The 3 Reasons Why Private Equity Is Demanding AI in AP

Private equity (PE)-backed manufacturing companies face immense pressure to improve profitability, reduce operational costs, and scale efficiently. Traditional manual AP processes often slow progress, creating inefficiencies and impacting the bottom line.

Autonomous AP, powered by AI, is becoming essential for overcoming these challenges. OpenEnvoy’s Autonomous AP solution helps PE-backed companies automate accounts payable, eliminate inefficiencies, and rapidly boost EBITDA.

Why PE Firms Are Demanding Autonomous AP

AP operations at many PE-backed companies are often inefficient and costly. Labor is typically the only way to increase throughput, leading to higher headcount costs without addressing the root inefficiencies. Common issues such as duplicate payments and supplier fraud are crippling margins, making profitability targets harder to achieve.

Autonomous AP breaks free from this model, automating manual processes to improve throughput without increasing labor costs. It eliminates errors and fraud, directly impacting profitability, allowing companies to scale.

The 3 challenges facing PE-backed manufacturing companies

PE investors generally have 3 expectations:

1. Increase EBITDA: Rapid cost reductions and profitable growth are expected, often within quarters.
2. Optimize Headcount: Companies must cut costs and scale without adding headcount.
3. Accelerate Time to Value: Rapid system implementation and ROI are critical, especially during mergers and acquisitions.

Traditional AP processes hinder companies from meeting these demands, driving the need for AI-driven solutions to deliver immediate financial results.

1. Rapid Cost Savings and EBITDA Impact

AI-first automation from OpenEnvoy enables companies to reduce overbilling, minimize errors, and automate manual processes, delivering immediate cost savings and EBITDA improvements.

Kymera International, a specialty materials manufacturer backed by Palladium Equity Partners, implemented OpenEnvoy earlier in the year and projects a 3% boost in EBITDA within the first year.

We expect a 3% boost in EBITDA this year using OpenEnvoy."

Gabor Szentivanyi
CIO
Kymera

2. Headcount Reduction and Efficiency

OpenEnvoy empowers PE-backed companies to scale seamlessly by handling increasing transaction volumes without the need to add headcount, ensuring they maintain operational efficiency as they grow. For Kymera, repurposing staff has been a value add.

The biggest impact is the organizational maturity we’ve achieved by repurposing AP staff from manual tasks to more strategic roles."

Gabor Szentivanyi

Due to its acquisition of other companies, Raney’s, an e-commerce leader in truck parts and customer for a few years backed by Incline Equity, would have needed to triple or quadruple its AP team to manage transaction volumes using a legacy system. Thanks to OpenEnvoy, they were able to scale without adding staff.

At this point, I have no plans to add headcount because I anticipate that I can route the vast majority, if not all, of the additional transactions through OpenEnvoy."

Van Truman
VP Finance
Raney’s

3. Accelerated Time to Value

PE-backed companies require fast results from their digital transformation efforts. OpenEnvoy provides value quickly by enabling 100% AP straight-through processing within months, freeing up teams to focus on strategic tasks.

For Kymera International, whose growth strategy centered on acquisitions, it was critical to have an AP automation system that could easily and quickly integrate with multiple ERP systems across its newly acquired entities. OpenEnvoy’s seamless integration capabilities allowed Kymera to rapidly onboard each acquisition, ensuring operational efficiency without delays and helping it stay on track with its aggressive growth plan.

Kymera used OpenEnvoy to integrate AP across multiple ERPs after acquisitions. This kept operations smooth and supported their growth plan.

Raney’s automated AP for all suppliers in two months. Staff moved from manual tasks to high-value work like disputing overbilling.

We scaled touchless processing in two months, shifting our team to focus on strategic business goals."

Eric Anderson
Co-Founder
Raney’s

PE firms are increasingly mandating the use of AI in AP to accelerate cost savings, reduce headcount, and drive efficiency. OpenEnvoy’s AI-first platform delivers rapid time to value, making it the trusted choice for PE-backed companies looking to scale efficiently and boost profitability.

Discover how OpenEnvoy can transform your AP processes and drive immediate value. Talk to someone from our team to learn more.