Covering Disruptive Technology Powering Business in The Digital Age

Authored by: Zakir Ahmed, Senior Vice President & General Manager, Asia Pacific and Japan at Kofax

Digital transformation isn’t easy, but the exponential growth of corporate systems and data, coupled with the recent explosion in demand for work-from-home solutions brought about by the COVID-19 outbreak, is pressing businesses to automate, and fast. Organisations recognise they have no choice but to digitally enable their operations if they want to compete in 2020 and beyond.

The question is: Where to start to achieve quick wins? Should companies focus their energy and effort on the back office, front office or HR department? The answer’s tricky, especially when every corporate leader demands to see progress that demonstrates value to the business, reduces strain on employees, improves customer and vendor relationships and delivers positive ROI – in quick succession.

For some, especially those in IT, this is a tall order. Automated processes yield benefits, but which ones will have the greatest impact and the widest reach? Smart organisations realise the right place to start is in the finance department, and more specifically, the vital accounts payable function.

Business leaders have heard the reports from peers who’ve made the leap already – and they’re impressed. Success stories include reduced costs, streamlined operations, fewer hours spent on the phone with vendors, and happier employees. That’s why, in its 2020 AP Metrics that Matter Survey, Ardent Partners found that 55 per cent of the AP and P2P leaders surveyed believed digital transformation of the AP process is exceptionally or very valuable.

According to the study, top-performing companies that automated the AP process achieved six times lower invoice processing costs. And while lowering costs is a major goal of AP automation, accounts payable has even more to offer in the form of actionable insights. With automation, best-in-class companies in the survey were also 1.6 times more likely to use AP-related data and intelligence to inform enterprise cash flow analysis and two times as likely to leverage data and intelligence to improve stakeholder collaborationⁱ.

Many accounts payable teams have a long way to go in automating paper processes. As of 2019, statistics from the Ardent Partners survey show that just 50 per cent of corporations process invoices electronically. Although this an increase from 2018, most of the rise can be attributed to larger enterprises automating their processesⁱ. In contrast, 86 per cent of SMEs and 65 per cent of mid-market firms still enter invoice details manually, according to Level Research.

Future-proofing your AP organisation through digital transformation doesn’t require throwing out your enterprise resource planning (ERP) software and starting over. Instead, you can automate critical processes in sync with existing ERP systems and focus on two seemingly tactical – but influential – efficiency metrics. Your priority should be to reduce the time employees spend processing invoices each month while increasing their ability to manage a higher volume. The effect will be a transformation of their workday. Rather than spend so much time dealing with menial, tedious and paper-laden tasks, your employees will shift to higher-value projects.

AP automation is the linchpin that centres and provides support for your ongoing digital transformation.

How AP Automation Saves Time

Enables a faster invoice-processing cycle. Accounts payable continues to be mired in paper, a problem that contributes to delays, mistakes and slowdowns in invoice processing. According to a 2019 Ardent Partners survey, 47 per cent of AP leaders say elimination of paper and reduction of manual tasks is a top priority[iii]. Intelligent automation capabilities, such as cognitive capture and process orchestration, make the transition away from paper and manual tasks possible. And there’s another benefit to digitising paper invoices: by capturing and processing data, you can leverage it across the entire organisation for faster, more accurate decision-making.

Improves cross-functional collaboration. Accounts payable is the best place to start digital transformation because it impacts functions throughout the business, from procurement and business units to finance and suppliers. With AP processes automated end-to-end, key information flows faster and more easily between all stakeholders. Every decision and opportunity is optimised. It’s the reason why almost half of the AP leaders surveyed by Ardent Partners say improved collaboration with key stakeholders is a requirement for taking AP performance to the next levelⁱⁱⁱ.

How AP Automation Improves Efficiency

Reduces complexity. The average AP department receives invoices from multiple sources, in multiple languages and formats. This variety creates a number of complex downstream processes, which then require more time and expense to complete. Some AP automation tools are built to enable straight -through processing of even the most complex invoices, working with multiple currencies and layers of VAT taxes, and providing automatic payments to multiple tax authorities and vendors without human interaction. This alone can make AP teams exponentially more efficient.

Ensures consistency even during a crisis. Whether a company needs to work around a global pandemic, a regional hurricane or any other unplanned activity, we all need a consistent and fool-proof way to manage cashflow activities that’s not reliant upon paper-based, location-dependent manual tasks.  An organisation’s ability to act, react and have visibility into their processes from any connected device is a core component of remaining nimble and efficient.

Integrates AP automation with any ERP. AP teams that process invoices outside the company’s ERP systems face more delays and errors. When AP automation is integrated into the ERP, however, the entire process is streamlined, so they gain complete visibility and control over financial processes. That means they can leverage insights to take advantage of discounts and continually improve.

As IT teams face intense pressure to digitally transform their organisations, they should focus their initial effort where it counts most. AP automation is a prime place to start your digital transformation. You don’t have to worry about the wheels falling off your IT department or wrecking your revenue. Instead, you can be sure it will drive quick results across the business – and enable you to work like tomorrow, today.

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