Accounts payable will sputter without full automation
During the pandemic, some industries have experienced a boom while others struggle to reinvent themselves with new products and services. For many, the biggest challenge is to find the time to focus on strategy, something that’s harder to do with the business environment in flux and staff working remotely. As a result, finding new ways to improve efficiency has become a priority.
One area is particularly ripe for this type of transformation: accounts payable. Executives traditionally view the function as a lagging cost center, an operation relying on manual, time-consuming approaches to its work. While tasks like invoice processing are essential, they demand so much time and AP is prevented from contributing to the larger vision of the business.
As remote work becomes the norm for many AP teams, manual work becomes even more tedious – and costly. Especially today, most organizations simply can’t afford slow processes that are riddled with bottlenecks. Survival requires adaptability and agility.
End-to-end AP automation provides the technology and contextual data finance teams need to transform accounts payable. Instead of a slow-moving cost center spending most of its time processing transactions, AP can become a strategic business unit that adds value to the company and contributes to growth.
In addition, automation can ease the transition to remote work. It also gives AP managers and executives time tofocus on higher-value tasks, address inefficiencies and analyze metrics to drive the business forward. That’s a radical shift from the AP world we’ve grown accustomed to.
On average, finance teams spend 49% of their time on transaction processing, according to recent data from AQPC’s Open Standards Benchmarking Database. Detailed, labor-intensive tasks like this leave little to no room for strategic thinking. End-to-end intelligent automation helps AP leaders ditch this tactical burden.
AP automation delivers a quick ROI by slashing processing times and enabling companies to take advantage of early payment discounts. Advanced analytics yield metrics helping AP leaders analyze and strategically plan for the organization’s future. They’re in a better position to help drive business decisions, investments and growth. Data on the number of invoices paid on time, the volume of overdue payments, the top vendors by spend and time spent processing low-value transactions all help managers improve performance and play a more strategic role.
AP executives use metrics to add value in many ways. There's improved visibility into invoice and payment data empowers AP leaders to contribute to financial forecasting and budgeting discussions, and real-time data and metrics enable AP to offer more accurate cash flow analysis.
By identifying potential invoice or payment frauds, advanced analytics allow AP to contribute to fraud and compliance protection.
Many AP leaders have already seen positive results from automation and AP metrics. In its 2020 AP Metrics that Matter Report, analyst firm Ardent Partners found the perceived value of the AP department is on the rise among senior leaders. More than 55% say AP is exceptionally or very valuable to their organization. Additionally, 52% of CFOs see AP automation as crucial to operational efficiency.