Saying that 2022 was a challenging year for many businesses should be considered an understatement. Few could have predicted how the global economy would change this year between shutdowns and various economic stimuli implemented by many countries. This has resulted in tumultuous market conditions thus far where uncertainty is the only certainty.
What does this mean for CFOs making plans for 2023? Finance, as ubiquitous as it has been for the last 50 years, has seen a tremendous transformation in the last decade. This year alone has seen some changes to finance as a function, with a rapidly growing demand for digital transformation and optimisation in finance teams worldwide. This has been especially true for Accounts Payable (AP) Workflows.
Digitalising their financial processes remains a top priority for many CEOs and CFOs, As a result, financial leaders look to make smart choices when streamlining operations with constant changes. For many, the accounts payable function remains a crucial area to start with.
Today’s finance leaders are seeking to consolidate multiple functions into one platform to increase efficiency and maximise their return on investment (ROI). These same finance leaders are looking to optimise in heavily manual areas like vendor management, invoicing, and Bulk billing Management.
Companies are becoming savvy in digital transformation, increasing leveraging data science to improve their accounts payable. Use cases like cost allocation can remove redundant manual invoicing systems by automatically coding supplier invoices using complex suggestions and historical patterns for cost allocation, freeing up staff for more value-added tasks.
According to a study, 71% of businesses are already planning to automate their accounts payable function this year alone. Because finance teams no longer operate under a single roof, automation makes it easier to stay aligned through digital workflows combined with AI that can drastically reduce the time and increase accuracy.
Essentially, Finance teams are always busy. Whether its managing subscriptions, maintaining invoice records or processing vendor payments, Finance teams over-reliant on manual or paper based processes lose a lot of time churning through repetitive and mundane, yet essential tasks. The result? An inefficient use of your resources. Automating payables is one of the best ways to overcome this inefficiency by helping you reduce a few things:
The first challenge automation helps overcome is decreasing manual tasks and labour costs. Manual tasks are some of the biggest contributors to high AP processing costs. Human touches can come in the form of downloading attachments, scanning documents, manually keying in data, searching for lost invoices, reconciling supplier and purchase order information, manually-coding invoice information and more.
Among other things, automated AP processes mean you are extracting invoice data, classifying documents, matching invoices with purchase orders and receipts, and posting and archiving invoices – all quickly, automatically, and with benefits like great labour cost savings.
By automating portions of the AP process, businesses will be able to get a clear picture of their cash flow without manually creating reports and sorting data. CFOs will be able to quickly see their current cash balance, where they’re spending the most, and when payments are most likely to be processed.
This will provide businesses with a crystal-clear picture of cash flow — both now and in the future — which will allow companies to create more accurate plans for growth.
No matter how skilled or meticulous the best finance teams are, processing errors are almost always borne as a result of human error. Whether it’s a duplicate payment, or transposing numbers while hand-coding, they all contribute to the hidden costs of manual payables processing.
By automating your payables, you can reduce these errors, as invoices can be processed without manual keying, and validated against ERP information early in the payables process, quickly calling out duplicate or erroneous entries.
In today’s age, investing in potential solutions should not just be about lowering costs, but making gains too. Beyond just removing barriers, and reducing resource requirements, automating payables can help you create new value by optimising your workflows and processes.
No matter how successful a company is, accessible short-term working capital is essential. Paying salaries, buying supplies and inventory, and managing the day-to-day operations require access to cash, not accounts receivables. CFOs and Finance Teams have to proactively monitor potential cash flow bottlenecks and shortages, or risk finding themselves scrounging the office furniture for spare change to pay their vendors.
Automating your Accounts Payable helps you keep detailed logs at all times, and helps you monitor which bills need to be paid right away and which expenses can be reduced. By extension, this allows you to dictate your payment schedules depending on your relationships with certain vendors, providing your treasury some flexibility in your cashflow.
CFOs would want to know where every cent in their capital is at a given time. They want to keep track of every obligation owed, and, as mentioned above, are increasingly relying on analytics that rely on complete, accurate data.
Unfortunately, paper invoices, receipts and bills get lost all the time. Automating your payables workflows with an automation platform will help you save time and effort that could be channelled into other vital aspects of your business.
An automated payables process offers CFOs full access to the payment cycle at any time of the month, not just during reconciliation or month-end periods. Anyone who has permission can learn the status of an invoice at a glance. Since you can monitor progress in your workflow, it’s easy to pinpoint delays and get answers from your team.
Switching between different portals and applications to keep track of your financial health is troublesome at best. In worst case scenarios, errors and inaccuracies can be introduced to your data when manually being transferred from one system to another. Automating your Accounts Payable will help you seamlessly integrate with all your major financial systems, databases, and ERP systems.
By maximising accounts payable benefits through the use of smart technology, CFOs stand to improve efficiency without needing to swap out existing systems.
According to a report by the Association of Finance Professionals, 71% of companies globally were targets of payment fraud at least once in 2021. While “being a target” does not equate to “being a victim”, the risk remains high, and it is never too late to consider stricter security measures. Automating your payables can help your business safeguard against fraud by controlling which employees have access to invoice approval and the release of payments.
By automating your payables, You can build approval workflows with multiple people and increase the chances of catching fraudulent invoices before payment is processed. With such a process management system in place, no single employee serves as the only person tasked with approving payments. This not only helps reduce the chance of fraud, but it also helps you double check for missing or incorrect data.
Auditing and Compliance are often thought of as tedious endeavours, with CFOs and Finance teams often leaving such tasks to the month or year end, then having to deal with mountains of unsorted, messy and often incomplete bill, invoice and payment records.
A comprehensively automated payables system can help you with document management, which can be beneficial for auditing. The system links all documents and messages involved with each transaction, while matching invoices with purchase orders and receipts. This searchable audit trail reduces your chances of losing important paperwork. It can also help you maintain regulatory compliance for quarterly or annual filings.
By automating your accounts payable, significantly less time is required to upkeep your payables workflow. This frees up vital resources to dedicate to more critical growth strategies.
Especially in today’s tumultuous economy, efficient use of time and resources is crucial to operating a successful business. When it comes to managing your organisation’s finances, finance teams have had to deal with a significant wave of change over the last few years as automation has quickly become the gold standard for keeping accounts payable processes and workflows secure, accurate, and timely. If your organisation finds itself bogged down by manual or paper-based payables workflows, it may be time to consider automating.