Even in 2019, too many organisations have Accounts Payable departments that are slowed down or held back by inefficient, disjointed manual processes. Invoices remain hard to track and hard to tally against purchase orders, and opportunities to take advantage of suppliers’ early payment discounts, and to manage cash flow more effectively, are being lost. Meanwhile, AP teams are so caught up in reconciling documents that any thought to providing a deeper analysis of spending, or to making a more strategic contribution to the business, is inevitably shelved.
In fact, it’s never been easier to transform Accounts Payable, boosting efficiency and unlocking new business value through accounts payable software.
Yet, in this digital-first era, the potential to transform and invest in Accounts Payable software is considerable –and relatively straightforward to achieve. Accounts Payable software is now so intelligent, intuitive and easy to deploy, it makes no sense to make life harder than it needs to be for AP teams.
Carpe diem! Use Accounts payable software for more efficiency
It is now possible to capture and manage rich account and invoice detail from all sorts of document formats and pull this straight into core business systems – e.g. ERP systems – where it can be more readily combined with other records, tracked, called up or searched for specific information.
As well as enabling rapid response to management or supplier queries, Accounts Payable software paves the way for smart, rules-driven workflow and routine process automation. As well as ensuring that all invoices are paid in good time, the business will be better able to balance the books, and benefit from timely and complete information that can help steer better spending decisions.
With a new year unfolding, and new commitments to delivering improved efficiency, here are 4 challenges organisations should tackle head on in 2019, by bringing your Accounts Payable department digitally up to date.
1. Process inefficiency - mistakes, mislaid items and broken paper trails
Unless purchase orders and invoices are captured, stored and processed in a consistent, structured way, linked to related accounts, and tracked from end to end, AP teams will continue to spend inordinate amounts of time manually handling documents and trying to reconcile them with each other and with supplier accounts. As well as being slow and expensive (in people’s time), not using Accounts Payable software can result in items and payments slipping through the net, and/or mistakes being made, causing upset to suppliers, to cash flow, and to management reporting.
Introducing digital consistency to the capture, indexing, storage and processing of documents – even if these come into the business by different means and in differing formats – can alleviate all of these issues. Capturing and processing purchase order and invoice documents and information digitally with accounts payable software makes it much easier to call up and tally records, make timely payments, address queries, fulfil reporting and keep on top of everything in peak periods.
Research by Aberdeen Group suggests that Accounts Payable software can reduce invoice processing workloads by 49%, and enable higher as well as faster throughput. Indeed, it is 63% more likely that invoices will move straight through processing when received, validated and approved in an automated manner. A reduction in outstanding payments (by 18% is typical) reduces the likelihood of interest being added to invoiced amounts, while keeping valued suppliers on side.
2. The risk of non-compliance without Accounts Payable software
Today, financial regulators and auditors expect not only complete traceability of all of a company’s transactions, but also irrefutable proof that nothing has been omitted or tampered with. Disjointed or highly manual processes cannot fulfil these requirements; they can also create a lot of additional work – for example in the run-up to reporting, or in response to an audit or compliance inquiry.
An intelligent, automated workflow-enabled AP function can be confident that strong legal and fiscal compliance measures are inherent in their systems, allowing them to demonstrate compliance and respond to queries on demand.
3. Restricted business visibility and agility
Without Accounts Payable software and as long as AP records and processes are tied to old norms, and content is copied manually from one source to another, the scope for operational progress and improved financial/account transparency across the business will remain limited.
In an ideal world, colleagues including purchasing and senior managers should be able to securely look up an account’s status, or the evolving cash flow situation, on demand from wherever they are – to allow them to move forward with decisions, this is achievable with Accounts Payable software
But if some of that information is buried within a mix of paper, spreadsheets and email attachments, it becomes impossible to consolidate and access the detail needed to reliably inform decisions. To turn this situation around, organisations need to be able to extract and integrate information from the various different sources to build up a clear and comprehensive of an account, and of overall AP activity, without this becoming a long, drawn-out manual exercise for someone.
4. The prospect of remaining in a ‘cost centre’ role
In competitive markets, no business can afford to run admin-heavy functions which don’t contribute something additional to the organisation, i.e. beyond their immediate remit. If Accounts Payable team members are caught up with manual data re-entry and performing detailed checks, they can lose sight of their organisation’s broader finances. Their time will be tied up, and in any case they won’t have the clear line of sight needed to spot issues or identify opportunities for improvements.
As Accounts Payable software will streamline routine activities, and enable higher speed and accuracy, AP teams will gain an opportunity to provide new forms of help to the business – such as insights into problem accounts, spending anomalies or potential scope for savings. Creating more time and scope for this kind of work can also make the job more interesting for AP teams.
In the digital age, where business cycles are shortening and efficiency is a fundamental expectation, Accounts Payable software offers huge potential for operational improvement. Beyond cash flow benefits, this is about optimising resources, streamlining regulatory compliance, and elevating the role of AP to that of a proactive advisor to the business.