Summer is here, and the living is easy - or at least it should be for the accounting department. For the accounts payable team, the benefits of saving time and money open the door to contributing more to the business, allowing time for team education, organizational development, and improvements to the internal processes and accounts payable workflow. The value of these activities can add up for a business, though it’s hard to imagine what that value looks like when your AP professionals are tied up in manual, clerical tasks. The benefits listed below are just the surface of what to expect when you use accounts payable automation to free up your AP team for a more value-adding agenda.
Reduced costs may seem like an obvious benefit. Of course, enabling your accounts payable team to work on strategic initiatives is going to save you a few dollars. But the extent of the cost savings could run much deeper. Do you know how far your dollar goes in the current operational picture? If you’re not sure of the answer to that question, start by analyzing your current processes and systems. Do you see any areas for improving the accounts payable workflow? Are there bottlenecks that cost your AP staff or the business users more time than necessary? Those are prime targets where you could make your money stretch further.
The effects of faulty operational systems go beyond process inefficiencies. There are resources from nearly every part of the business being sucked into an inefficient accounts payable operation. If the system is manual or paper-based, there’s a drag on supply costs for printing and storage. If the system is clunky or confusing to use, that puts a strain on lead time for getting new users onboard and using the tool effectively. And if your AP professionals are getting burnt out with highly tedious tasks and long hours around month-end, your human resources team may be getting pulled into the mess as well.
Perform a 5S Analysis
If you’ve highlighted some key areas in your AP process that could use a little help, you should be cautious about jumping to make radical changes in the hope that a 180° redirect will suddenly make everything better. Changes should be made deliberately over a gradual timeline to avoid corporate disruption and chaos, all while still reducing costs and eliminating waste. Get your AP team thinking lean as a first step in improving the overall process. The “5S Analysis” is a lean initiative for workspaces that consists of 5 simple steps:
- Sort: Remove any extraneous items or clutter
- Straighten: Arrange the furniture to serve the workflow best
- Scrub: Clean the work area
- Systemize: Set regular cadence of maintenance and review of the AP process
- Standardize: Follow the standards of the 5S analysis and incorporate it wherever possible into corporate operations
Implement AP Automation Solutions
Once you’ve taken the necessary steps towards optimizing your AP process, you’ll be more prepared to take the next step of implementing an automation solution that’ll address the root problems of an inefficient process. Accounts payable automation is no longer a luxury. With the latest technological innovations from automation vendors, these solutions can become strategic backbones supporting the digital transformation of the financial process. The value they provide benefits everyone involved in the finance department, from the AP clerks to the CFO.
From an efficiency point of view, AP automation is invaluable. The basis of automation is to remove the error-prone manual tasks of data entry and invoice processing. This is still a significant hurdle for AP, as 47% of AP professionals consider manual processes their biggest challenge. With the bulk of manual tasks handled automatically, resources within your AP team can be better managed, with the right people focusing on the right tasks, increasing efficiencies and taking advantage of early payment discounts.
Regarding visibility, accounts payable automation can open a window into the company’s financials. It’s more than just a pulse of the business. It provides actionable data at the right users’ fingertips, both concerning issues and opportunities, all of which are based on real-time data. Now, not only can you avoid late payment fees and improve vendor relationships, but you can also take advantage of payment timelines that open access to favorable cash flow and dynamic discounting opportunities.
Accessibility for Remote Workers
The heightened visibility and control that accounts payable automation offers open the door to a more flexible workforce. Business users who travel or split time between offices no longer need to spend time at a desktop approving invoices. CFOs can access data-driven reports on the company’s financial picture from their cell phone, wherever they are. And in an increasingly remote workforce, you can hire talent for your team regardless of location, since job tasks can be done in the system from nearly any location.
Face-Off With Tax Reform
For some of the accounting department members that carry 15+ years of experience on their resume, tax reform can bring back scary flashbacks to time-consuming hassles and a heaping plateful of tedious research and complex calculations. To say that times have changed is an understatement. The AP team can take advantage of the powerful reporting and data service from their automation tools. Rather than spending hours in spreadsheets basing assumptions off of convoluted equations, AP can automate the very tasks they would have had to do for tax reforms in decades past.
What About All this Extra Time?
Apart from the efficiency and cost savings that were covered above, the extra time saved for AP and the finance team can genuinely be altered to fit your company’s vision and values. Looking to promote a more healthy work-life for your employees? AP professionals can use the time saved for free physical activity time at the corporate gym or on group walks, improving their overall health and encouraging healthy interactions between co-workers.
Your AP staff can also take the time gained to develop their professional skills further. Why stop with learning the accounts payable automation tool? Employees can widen their scope to discover ways to embrace technology that will increase their efficiencies, such as savvy uses of smartphones, scheduling tools, and online conferencing tools.
Adding value to your accounting department makes your staff’s lives more comfortable and repays itself in earnest. With summertime upon us, make the most of maximizing the overall efficiency of your process to give your staff back the hours needed to do their job and go home to their families and friends on-time, every day.
In honor of International Women’s Day: women in finance & future trends in accounting