Figuring the ROI of Imaging Systems

DataServ offers a hosted solution to help your company improve payment processes, making the transition easy and quick. However, if you choose to take on the project internally, below is some information that will be helpful to keep in mind.

Making a business case for new AP technology is crucial if you want to get the project funded. An important part of the case is showing the Return on Investment (ROI) of the project. We recently asked AP managers who implemented an invoice imaging system what cost and benefit components they used in making their business cases.

Costs: The most common cost component is the direct investment in hardware and software systems, although software is not accounted for separately from the scanning equipment in all cases. AP managers generally understand, too, that maintenance costs are an important part of overall system costs, and must be budgeted.

Three other cost elements were included by a majority of respondents in their ROI calculations: staff training, staff time, and management time. A changeover to a new system invariably requires time and expense for each of these items, although the specific amount of time and cost may be difficult to estimate.

The final expense element was payments to outside consultants. Although the overall use of consultants in AP is relatively low, nearly half of companies that prepared a budget for an imaging and workflow initiative included the cost of professional advice in the plan. This suggests that many AP managers recognize the value of an experienced advisor to help them achieve the best results and avoid hidden pitfalls during the selection and implementation process.

Benefits: When we asked which benefits figured into their ROI calculations, two factors topped the list: 80% of respondents recognized savings in overhead and invoice storage costs as a result of implementing imaging technology. This cost result was expected, since in terms of space alone, the cost of storing digital images is less than the cost of storing paper invoices.

The next most common benefit of imaging and workflow technology was reduction in headcount, cited by 72% of respondents as a factor in their ROI calculations. The remaining categories, with 40% to 52% realizing some benefit, are a reduction in duplicate or overpayments, fraud reduction and an increase in trade discounts captured due to faster processing and/or superior validation.