Despite modern advancements in infrastructure, many utility companies are still running their accounts payable (AP) departments like it’s 1995…and it’s costing them more than they realize.
Paper invoices. Manual approvals. Spreadsheet tracking. These outdated processes may seem manageable day to day, but in reality, they’re draining resources, creating compliance risks, and delaying modernization. For utilities, especially those navigating regulatory filings, remote vendor networks, and high-volume billing cycles, the inefficiencies are amplified.
The Hidden Costs of Manual AP in the Utility Sector
Let’s start with the obvious: manual AP is slow. But it’s also expensive and risky.
- Labor inefficiencies: Manually processing an invoice can cost between $12 and $20, factoring in data entry, routing for approval, document handling, and filing.
- Approval delays: Lost invoices, mailbox bottlenecks, and siloed systems lead to missed early-payment discounts and frequent late fees, which quickly snowball for utility companies managing thousands of vendors.
- Compliance challenges: Public utility commissions and environmental regulators require detailed audit trails. Manual processes introduce human error — and missing documentation during audits can lead to fines or reputational damage.
Real-World Example: West Kentucky Rural Electric Case Study
Let’s bring this into focus with a real-world example.
West Kentucky Rural Electric Cooperative Corporation (WKRECC) was processing hundreds of invoices per month, by hand. Staff spent hours keying in data, tracking down approvals, and preparing for compliance reporting. Bottlenecks were routine. Late payments were frequent. And nobody had real-time visibility into financial obligations.
Then came a change.
Working with Mosaic, WKRECC implemented a customized AP automation solution that integrated directly with their ERP system. The results were immediate:
- They saved 1,000 hours annually with DocStar and IDC.
- Cost savings of $50,000 came from reduced paper usage, document storage, and legacy system retirement.
- Employee satisfaction scores improved by eliminating tedious manual tasks and enabling remote work.
- When factoring in the efficiency gains and other cost savings, the total annual benefit is estimated to be in the $100,000 range—a strong ROI.
“We live in a mobile world. With DocStar, it’s easy to keep processes moving when staff are out of the office, and still do things right,” said Erin Elliott, Accounting Manager at WKRECC.
See the full case study here.
Addressing Common Points of Resistance
So why haven’t all utilities jumped on board with AP automation?
- “We’ve always done it this way.”
It’s the most common phrase we hear. But familiarity isn’t the same as efficiency. Automation isn’t about eliminating jobs, it’s about empowering your team to do better work.
- “It sounds complicated.”
Modern AP automation platforms like Mosaic’s are designed to work with your existing systems, not replace them. You don’t need to rip out your ERP or rebuild from scratch. Implementation is straightforward and scalable for utilities of any size.
- “Our team is worried about losing their roles.”
Automation doesn’t replace your people. It replaces the tedious parts of their jobs. Staff can be retrained in data analytics, vendor management, or compliance, skills that drive long-term value.
Strategic Benefits Beyond Cost Savings
Yes, AP automation slashes costs, but that’s just the beginning. For utility companies navigating complex vendor ecosystems, regulatory demands, and tight budgets, automation creates strategic advantages that ripple across departments.
1. Accurate, Real-Time Cash Flow Forecasting
When your invoices are buried in file folders or scattered across email chains, it’s nearly impossible to get a clear picture of your financial obligations. With automation, every invoice is visible, from intake to approval, in one central platform. That means your finance team can:
- Make smarter decisions about when to pay
- Predict cash needs with confidence
- Eliminate guesswork from budget planning
For deeper insight into how digital POs support spending control, check out our post on The Role of Digital Purchase Order Systems in Controlling Utility Company Spending.
2. Stronger Vendor Relationships
Vendors want consistency. Late payments erode trust and can result in strained relationships or higher costs. With AP automation, approvals happen faster and payments are more predictable. This:
- Positions your utility as a reliable partner
- Opens the door for better pricing or terms
- Reduces the volume of vendor inquiry emails clogging up your AP inbox
3. Audit & Compliance Peace of Mind
Utilities face intense scrutiny from regulatory bodies. Manual processes increase the risk of lost documents, inconsistent records, and errors that can cost you during an audit. Automation changes that dynamic by:
- Creating a secure, searchable digital archive of every invoice, approval, and payment
- Ensuring full traceability and compliance with internal controls and external requirements
- Reducing the time and stress spent on audit preparation
4. Empowered, Future-Ready Finance Teams
Freeing your AP team from data entry and manual routing allows them to level up. With automation in place, staff can focus on:
- Strategic analysis and reporting
- Vendor performance metrics
- Optimizing spend and working capital
Final Thoughts
Manual AP processing might feel like business as usual, but in utilities, it quietly erodes your efficiency, compliance posture, and bottom line. Automation doesn’t just reduce costs; it reclaims your team’s time, strengthens financial oversight, and sets the stage for true digital transformation.
Ready to modernize your AP workflows? Mosaic helps utilities like yours streamline invoice management, boost visibility, and take control of back-office operations. Schedule a consultation or explore our AP automation success stories today.
