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 processes. 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 Accounts Payable’s pandemic game-changers”, advisory firm Ardent Partners declares in its report on the State of ePayables 2020. “For the Accounts Payable 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 accounts payable automation
Accounts Payable invoice automation serves two crucial 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 payment process system provides to businesses; 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 business delay moving instead of running forward? Two considerations come to mind. First, the cost of new technology has become less prohibitive with time. What used to be completely unattainable for a business (especially smaller ones) from a cost perspective is now possible thanks to cloud-based and scalable options. While this introduces new considerations for some it means that those smaller businesses can now compete with larger organizations on global level.
The cost factor is not limited to the price of new technology. A cloud-based automated accounts payable process eliminates the need for either increased physical space both for machines or document storage. No additional buildings, no filing cabinets, no security or insurance worries. In addition, 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. Technology-based issues obviously require a physical modification but equally important, they often require a mental (business mindset) adjustment as well. Each of these requires investigation and careful planning. In other words, strategies.
Accounts payable strategies
Strategies are a basis for change. That said, 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 Accounts Payable operations with the CFO and its team to ensure liquidity. Having everybody on the same page and timely insights from business-to-business 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, as this has a direct effect on the steps involved in how and when suppliers are paid.
- Develop short-term workarounds to fill gaps in the core invoice process 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. Having these workarounds ready in advance – just in case – is a clear advantage should the need arise.
- 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. Accounts payable 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 accounts payable team. Talent is a company’s top competitive advantage because investing in good and skilled people means better weathering a storm. In addition, a company that treats their employees well means a better retention rate in a competitive environment, an easier ability to attract additional talent, and improved company morale that benefits the entire workplace.
- Push the department to become more forward-thinking and long-term in both their thoughts and actions. Accounts payable business teams need to actively spread the news that they are a truly critical function for the enterprise (and why).
- 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 and management 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 a need to spend time to 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, know what happens with each lot or batch during each step. 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 Accounts Payable 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 tracking additional money owed and 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 any process 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.
- Receive 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 for any business to get started with a successful plan of action to strategically begin 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? Watch our On-Demand Webinar presented by Yooz and Ardent Today!