those in other industries (17% vs. 31%), more colleges and universities have adopted at least some advanced technology (50% vs. 33%).

Percentage of higher education institutions surveyed that say they use (or plan to use) the following AP technologies:

• Electronic payments: 83%
• Purchasing cards: 75%
• Automated workflow: 58%
• Front-end imaging: 42%
• OCR/Automated data capture: 33%

Considering the key benefits of e-invoicing, specifically, here is the percentage of survey respondents reporting the following favorable results after implementing e-invoicing solutions:

• Increased on-time payments: 71%
• Increased ability to capture discounts: 71%
• Reduction in FTE/processing costs: 57%
• Fewer lost/missing invoices: 57%
• Quicker approvals: 57%
• Fewer supplier inquiries: 57%
• Improved vendor satisfaction: 57%

The study also reveals the biggest challenges to e-invoicing in higher education is supplier adoption (86% vs. 56% for all industries), in-house and supplier system integrations (71% vs. 46%), and internal change management (43% vs. 62%).

From Insight to Action

It’s clear that many colleges and universities are on their way to streamlining their AP processes. They see the operational value in taking them from manual to automatic, and innovators are seeing the impact on costs. The combination of using less paper, experiencing less errors, and taking less time to get from point A to point B results in good outcomes for institutions with tightening budgets.

But for some institutions, embracing automated solutions isn’t something that happens over night—especially where there are firmly rooted manual processes. Automation cheerleaders within these organizations should promote technology’s long-term benefits to help decision-makers see they way forward. When leaders see that their AP department can deliver a real-time view into transactions and provide robust reporting—in addition to cost-savings and increased efficiency—they begin to appreciate the value of technology in new ways.