In a profession where change has historically been eschewed for the tried and true, accounts payable (AP) professionals must feel like things are coming at them a million miles an hour these days.
- A prolonged shift to remote and hybrid working.
- New operating challenges, fraud, and compliance risks.
- Heightened pressure to deliver real-time visibility into invoice data.
- Unrelenting pressure to do more with less in an uncertain economy.
- Labor shortages.
These are just some of the trends that AP leaders face.
Disruption isn’t new. Technology, for instance, is constantly evolving.
It’s just that the pace of disruption has increased, in large part because of the pandemic.
The question for many AP leaders is how well their department is doing at keeping up with change.
More than three-quarters (77 percent) of AP departments have some form of automation, according to the Institute of Finance and Management’s (IOFM) World-Class AP Performance: Efficiency and Effectiveness Benchmarks. That’s the good news. Here’s the problem - less than 20 percent of all AP departments have automated and standardized their invoice-to-pay processes end-to-end.
These departments don’t have the foundation needed to easily adapt their operations. Consider how hard it’s been for most AP departments to operate in a remote work environment. Fifty-nine percent of AP departments have paid an invoice late during the pandemic because of operational disruption, IOFM finds. Almost one quarter of AP leaders say they are “concerned” about the way their department does things these days. Seven percent of AP leaders are “overwhelmed” by it all.
As CIOs strategize for the future, they must consider the revelations of 2020, Gartner warns. And one of the biggest lessons from 2020 is the need to prioritize digital opportunities across the business.
“Where digital acceleration is the name of the game, business leaders are clamoring for digital operational excellence,” Gartner wrote in its report, Top Strategic Technology Trends for 2021.
6 ways automation helps AP departments keep up with change
Digitization helps AP departments keep up with the dizzying pace of change. Here’s how:
- Flexibility - Digital workflows make it easy to adapt processes to changing business requirements. Documents can be dynamically routed based on configurable business rules, stakeholders can quickly approve invoices and access data, no matter where they work, and suppliers can be paid on-time without AP staff having to go into the office and cut checks.
- Efficiency - By eliminating manual, repetitive tasks with digital technologies, AP staff can focus more on data analysis, stakeholder collaboration, and other higher-value activities that can help a business navigate change. Machine learning and other cognitive technologies automate mundane tasks, so AP staff only need to intervene when necessary.
- Visibility - The real-time graphical dashboards, drill-down capabilities, ad hoc reporting, mobile access, and analytics tools built into automated invoice-to-pay solutions enable decision-makers to stay on top of and anticipate cash flow and corporate spending trends.
- Scalability - Automated solutions can be quickly scaled to support organic growth, mergers and acquisitions, and seasonal volume fluctuations, without the need for additional staff. The ability to efficiently scale their operations can also help AP withstand the labor shortage.
- Connectivity - Winning in today’s increasingly competitive and digitally connected commerce environment demands fast decision-making. Bi-directional integration between automated AP solutions and legacy systems provides 360-degree visibility into key variables.
- Security - Disruption of established policies and procedures can create new fraud and compliance risks. Automated solutions mitigate risk in an evolving environment by restricting user access and privileges, ensuring separation of duties, enforcing workflows, ensuring chain of custody, managing document and data retention, and more.
Change can be scary. But it doesn’t have to be bad. Change can be conduit to innovation. The disruption caused by the pandemic is an opportunity for AP departments to rethink the way their department operates and take steps towards achieving end-to-end invoice-to-pay automation.
AP departments that embrace this opportunity will be better positioned to come out on top.