Digital transformation is the novel use of digital technology to solve traditional problems in your industry's accounting area. These digital solutions enable inherently new types of innovation and creativity, rather than simply enhance and support traditional methods. But there are a few things you need to have known before your company will see the positive impact and opportunities that raise the industry's standards. You'll need to set a fool proof strategy, know who to appoint the tasks to, and thoroughly understand why finance and digital transformation are the gateways for new opportunities.
Why are Finance and Digital Transformation Essential for Your Accounts Payable Department?
The automation of finance and accounting workflows are synergistic with digital transformation. Consistent with digital transformation, AP automation utilizes digital technology—advanced solutions leverage A.I. and smart data extraction—to free AP staff from the tedious, repetitive tasks of manual invoice and payment processes. These tools enable them to focus on creative and strategic work, adding more value to the organization.
In a recent interview regarding how AP automation is changing, and will expect to change in the future, Mark Brousseau, Institute of Finance Management (IOFM) spokesperson, consultant, and AP automation subject matter expert, responded, “It will be unrecognizable! Digital, data driven, and strategic. Stakeholders will unlock the value of AP automation and leverage it in more ways than ever”. Further, “CFOs will believe that if they optimize the AP process, they can better manage cash, control spend, and mitigate risk. All helping drive larger corporate objectives”.
While digital transformation—in this case, AP automation—results in positive impacts on many different levels to an organization, such as financial gains and increased productivity, it can affect other areas as well, such as culture. A change in business process requires cultural change acceptance so that the transforming organization can successfully shift. Cultural change can place people outside of their comfort zone leading to an overall fear of change and resulting in a shift in mindset from contentment to uncertainty. Concerns and questions arise, such as “This is how we have always processed invoices”, or, “What will happen to my job if we automate?”.
That is why CFOs and other finance leaders in the company must get together to come up with a solid finance strategy. The finance strategy is the foundation of finance transformation and focuses on restructuring the finance function to align with the company's goals and make executing finance transformation less troublesome. These strategies should not only address the incorporation of digital transformation, but real concerns that arise within organization's internal network.
So, how does a CFO successfully navigate organizational change from finance and digital transformation?
Is the CFO the Only One Involved in Implementing and Creating a Pleasant Finance and Digital Transformation Experience?
Today’s CFO plays a significant role in successfully managing both the process and the cultural changes that come with digital transformation. But in the case of implementing AP automation, many CFOs are passing off the responsibility of automating the AP process to a controller, finance manager, or accountant. That staff member is tasked with defining the project, vetting providers, and choosing a solution that best fits the organization's goal of developing a more productive and efficient accounts payable workflow and cut costs.
It’s an enormous pressure to have the task of revamping the company’s entire AP process on one’s shoulders. That's why more and more CFOs are handing off the implementation portion because of their busy schedule pulling them in different directions. So sometimes the only direction the CFO is able to give them is “does the solution work” and “does it fit our budget?”.
In this situation, a decision might be made to just table the project because the person responsible is reluctant to move forward with the wrong decision. Or the longer the process takes, the more time there is for doubt and fear of automation to outweigh the positive benefits that have been proven time and again.
In fact, when asked in a recent interview how AP automation is changing, and will expect to change in the future, Mark Brousseau, Institute of Finance Management (IOFM) spokesperson, consultant, and AP automation subject matter expert, responded, “CFOs will believe that if they optimize the AP process, they can better manage cash, control spend, and mitigate risk. All helping drive larger corporate objectives”. This will put the CFO actively into the vetting and decision process (before), the implementation and training stage (during), and capitalizing on the benefits of automating (after). (S)he can also help mitigate the fears that come along with this type of change, considering both process and cultural shifts.
CFOs Driving Digital Transformation
When the CFO is driving the digital transformation, they can then reassign work that is strategic and value-added to existing staff, and staff members will be free to explore creative solutions to workflow challenges.
In the face of this type of change, it doesn’t have to be scary, rather should be exciting! Imagine a scenario where, instead of continuing to ask, “How do we manage this ever-growing pile of invoices?” finance leaders will ask, “Where do we stand with working capital so we can more accurately forecast cash and manage budgets?” Further, “How do we better manage our supply chain?” Best of all, “What do we do with the cash that has been freed up?”.
Digital finance will redirect the focus from worrying about accounts payable efficiency to brainstorming and reviewing your financial status for the above scenario's questions. Being able to label and keep track of each transaction will be easier for finance leaders with finance technology from the influence of digital transformation. Now, CFOs will be able to improve how they approach leadership and the finance and accounting department's pain points because of the accurate overview that digital finance offers.
Are Digital and Finance Transformation Really Creating New Opportunities and Accelerating Growth for Organizations?
Finance transformation affects all aspects of businesses' financial services making its impact hard to miss. And with many moving parts, collecting data before, during, and after implementation will help finance leaders gain a better understanding of how finance technology is affecting the company and its financial services.
One of these financial services is the accounts payable function that is typically handled by a designated team within accounting. The AP team is responsible for everyday accounts payable assignments like invoice processing, vendor relationships, and payments. Although these functions seem straightforward, the AP workflow isn't as linear as it sounds. Manually distributing hundreds of paper invoices and documents each day starts to create inefficiencies and decrease productivity for all touch points.
This issue is being eliminated by the AP automation system. Accounts payable automation is a system that is made up of newer technologies artificial intelligence (AI), RPA, machine learning, and OCR that make streamlining the nonlinear invoicing process obtainable. The less information that is handled through a manual AP process, the more time employees on the AP team can focus their attention on value-added tasks that contribute to the company's success and opportunities for growth.
The digital experience doesn't just free up the AP team's time, but cuts costs. The average cost of manually processing an invoice is $9.40 to $20.80 but businesses who use an AP platform can process an invoice for as little as $2.22. Your company will no longer have to deal with extra costs from late fees so you can use that money to contribute elsewhere.
How Do You Know Where To Start?
Start your finance and digital transformation with the leading AP Automation solution on the market, Yooz. Our platform is tool that empowers everyday accounting and finance teams convert their manual, time consuming process to a digital, reliable AP system. Yooz is equipped to handle all networks in any industry. Our AP platform keeps all information secure in the cloud and cuts down lengthy cycle time because AP managers can approve invoices on the go. And because you're not losing documents or mailing invoices, the Yooz experience can reduce processing cost by 80 percent. You can learn more about Yooz's intelligent AP platform by speaking with one of our expert account executive specialists today!
It's clear, trading your manual accounts payable workflow for a workflow powered by digital technology provides ample opportunity to better your company and finance department, and increase cashflow. These benefits outweigh risks like battles with cultural change and large amounts of time CFOs and their teams spend on implementing finance and digital transformation.
Article written by Yooz team member Anthony R.