Automation That Takes Accounts Payable to the Next Level
The advancement of technology, evolution of innovation, and major market shifts altogether, are adding true value to back-office functions. One function that must be transformed is the accounts payable department processes.
Transforming the AP department can deliver both strategic and bottom-line value. Certainly, AP transformation revolves around a distinct wave of challenges force AP staff to:
- Reduce invoice processing costs
- Improve visibility into the data associated with invoices related to suppliers and vendors
- Improve the way that information is gathered and analyzed to effectively boost the strategic value of the AP function
As organizations transform the AP from tactical to strategic, there are two key problems to be addressed: archaic processes that require managing invoices manually and a lack of visibility that arises as a result of processing invoices manually.
Problem 1: Archaic Processes
Certainly, there are some back-office operations that run in the same old-fashioned methods that they have been for years and years. AP functions that are managed through paper will disrupt cost reduction and cash management efforts.
Problem 2: Visibility
While businesses want to gain visibility, it is difficult to gain real-time insights and on-demand intelligence. Businesses have reporting and analytics gaps that prevent teams from reaching new challenges and increasing the speed of business. Data held in invoices will not only help short-term forecasts, but key stakeholders can also leverage the data for long-term planning, forecasting, and budgeting. It is believed that most organizations do not leverage their data to better understand the impact it has on the current processes.
The other problem that the AP department face is the way invoice data is collected, stored, analyzed and to benefit from the improved control and reporting capabilities.
Automation to Boost Efficiency
AP departments try to handle their own critical problems, but automation can help improve the overall efficiency while also adding value to the entire organization. For most enterprises that want to transform their accounts payable functions, automation will enhance critical operations including:
- Automating the process of receiving invoices, collecting data, and processing them without human intervention which can help move businesses AP operations from archaic processes.
- Reducing the time that AP departments take to respond to supplier inquiries, with regards to invoice status, thus freeing staff time to focus on more important, value-added activities
- Eliminate invoice exceptions
- Minimize invoice approval times, helping to foster better relationships with key suppliers
With automation, businesses can benefit from a huge improvement in invoice and financial visibility, thus adding true strategic value to the accounts payable department.
Businesses have to realize the real value of AP operations. Through emphasizing the value and intelligence it can bring to back-office operations, businesses can transform their AP department in the following ways:
Critical Focus on Strategic Improvement
Besides cost reductions, AP departments can benefit from increased visibility from the new automated system.
Data from invoices and payments can be turned into intelligence used to align needs of the procurement functions. From cashflow management to supplier management, AP visibility is important for key all stakeholders.
Outline a Plan
Develop a plan for the accounts payable department to make it a strategic partner for key stakeholders and other business operations. Besides the impact of reduced invoice-processing costs, AP departments can deliver long-term value such as improved vendor relationships, added intelligence to help supplier negotiations, and a huge improvement in AP staff productivity.
Author Bio : Marissa Levin is a marketing consultant, freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP, and Cloud/SaaS trends