In today’s post, we want to take some time to review some interesting trends we encountered in our recent industry readings and glean some key information from them. We’re going to focus specifically on the issue of financial reporting and the direction it’s heading, especially as it relates to areas like AP automation, and some of the implications around it. For many finance professionals it might be high time to use some new, advanced technology to boost productivity, hence the lever and gears.
Research from Aberdeen Group shows that many businesses are desperately seeking to turn the tables on how reporting is done within their organization in order to be more efficient with their time and effective with their people. This is reflected in the infographic above that reflects the pressures that are being exerted upon Finance organizations across the world. We find it interesting that the top two pressures driving this change are predominantly centered around quality control initiatives and on boosting staff productivity. This may seem like old hat for champions of automation like ourselves, but it’s crucial to remember that many companies are still running their businesses on spreadsheets. While it does get the job done, there are far more powerful and time saving tools available to alleviate these burdens and eliminate the limitations imposed by such approaches.
We find it interesting that the top two pressures driving this change are predominantly centered around quality control initiatives and on boosting staff productivity. This may seem like old hat for champions of automation like ourselves, but it’s crucial to remember that many companies are still running their businesses on spreadsheets. While it does get the job done, there are far more powerful and time saving tools available to alleviate these burdens and eliminate the limitations imposed by such approaches.
Another interesting finding from the study, which we recommend by the way and which can be found here, is that data accuracy is generally a byproduct of automated systems which facilitates faster and better reporting cycles, be they spontaneous (eg. audits) or scheduled (eg. period closes). Either way the table above show some of the common impacts on reporting via automation. In the case of transaction posting, nearly 48% of businesses who have this feature also have automated reporting. We find this interesting as this corroborates what we do on a daily basis with respect to our clients. If you consider the process and heavy lifting of advanced data extraction and verification, data validation (against procurement and receiver data), and ultimately data release, it’s no wonder that businesses that have had the foresight to deploy AP automation systems have a leg up on the competition from a reporting standpoint. Our argument in this area is that once you have the data unearthed and cleansed from the process outset you essentially have the mithril. For you non-Tolkienites, you’ve got an invaluable precious resource that will enable you to unlock tangential processes to include financial reporting with more accurate and even automated reports.
We do this for our clients in a number of ways:
- Month End Accruals - Instead of doing the archaic, departmental drill-down, you can take a snapshot of your outstanding unpaid invoices at month end to get a real-time view into pending expenses. Through this process guesswork is eliminated and this can be automated taking it down to a zero time factor essentially for your staff.
- Invoice Approval Cycles - Many companies have a loose grip on this, but desire to know how long things are taking to move through their approval workflows, due to both discount capture opportunities and late payment penalty pressures. This kind of reporting is automated and dynamic, meaning you can view at any time how long your expenses are taking to move from receipt through approval through payment with no handholding or troubleshooting required.
- Payment Monetization - From a fiscal impact perspective, reporting can be used to illuminate the many financial benefits of AP automation and automated reporting. You can quickly surface opportunities to capture discounts (as you can present terms information from invoice data extraction as a key process driver) as well as identify and route invoices for payment to more lucrative options like ACH or ideally virtual card options. While ACH won’t really earn you money, it will slash the expense of check cutting and postage. Virtual card will actually put you on a path to reap cash rebates from your payment stream and all of this will be made evidence-able via automated reporting that can be done a dynamic or periodic basis.
We hope that you found this insightful and we want to thank Aberdeen Group for their excellent research in Drowning in Report Preparations? Let Automation Keep You Afloat by Keir Walker, Senior Research Associate in December 2016.