Is she really a bad egg?
It really shouldn’t come as a surprise in our increasingly wired, hyper connected culture, that our ability to deny ourselves instant gratification is a rapidly dwindling character trait. Everything is available at our fingertips for virtually any need or want, and if it’s not yet, then I’m sure there’s an app being developed it for it. Why should that come as any fresh news to those in the Accounts Payable space? It shouldn’t really unless, you consider the benefits and impacts of automation on the Accounts Payable process and the impacts of harnessing the data and insights byproducts of such an initiative. Once you latch on to the seismic differences from a process management perspective of an automated versus a manual process, the conclusion is obvious...automation is superior, six ways to Sunday. That’s the kind of thing that’ll have you lining up for the latest and greatest in app or gadget wizardry.
While Accounts Payable process automation is by no means something that is ‘flick of the switch’ although there are numerous apps that purport to make a meaningful difference, it is entirely worthwhile, assuming you can identify a program that fits within your budgetary and resource constraints. Thankfully, several companies exist that are not wedded to software licensing models, which are the buzzkill of many a starry eyed AP Automation dreaming CFO.
Looking at recent data from Aberdeen, one can see the drivers behind improving the finance landscape.
*from AUTOMATION: THE SOLUTION TO EFFICIENT FINANCIAL MANAGEMENT, Aberdeen Group, September 2015
Be still my heart…
Who knew that finance processes take too long and are resource intensive? Um...my guess would be any AP manager or Shared Services leader who is in the thick of it. Sometimes this kind of observation is so obvious that it doesn’t work its way up to the highest levels of an organization. At that point, strategic issues tend to be the dominant factor, and as such can quickly get lost in the shuffle. However, when those issues and executive priorities abut, there is opportunity to foster meaningful dialogue and good things can happen. You see, Executives are concerned with scaling for growth, mitigating risk, and driving cost reductions or other strategic gains. Process managers tend to be more outcome focused and want enhanced throughput, productivity, and hassle elimination. In a word both parties are looking for better process management and therefore, it’s a clear prioritiy for many organizations.
Consider the following chart:
With automation being a nebulous term, we feel it’s important to put parameters around that which make it easily understood and digestible. From our perspective, accounts payable process automation is one of the ripest fruits on the tree so to speak. Why?
Data Capture - OCR technology exists to eliminate data entry. Why would you want your people wasting time and effort banging on keyboards all day?
Document Management - Having indexed documents, invoices, statements, credits, check requests, whatever, all take up tons of space and are a total pain to manage on a pyhsical storage basis. Time to pull the plug on that and get everything into a solid document management system.
Data validation - Sure, you can have your people perform validation and matching functions against other transaction documents or data, as is the case when executing 2 or 3 way matches, but why not let the captured data do the hard work for you, and filter out the exceptions for human intervention. Archimedes said, “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” In this way Accounts Payable process automation is your lever and fulcrum, so I guess your world is about to get rocking and rolling.
Those are just baselines from an improvement standpoint. To really up the ante is to play in the realm of the possible and the strategic aka by monetizing the process.
Imagine that, what was (and usually is) a black hole of operational costs, becoming a profit center...inconceivable! But true.
Early Payment Discounts - Actionable data in an automated accounts payable process with rich visibility provides the ability to rapidly turn invoices around. Double whammy….late payment fee elimination.
Virtual Payments - No, we don’t mean paying your vendors with monopoly money. We mean digitizing the payment stream away from checks or wires to virtual credit card payments and tapping into the rebate stream, so you harness your purchasing power. Oh and guess what...that rebate stream can become the financial catalyst that empowers you to continue the momentum of automation in other areas.
So, the question is what steps are you taking to improve the financial management of your Accounting operations? Are these types of initiatives in your immediate future, and if not, why?
This is one of those things that is ok to want now, but no one said doing it is easy. Then again, nothing worthwhile ever is.