The strategic importance of an accounts payable operation in any organization, however big or small, cannot be undermined. This is because the outflow of cash resources is the most vulnerable area in accounting for any company, due to which the empowerment of your accounting department is extremely important.
Accounts payable operations are today in transition, as what was once a paper-based function is evolving into a cost-effective and more efficient automated process thereby enabling greater visibility and control while improving cash-flow management. According to the recent studies, AP automation reduces the cost of processing invoices per FTE by as much as 60%! At the same time, there are many companies where accounts payable automation is still heavily reliant on manual efforts and paper-based processes, thereby entailing higher risk of errors, and a complete lack of overall visibility. Let us have a look at how companies stand to benefit by incorporating the latest AP automation trends into their existing processes.
If a business looks at the AP department as a cost center, then they have much to learn. Modern-day AP processes can actually contribute towards a viable business strategy and turn every new invoice into a revenue generator. At the same time, there are certain challenges which need to be overcome in order to ensure accounts payable automation techniques actually work for the business.
These challenges include -
Digitization and automation in AP processes is a major requirement of the hour. Some of the key AP automation predictions for 2018 and beyond include -
Paper invoices are cumbersome and extremely resource intensive. It also is the most apparent cause of AP process inefficiency in global organizations. Even today, most organizations receive 70% or more invoices in the paper format. This leads to more manual data capture and increased chances of errors, as well as increased cost of maintaining large paper archives. As a result, more organizations are now growing up to the requirement of digitization.
In the future, we can expect to see more businesses employing OCR (Optical Character Recognition) techniques to capture relevant information, as well as e-invoicing initiatives. E-Invoicing is even more accurate than OCR, and will help organizations implement a robust and cost-effective automated accounts payable solution. Research suggests that by 2018, these accounts payable automation solutions will reduce overall turnaround times by 45%. Read our article on the future of e-Invoicing and how it can help your business.
Mobile solutions have proven time and again their ability to improve corporate communication and accelerate the speed and accuracy of conducting business. For finance departments around the world, mobility solutions are the key to improving their AR process performance. Reports suggest that the convergence of mobile devices, applications, etc. with enterprise file and invoice sharing will lead to better automation techniques being set in place.
In the future we can expect to see a growth in workflow-enabled smartphones, tablets, etc. allowing people responsible for maintaining AR processes to optimize their workflow and schedules easily. With new Wi-Fi standards already being laid in place, the day is not far when internet connectivity speeds would touch 7-10 Gbps. As a result, bulk-invoice sharing will also see a marked increase.
As businesses get more comfortable with tools such as ECM and ERP and other AP automation software, the general availability of data would help executives gain important insight, improve performance, manage errors, and identify potentially disruptive trends. Organizations would be able to leverage the data obtained from sharing invoices in real-time to set better targets, while continuing to innovate and streamline procedures.
Data driven AP processes in the future will help businesses take better financial decisions, ease up customer relationship management, reduce bottlenecks, accelerate procurement-pay cycles, improve vendor relations and more importantly, help form a cohesive AP process strategy based on the real-time data.
The year 2018 and beyond is the time when organizations will finally start putting the cloud to work in their day-to-day operations. Boundaries will blur between the way your AP department and other finance-related departments function, as you will benefit from huge efficiency gains while mastering cloud technologies for better in-house performance.
Accounts payable automation techniques will benefit from cloud-driven processes and lead to reduced overheads, minimal upfront costs, and unlimited scalability! Valid invoice data and associated document images could be easily exported to safe cloud archives in seconds, and line-by-line data extraction and verification will see a marked increase in speed and accuracy due to self-learning cloud architecture.
In the future, Accounts payable operations are going to rely less on pen-and-ink signatures and other sorts of printed forms. Not only are these traditional methods less secure, but also lead to significant delays, especially in cases where the signatory authority might not be present. Digital authorization techniques will be able to record individual signatures from a variety of different inputs such as stylus-recorded signatures, or passcode-enabled approvals.
AP operations as a result will benefit greatly from reduced paperwork, increased processing of purchase orders, speedier approvals to expense reimbursements, etc. Overall, AP automation will generate increased cost savings, while ensuring security remains a top priority.
At O2I, we believe that AP automation predictions are only as good as their implementation. We strongly believe in the tenets of automation and digitization and how it can impact the overall efficiency and productivity of your financial operations.
By choosing to partner with us, you will gain access to state-of-the-art accounts payable services and infrastructure for improving your AP processes. Our accounts payable services are not only cost-effective, but also help you work your way towards a leaner, less manual effort inducing AP operation.