Time is money. That’s true in more than one way when we look at how most companies handle their accounting and invoice payable processes. Too often, they still rely on manual processes all the way from placing a purchase to approving an invoice and then, eventually, paying it. A hand-off here, a folder circulating in the office there, perhaps a phone call dealing with a vendor there... It seems like a never-ending cycle.
Although these may seem like small steps in a well-established routine that’s been around forever, the implications of poor and insufficient accounts payable processes add up to significant and unnecessary costs. Today there is a way to avoid all this thanks to technology and modern software.
Accounts payable automation (specifically accounts payable processing software) can turn things around quickly and give the accounts payable team superpowers to speed up the process. Automating the entire workflow from purchase to payment saves them both time and money in addition to unlocking the full potential of a successful digital transformation. As the prolonged disruptions of the pandemic have demonstrated, going digital and automation belong together. They are the way forward for all businesses, regardless of their size and industry, in order to stay agile and competitive. Why?
Straight-through Processing with Accounts Payable Automation
Accounts payable processing software allows for what experts call straight-through processing, meaning an invoice is only handled by humans when it’s absolutely necessary while intelligent software does all the rest. Menial tasks are handled by software algorithms that are up and running within hours and can accurately read and understand every document, extract relevant information, check it for errors or fraud, correctly GL-code it, and then route it to the right people to approve.
If staff are working remotely or happen to be on the road? No problem. A cloud-based platform like Yooz lets them use their mobile device to give the green light for any invoice and stay in the know.
Even better, Yooz also handles the payment part through integrating with popular payment gateways or with its new YoozPay module. Simply choose the amount and a manual or automated payment schedule and an electronic payment arrives instantly in the vendor’s account. Using a virtual credit card generates cash-back as a new, recurring revenue stream. In addition, the updated status of the invoice is automatically pushed into a company’s finance or ERP system (such as with Sage or Quickbooks) and reconciled with the PO. It doesn’t get any easier.
Accounts Payable Automation Software Saves Thousands of Dollars
And it doesn’t get any more cost-efficient. Organizations that have automated their accounts payable process with Yooz cut their average processing costs per invoice by 80%. Handling an invoice that used to cost them anywhere between $9.12 and $15.89 are now costing $1.99. For an organization processing 100 invoices per month, the annual savings add up to almost $16,000.
Cycle times also dropped, so invoices are paid in a matter of days, sometimes even hours. As a result, late payments are a thing of the past and early-pay discounts have become the new norm. The accounts payable function, in short, morphs from a cost center in the back office into a significant contributor to the bottom line.
6 Benefits of Accounts Payable Automation
Lower costs and faster cycles are just two of the benefits resulting from automating the accounts payable process and going paperless. Others include:
- More agile organizations, regardless of location.
- Centralized, virtual storage. No more filing cabinets, mailing stacks of paper or checks, or searching through stacks of documents.
- A better handle on their day-to-day cash flow with real-time information.
- Accounting staff freed up from repetitive tasks, allowing them to focus on other more strategic areas.
- Improved customer relationship management thanks to instant updates in response to vendor inquiries and a faster payables process.
- Suppliers become part of a network of trust since they suddenly have full visibility into the accounts payable invoice process and progress.
All those advantages of accounts payable automation are even more important as the economy is trying to shake off the shocks of the pandemic. Thanks to automation, there won't be a repeat of closed offices (and services!), reduced workforces, working from home, and unopened letters or products, including invoices, piling up.
Embracing Change with Accounts Payable Automation Software
If 2019 and 2020 were the years of disruption, 2021 is the year of embracing change. Think of the economy as having been warned. Now companies need to plan for the post-Covid world by fleshing out and accelerating their plans for digital transformation and automation in order to stay competitive and become more productive, no matter what external disruptions may happen.
Fortunately, it's never been easier to pull this off thanks to new payable technologies and digital tools. Once these types of options and features were only available to large companies with major cash flows. Now, thanks to cloud-based options and software as a service (SaaS) payment possibility, companies of all sizes are able to easily - and quickly - transform. These technologies allow finance leaders to better handle costs, the payables process, and supplier relationships as well as better adapt to ever-changing financial regulations. And they can do so while figuring out the best way to navigate the new normal with a blend of on-site, remote or hybrid work.
In a business environment filled with so much uncertainty and change, it’s reassuring that solutions exist that allow your accounts payable team to be productive from anywhere without ever losing an invoice or missing a payment deadline.
Global Survey Reveals How Companies Embrace Accounts Payable Automation
To find out where we stand with streamlining and optimizing all things accounts payable, Yooz conducted its first global State of Automation in Finance report. In March, we surveyed more than 1,000 financial and accounting decision-makers in the US and eight other countries (UK, Ireland, France, Spain, Switzerland, Luxembourg, and Belgium). They told us about their priorities pre- and post-pandemic, their immediate challenges, and their plans for digital transformation in the months ahead.
