I studied history for a reason.
It was interesting and I did well at it. While it wasn’t my initial course of study, I paid attention when I aced my history elective in my first semester of undergrad, and by the end of the year, switched from another major. One famous and interesting historical dictum, comes from Socrates when at his trial for impiety he stated that “the unexamined life is not worth living”. Today’s post is meant to really be an introspective piece by which you examine the state of your current accounts payable process. While this may not be the most glamorous of undertakings, it is not without its merits. If bills don’t get paid, supply chains drag, production lags, customers get aggravated, & doom ensues. Simplistic yes, but there is some truth to it.
The Status Quo
With that being said, many organizations remain mired in antiquated and ineffective states of their respective accounts payable processes. Given the myriad of technology solutions available today, this should not be the case. However, in determining what the right approach is to bettering your Accounts Payable process, it’s necessary to define what optimal looks like given your unique AP landscape and business nuances. Granted, there is no silver bullet to all businesses by which you put to rest the werewolves that lurk in AP, but there are a set of tools that become helpfuland are (or at least should be common) to companies of all size.
While the biggest companies, with the deepest resources for technical talent and financial prowess can generally pull off dictating terms to their supplier base and pursue things like EDI or even e-invoicing initiatives. For most other businesses however, especially the micro, small, and mid-sized (say from 1MM-1B), managing paper based or PDF invoices is the norm. As such tools like capture technology (especially advanced OCR), document imaging, electronic workflow with business intelligence, dashboarding, reporting, data validation, and ERP integration are the big rocks that are going to bear down and pay dividends for you.
Faster, more efficient (usually upwards of 70% over manual processes), more transparent processes that allow you to put your finger down on any invoice or payment in the pipeline at any point in time. However, it doesn’t end there. With advances in e-Payment, there are multiple ways to cut into the volume of costly, inefficient checks that move between businesses all the time. Automated ACH and newer virtual credit card technologies enable most business to push near 80% of their payments through electronic funnels that come with the added major benefit of monetizing the process. Yes, we’re going to bang this drum loudly because a revitalized, and monetized process becomes a revenue generation tool and unlocks a challenge many business executives have struggled with in the whole AP automation debate. Sure the technology stack is amazing and the benefits are easily understood, but the price tag leaves many folks in sticker shock mode. So, if you have a profitable and lean AP process that can fund the technology transformation, what then are the impediments?
Certainly personnel resources come to mind but our approach to this is really to take a document process outsourcing vantage point and partner with someone who tackles the technology heavy lifting and provides the tools for you to manage your process via software. We actually did a post on that exact topic you can see here, though we believe document process outsourcing is the optimal way to go.
Now all that being said, back to Socrates.
If you haven’t examined it, maybe now is the time. Summer is winding down, we’re getting back to school and the fall is looming. Many businesses begin their next year planning process and perhaps so should you. If you want some assistance in this regard, just let it be known that we provide a complimentary AP assessment to benchmark your current state process in a way that may help frame the internal dialogues you’ll certainly need to have in order to create a compelling conversation for automation and ultimately that’s what we’re all about. We want AP leaders all over the world to transform their process and tap them for every ounce of value they are worth. However, in order to address the question at the heart of this post, you need to examine your own process and determine what's a priority for YOU!