Every crisis has a silver lining, even in the case of a global pandemic. For businesses that means an opportunity - indeed, a necessity for most - to update their existing structure and workflows. For many this means a more rapid transition to digitalization. In the case of accounts payable, an accelerated drive to become more efficient and smarter. That's where accounts payable automation takes center stage.
“Efficiency and intelligence are AP’s pandemic game-changers”, advisory firm Ardent Partners declares in its report on the State of ePayables 2020. “For the AP industry, the ‘age of intelligence’ means that global businesses will be able to draw actionable knowledge from the invoice, payment, and supplier data that resides within ePayables systems and make smarter decisions.”
The Importance of AP Automation
AP automation serves two important tasks. First, it drives operational efficiencies by doing away with costly and time-consuming manual processes which in turn reduces the opportunity for errors and fraud as well as significantly speeds up the entire invoice cycle times (which makes any business and their vendors happy!). Even better, going digital from a manual invoice process yields nearly immediate performance gains, and truly smart technologies such as machine learning or AI “provide next-level value beyond the eradication of paper”, according to Ardent.
However, there's an additional service that an automated invoice system provides to organizations; harness the true power of an end-to-end system and you have access to deeper analytical capabilities than any of your non-automated peers. This at-your-fingertips accessible, real-time, and more accurate data takes reporting and analysis to an entirely new level.
The CFO and other managers across the entire business have a big picture view relevant for topics such as liquidity and cash management, payment processes, vendor management, fraud, and compliance control. This advanced information establishes a baseline for and supports more accurate long-term decision-making.
With such clearly achievable benefits why would any organization delay moving instead of running forward? Two considerations come to mind. First, the cost of new technology has become less prohibitive with time. This is no longer the case. What used to be completely unattainable for a business (especially smaller ones) is now possible thanks to cloud-based and scalable options.
A cloud-based system eliminates the need for either increased physical space both for machines or document storage. No extra accounting bodies will be needed for manual processing and certainly none for chasing down lost documents or required signatures.
The second consideration is a little more complex. Moving forward on technology-based issues that require a physical and even a mental (mindset) modification requires investigation and careful planning. In other words, strategies.
Accounts Payable Strategies
Strategies are the basis for change. If you believe Ardent's claim that “In the face of extraordinary times and a challenging business climate, Accounts Payable groups have the opportunity to drive tremendous value and help the greater enterprise navigate these tough times” then rest assured, several of the recommendations they list will help to map a path back to an improved normalcy. Let’s take a closer look at them.
- Align the AP operations with the CFO and its team to ensure liquidity. Timely insights from B2B payments are more valuable than ever when liquidity and cash management are king.
- Understand and react to changes in business and supplier direction. It matters to know why the markets shift, particularly the steps involved in how and when suppliers are paid.
- Develop short-term workarounds to fill gaps in the core invoice processing cycle. Not working on-site should be no reason for delays in checking information, processing invoices, getting approvals, and making payments. All of these can be handled remotely, even from a smartphone.
- Accelerate digitalization efforts. Digital transformation deserves funding because it leads to reduced costs, shorter cycle times, improved visibility, and control.
- Expand all cash management tactics and processes. Accounting plays a key role in knowing where your money is going and helps to regulate the flow of payments and the cadence of key payment activities.
- Invest in and develop an agile accounting team. Talent is a company’s top competitive advantage because investing in good and skilled people means better weathering a storm.
- Push the department to become more forward-thinking and long-term in both their thoughts and actions. Accounting teams need to actively spread the news that they are a truly critical function for the enterprise.
- Collaborate with other key stakeholders to close operational and strategic gaps. It’s about working together with internal and external partners to empower them with data and knowledge culled from the invoice cycle processes.
- Maintain and build company expertise. Address gaps in knowledge or expertise to ensure the Accounts Payable function stays highly productive and relevant.
- Develop more robust data and intelligence capabilities. Information from invoice and payment processing is extremely valuable, so review and refine how you collect, track, analyze, and present your financial observations.
Revamp disaster recovery and continuity plans. As the return to a “new normal” is fluid and uncertain, finance leaders should use the learnings from the current disruption to prepare for future turmoil.
“In this new decade, AP groups will increasingly transform their operations into hubs of visibility and intelligence”, Ardent concludes. And that transformation “can positively impact financial operations and performance”.
Implement Your Automation Strategies
The saying that knowledge is power holds true but in fact knowledge without action won't get the desired results. Once a business realizes the possible benefits they can achieve through new technology, once they understand a blueprint that will help them move forward, they still need to take action. That means researching and selecting an implementation partner who can create a customized system that will address business needs from start to finish. While this is a separate subject on its own a few things to keep in mind include:
- Know the features that you both require and desire. Best practices dictate that a company plan and do requirements gathering in order to know what they need from a software provider. Document your current day-to-day process from invoice receipt all the way through payment. This will help identify and set your software requirements - the things that you absolutely need any system to do for you.
- Look for a solution that incorporates those requirements, one with the critical features that you need and which can be customized to include other features you identify now or in the future. Just as organizations are different not all software platforms are the same.
- Identify solutions that offer true, complete cycle automation. This is not always the case and while certainly some is better than doing nothing there is no replacement for a comprehensive workflow. For example, some solutions merely offer outsourced centers which still code your invoices manually. You'll think that you've removed a headache but instead you'll have duplicated your originally system. Instead of saving money you've merely generated another bill to pay.
Keep in mind that while AP automation covers several if not most of the strategies suggested by Ardent Partners, others are ways in which you can start to change the mindset of your business. This will help to ease change, improve moral, and most likely also result in a visible return.
Why Choose Yooz
Yooz is an end-to-end, cloud-based platform that uses the most advanced technologies to automate your entire invoice and payment process from purchase order to payment. This enables your accounting department to:
- Manage vendor relationships with on-time and early payments. Aside from the obvious benefit of improving relationships, this also ensures a reduction in any fees incurred from late payments while taking advantage of on-time or early payment discounts.
- Create dynamic workflows that allow for a flexibility in the invoice and payment process. Yooz is a scalable platform, able to grow with your business and adjust to planned or unexpected needs.
- Work seamlessly from anywhere at any time from any device. All that is required is an internet connection. This is especially important as the modern workplace structure has gone through upheaval and restructuring.
- Gain real-time insights into where your money is going and your business’ cash flow with extensive reporting and tracking. The Yooz platform has been recognized for its powerful reporting capabilities and the Yooz dashboard is fully customizable. This puts insights right at your fingertips.
- Reduce the risk of fraud and opportunity for errors while automatically meeting regulatory and tax compliance standards in the most secure cloud-based invoice and payment processing solution.
- And so much more!
With all this now is a perfect time to get started with a successful plan of action to strategically move into or move further into the digital age.
Curious to learn more about ePayables trends and successful strategies to improve your entire Accounts Payable and invoice processing workflow?