First, there is no doubt that Covid hit businesses hard:
- Three out of four respondents told us that the pandemic accelerated digital transformation of their accounts payable process.
- Almost half saw their ability to process invoices on time significantly hampered
- Half think that recovery will take at least one year, if not longer.
As for technology adoption for accounts payable automation, there is both good and bad news:
- Two-thirds of the companies we polled spend more than one full business day every month just managing invoices. Accounts payable departments on average spend 32 hours managing vendor invoices a month.
- Only one in six have adopted fully automated invoice processing.
- A mere quarter of companies are fully prepared for electronic invoicing.
However, according to our survey, looking ahead things will change:
- One in three finance leaders told us that data security is a priority when evaluating systems for accounts payable automation.
- One in three identify the cloud and SaaS systems as their top area of investment.
- And again, one-third have made reducing accounting errors their top priority.
That’s an encouraging roadmap, but currently, too many businesses are still behind unlocking the full potential of accounts payable automation. The survey revealed three reasons for this.
3 reasons why companies hesitate to embrace accounts payable automation
First, there is too much reliance on a manual accounting payable workflow. For example, one in five organizations use spreadsheets and manual processes. While some are using data verification tools such as OCR, short for Optical Character Recognition, (19%), or EDMS, short for Electronic Document Management Solutions (19%), these stand-alone tools do not provide the cost, time, and productivity benefits of fully automated software that handles the entire lifecycle from purchase to payment. Not fully automating the accounts payable workflow from end to end carries the risk of being left behind by those companies that have.
Second, many organizations believe that switching to automation is complex (23%), time-consuming (22%), and expensive (18%). Those worries don’t hold up when compared to the time and money spent on processes currently in place. It’s worth repeating that streamlining accounts payable workflows can cut the processing time from weeks to days and slash operating costs by more than half.
Third and finally, slow accounts payable processes have trickle-down risks as they leave the entire organization in the dark about important trends in billing, invoicing, and cash flow. One in six companies are spending more than 100 hours managing vendor invoices per month, and that’s even true for one in five large enterprises with 500 employees or more.
The Roadmap to Make Accounts Payable Automation Happen
So, let’s talk about the way to move forward. As organizations increasingly come to terms with the emerging challenges of a post-Covid economy, they are picking priorities that will help to minimize any future disruption. That should include the accounts payable automation process so here's the roadmap for making a successful digital transformation:
- Assess your existing, post-COVID accounting practices
- Change to a fully automated, cloud-based platform
- Review what you have implemented for efficiency and accuracy
- Focus on investigating and reducing security and fraud risks
One in three companies told us they have accelerated their cloud strategies and plan to move into the cloud and to SaaS offerings during the next year. That will give them a couple of clear advantages. Accounts payable automation not only allows data to be captured and stored securely but also easily shared. Thanks to data visualization and ERP solutions, automation platforms support employees working remotely across the entire business. Accounts payable automation also lets you push knowledge to the edges of your organization, and finance leaders gain access to valuable real-time data.
Efficiency and accuracy are a must when you automate. Manual processing is not only slowing down how long it takes to manage, process, and validate invoices, it also leads to critical human and administrative errors throughout the entire process. In addition, it constrains a company’s ability to glean valuable insight from its financial data and restricts CFOs in their ability to support the strategic business direction.
On the other hand, when core processes are automated and controlled, finance teams can start to explore more sophisticated activities, such as investigating and reducing fraud risk, undertaking detailed cost modeling, and providing better visibility to the rest of the business. The end result is better support for the CFO and finance leaders to make strategic decisions.
Why Yooz is the Unmatched Leader in Accounts Payable Automation
The best solution to unlock all those benefits and future-proof an organization is end-to-end accounts payable automation. Yooz has an all-in-one platform that gathers relevant documents into a single workflow and processes them automatically, from extracting data to completing payment. It wins with unmatched speed.
Thanks to smart, dynamic workflows it takes hours, not days, to approve or reject purchases and invoices, as well as initiate payments. Yooz means real-time visibility and the fastest processing times with same-day invoice approval, including from mobile devices.
Finally, this speed is gained without compromising security. If anything, the software actually increases it. Yooz offers improved accounting data security and lets a business store fully compliant and fraud-free documents in the cloud. Even better, the intelligent software will automatically detect inconsistent data and preserve an audit trail for every transaction.
Post-Covid Priorities: Communicate Better and Automate the Accounts Payable Workflow
We must be onto something since the US companies that we surveyed told us their three priorities in the post-pandemic world and they are exactly why Yooz has spent the past years innovating and fine-tuning accounts payable automation.
In 2021, accounts payable teams want to communicate better with other departments, have more control over their day-to-day financial processes, and be able to embark on digital transformation. With Yooz and its dedicated customer success team, they can reach all three goals. And save plenty of time and money along the way.
Curious to hear more about how to plan for intelligent purchase-to-pay automation and get started with digital transformation? Make sure to listen to the webinar “Planning Beyond Covid-Reshape the Finance Function with Automation”