Efficiency is the king of finance operations. At least, according to Deloitte.
The past two years have been chaotic at the very least. Between ongoing labor, inflation and supply chain challenges, the pressure facing AP teams is mounting.
Help your organization scale efficiently with these 5 tangible steps to elevate your AP operations.
1. Automate invoice capture and processing to overcome capacity constraints
According to the Institute of Finance and Management (IOFM), two thirds of AP teams reported an increase in invoice volume in Q4 2021.
This makes it more difficult to scale, especially considering the challenges of hiring right now. When invoice volume and complexity increase at a faster pace than internal capacity and technology, accounts payable errors and inefficiencies snowball.
The amount of time it takes to manually process an invoice averages 10 whole days, according to Ardent Partners. The right automation solution can cut that down drastically – and we’re not talking by a matter of days, hours or even minutes. It can take just eight seconds to automatically process an invoice with the right tech.
2. Embrace modern tech to attract and retain talent
A recent IOFM survey on staff engagement revealed that nearly 60% of AP managers are burnt out. Building off that, Deloitte’s CFO Signals Survey reports that talent, labor and retention issues will be a top risk to financial performance in 2022.
Let’s face it – no-one wants to manually code invoices, update spreadsheets or chase approvals. Today’s finance and AP leaders must ensure their processes and tech stack are built with intelligent automation to attract and retain talent.
Similarly, employees value flexibility now more than ever and the right tech stack allows employees to thrive in the modern workplace. Leaders must embrace technology that enables their AP and finance teams to work from anywhere, on any device, and manage the invoice-to-pay process remotely.
3. Digitize supplier collaboration
Suppliers have been grappling with longer payment terms since the start of the pandemic. According to The Hackett Group, large companies took an average of 58 days to pay suppliers in Q1 2021, up 5.5% compared to the same period the previous year.
Longer waiting periods and lack of visibility try a supplier’s patience and create more work for AP teams that have to field calls and emails from suppliers asking for updates on invoice and payment status. The real-time visibility and communication created by digitization increases efficiency and reduces work for both buyers and suppliers.
4. Stay on top of global compliance regulations
Complicating the AP landscape further are the constantly changing eInvoicing and tax rules for each country in which organizations operate. AP teams must adjust and test processes to keep up with these shifts in rules and regulations. But keeping systems and processes up to date with the changes, such as configuration, testing, and implementation, can be very costly.
Enter the new age of invoice automation. These solutions are built to manage global invoice formats and standards automatically. Each invoice is cleared through the appropriate tax authorities and verified by the buyers while maintaining the proper rules for archiving, integrity and origin.
5. Digitize payments
Bank of America estimates that a paper check can cost anywhere from $4 to $20, depending on fees, shipping costs and how many checks you’re processing. This doesn’t factor in the time your team spends writing, mailing and reconciling payments or the time spent manually collaborating and communicating with suppliers on payment status.
Digitizing business payments, however, can save organizations between 65-75% on payment costs while enabling improved financial control. It can provide better insight into exactly who you’re paying, how much and when.
It’s crucial that you and your AP team embrace technology. Everything about the way we work, live and communicate is evolving. The time to digitize AP operations is now.
You may think your AP team lacks the budget and resources to implement new technology. We’re here to show you that’s not true.
Our newest report on 5 Ways to Elevate AP Operations takes a deep dive into these issues and offers insights on how to implement them properly. Download the full report today.
