Your accounts payable department made it through the initial fire drill stage of the crisis and has now stabilized, but you and other leaders have come to terms with the lack of agility in your AP processes and prioritized a process automation project. If this scenario sounds familiar, you are not alone. Before COVID, only half of all AP departments even received invoices electronically according to the Institute of Financial Management. And many of the other half who processed invoices manually or semi-automated have dramatic stories to tell including having to send employees to the mailroom to retrieve paper invoices in the early aftermath of the pandemic when offices were completely closed.
COVID has served as a wake-up call for many finance organizations. Despite a prediction for a decline in revenue for many industries, the importance of operational efficiency has elevated to be the primary focus of long-term digital investment initiatives for businesses, Gartner reports, followed by increasing the efficiency of spending.
So, where to begin? How does one lead a successful accounts payable transformation? Here are six recommendations to consider as you forge your way to building a resilient, nimble and efficient operations.
Know your processes
The well-known adage by Peter Drucker stands true in AP. If you can’t measure it, you can’t improve it. Discover and visualize how your AP and other finance processes really work through a data-driven analysis. Identify friction points, establish efficient ways of working, and pinpoint areas where cost savings are optimized.
The perpetual paper pandemic
Paper is the number one culprit of business process inefficiency, and the pandemic has only exacerbated the situation. One small silver lining that resulted from the crises is that it served as a catalyst for suppliers to finally send invoices by email and other means rather than physical mail. Take advantage of this trend by further automating invoice receipt and the entire end-to-end process.
Evaluate your invoice landscape
Every organization’s invoice ecosystem is unique. Become familiar with your invoice volume, the number of suppliers, and consider invoice complexity; that is, whether invoices include tables and line items, and derive from different countries and reflect different languages. Ensure that your automation system supports your specific needs.
Get real about artificial intelligence
Many company leaders have experienced the stark realization that their legacy automation systems are antiquated and simply not able perform to an acceptable level. The good news is a new generation of smarter, AI-enabled technologies are available and should be explored. Invoice automation by ABBYY, for example, bypasses the need to build templates for new supplier invoices through the integration of convolutional neural networks. Machine learning is also enabled so the system gets smarter and greater performance is achieved with use.
Think beyond accounts payable
Even before COVID, finance organizations had been evolving from a tactical expense and reporting center into a much more strategic function as an analytics competency center. This evolution is realized through automation. Granted, accounts payable is the most ‘automatable’ area in finance due to its paper-ridden, transactional nature and often one of the first areas of an organization’s company-wide digital transformation. Consider other processes such as sales management, travel and expense, and financial controlling and external reporting which are prime areas to explore. Invest in technologies that can also support other processes and financial documents like purchase orders or receipts.
If you’re reading this blog post, you’ve already begun preparing for an AP automation initiative. Continue your education – see where other organizations stand with their finance transformation journey in the IOFM and ABBYY webinar Shifting Your Finance Operations for the New Normal – Strategies for Success.