Every crisis is an opportunity to rethink your business, upgrade any product or service, and reinvent your processes. The current pandemic, now heading into its third year, is no exception. AP departments and finance leaders experienced first-hand the sudden and unexpected serious disruptions stemming from frayed supply chains, work-from-home mandates, and backlogs in invoice processing. As a result, organizations still using mostly manual processes saw their competitive resilience and cash flow suffer. This in turn resulted in unnecessary delays throughout the entire invoice process from procure to pay.
The significance of the impact was clear when, in market researcher Ardent Partners surveyed finance leaders in “The State of ePayables”, two-thirds said that COVID’s impact on their business in 2021 was “extraordinary” or “significant”.
Now, companies have a chance to overcome this and become an AP top performer if they embrace accounts payable automation. Completely automating your processes from purchase to payment with a dedicated platform empowers organizations of any size to create the most efficient, effective, and agile workflow end-to-end.
Purchase-to-Pay Automation is the “New Normal”
This type of smart, secure, and scalable AP automation from purchase to payment is hitting a nerve with businesses, as surveys show. As organizations move into the new normal, their top priorities for 2022 have changed. They are:
- Securing and optimizing new operation methods, including boosting cybersecurity
- Recruiting and retaining top qualified talent
- Accelerating the digital transformation of their operations
Finance teams want better ways to get and provide information as well as collaborate with others. And they need better tools to get reliable, real-time data to help with decision-making.
It’s High Time to Automate the Entire AP Process
The best alternative to shuffling paper and wading through spreadsheets is straight-through processing that runs in the cloud. This level of automation provides enhanced accuracy, improved security, a unified interface that keeps all relevant invoices and related documents in one place. Visibility over every step of the process is dramatically increased and easily accessible, plus you’ll benefit from a scalable architecture that changes according to your organization’s needs.
From Purchase Order to Payment in Five Step
Unlike those still using manual processes, businesses that weathered the pandemic best were able to keep operations running without having to be physically present in the office. Their AP departments maintained complete control over the entire process without even leaving their homes. Digital tools and an automated workflow from procurement to payment allowed them to quickly adapt to the "new normal."
How to Get There?
An intelligent, automated purchase-to-pay workflow – one that keeps manual or repetitive tasks to the bare minimum – is a touchless, five-step journey. It begins with a system that lets a company create and approve purchase requests or purchase orders for all its suppliers or vendors.
Step 1: CaptureThis is how the information first enters the workflow and consequently the first step. A platform will typically perform this task using optical character recognition (OCR), performing multi-channel capture of invoices regardless of their format. Submissions can occur via email, electronic data interchange (EDI), through a mobile device, file transfer protocol (FTP) upload, or even fax. All relevant data is extracted in seconds without any human intervention.
Step 2: Verification An advanced OCR system will automatically GL-code invoices and match them with the correct purchase order. This way errors, missing data, duplications, and other fraud attempts will be caught early in the process. Problematic invoices will be escalated and routed to the correct person according to preset guidelines, such as when banking information doesn’t match, or the items received differ from what was in the original purchase requisition.
Step 3: Approval Using a smart workflow gives a business flexibility in setting up and refining approval rules and processes. A cloud-based platform makes it easy for the AP group to see all the invoices in one place at any time, including on their mobile devices. This allows for maximum efficiency (especially in a global environment). Key suppliers might get preferential treatment, as well invoices that exceed a certain threshold.
Step 4: Payment Setting up the payment process can be equally seamless and painless. Thanks to software such as the YoozPay module, suppliers can be onboarded with a single email address and are then easily able to pick their preferred payment method. The AP team will then only need to select the invoices to pay, the specific amounts, and the payment schedule. A platform will handle all the rest, sending out the electronic payments and in the case of Yooz, ensuring confirmation of receipt for all involved parties.
Step 5: Exporting At all stages (but especially the end), data is exported in real-time to an organization’s financial software or Enterprise Resource Planning (ERP) software. Yooz, for instance, connects to more than 250 of the most popular solutions to ensure a seamless flow of information (more are being added every week!).
Becoming a Top Performer: Three Benefits of an Automated Purchase-to-Pay
Best-in-class businesses already have most pieces of the ideal purchase-to-pay workflow in place, allowing them to see 80% in cost reductions per invoice processed and cycle times measured in days or even hours. They can teach the rest of us three things done by AP top performers.
1) Unleash Creativity and Innovation in Your Workforce
Taking repetitive, manual tasks off your desk does more than reduce stress from handling envelopes, faxes, and keying in data. It frees the AP team’s hands and heads to focus on tasks where they can truly add value. Not only will employees feel an increased importance for themselves and in their roles, which CFO and CEO wouldn’t love to see a traditional cost center become a value driver?
According to a recent survey by the Institute of Finance and Management (IOFM), almost half of all AP departments said their top priority for 2022 is increasing staff productivity. Creativity is a key performance booster, shown to increase workplace satisfaction, which in turn is key for attracting top talent to make digital transformation happen.
2) Create an Anytime, Anywhere Real-Time AP Process
Bright minds that can wrangle data and turn invoices and purchase orders into financial intelligence are a valuable asset. However, they need a way – such as a powerful platform– to achieve that goal.
According to Ardent Partners, half of all finance leaders think that deeper, more agile analytics are a “game-changer” for accounts payable automation. Two in three wish for smarter systems or a platform that allows them to make better data-driven and strategic decisions.
When you extract all relevant information from each invoice, your organization builds a valuable collection of real-time data to drill down into any contract, supplier relationships, buyer spending, and cash flow. Not to mention that everything from procurement, invoices, and purchase orders to payments are archived and readily searchable as a secure electronic audit trail. You'll instantly know everything about your entire process, including what you spend and where.
3) Automation Goes Beyond Digital Transformation
If there’s one key take-away from Ardent’s research, it’s this: the future of the finance function is based on technology, comprising a bundle of advanced functionalities such as e-invoicing, electronic payments, and end-to-end automation powered by ever-evolving AI.
Little wonder then that AP top performers are already using e-invoicing twice as often as their peers. Among that group, more than half of all invoices were already received electronically. It’s a growing trend, driven by companies that urgently want to get rid of paper invoices and the pains and errors that come with them.
Taking the Lead with Purchase-to-Pay Automation
The reality is that the days of mailing paper invoices are coming to an end, even for government purposes. In fact, many countries have already established tax laws that will require electronic paper trails for audit and compliance purposes. Despite this, when Yooz polled finance leaders as part of the Yooz State of Automation in Finance research, they told us that only one in five have adopted a fully automated process.
Even though close to two-thirds of B2B payments were made electronically in 2021, Ardent points out that finance leaders’ biggest challenges still are manual B2B payments and late supplier payments.
That’s why creating a paperless, touchless, and fully automated purchase to payment process now is so important. A business that chooses powerful, scalable, and easy-to-use AP automation is on its way to become an AP top performer in 2022.