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Reshaping the Future of Accounts Payable During a Digital Evolution

Thursday, May 6, 2021

5 minute read

Reshaping the Future of Accounts Payable During a Digital Evolution

The need to automate AP processes has never been more pressing. With many businesses having reduced staff to compensate for the economic downturn, the rebound we’re now seeing has created a predicament for those companies relying on manual processing. IOFM partnered with Basware to analyze the best strategy going forward for global firms now that volumes are picking up for many organizations. Learn about some of their findings in this excerpt from the report.

 

Reimagine your workforce with a digital evolution

The pandemic has accelerated the need to invest in source-to-pay (S2P) and procure-to-pay (P2P) platforms tailored to harmonize processes. As organizations evaluate their futures by planning to invest in new source-to-pay offerings or assessing the current state of their technology, the necessity to automate the payables function remains essential, based on recent Institute of Finance & Management (IOFM) analysis.

Whether you are at the beginning of your digital evolution journey or have already implemented a leading suite solution, AP automation will be a critical element to the success of your overall digital strategy. The question is not whether, but when to invest in AP automation.

The time is NOW for AP Automation

In February 2021, a plurality of 50 AP leaders shared that invoice volume is rising again including one in five that report increases of 10 percent or more. Moreover, the average size of invoices is also on the rise, suggesting this trend may just be beginning.

three-month-change-in-invoice

This increase means that AP departments are now confronted with a problem: They must staff up quickly or automate. Getting new staff up and running—which involves locating and hiring candidates, then training them—is not a quick or easy process in the normal course of business, and even harder with many managers still working from home.

Automation, on the other hand, readies the organization for the future, no matter what it may hold. While moving to AP automation the right way will require doing some homework on the front end, it’s a vastly better long-term solution.

What’s the cost of doing nothing when it comes to AP Automation?

As the economy begins to recover, companies may be tempted to assume the world will return to normal and their pre-pandemic processes will work in a post pandemic world. However, many experts don’t feel that’s a real possibility. Organizations that fail to adjust to a post-pandemic world will find themselves short-staffed with an invoice backlog and a workforce that prefers to telework as opposed to being in an office environment.

Doing nothing also means reverting to desk-level decision-making. That means everybody on the AP team follows their own processes and priorities, deciding for themselves how to do their jobs—which invoices get paid first, how to match invoices to POs, how to route things for approval, etc.

The challenges desk-level processes presented in early 2020 will only worsen in 2021 with an increase in invoice volume. Aside from the significant process inefficiencies, this nonstandard approach results in lost discounts, slow-pay issues, and duplicate payments, which means real money is being wasted.

cost-per-invoice

The goal: end-to-end automation

Automation extends beyond process efficiency and cost savings, however. It also provides:

Predictive analytics, which are essential to future thinking corporate governance through insight about expected economic shifts and trends, which can be leveraged to inform the organization's spend.

Supply chain risk mitigation. As we’ve recently seen, monitoring suppliers’ health and maintaining a roster of alternates can be a lifeline to business continuity in times of economic crisis.

Deep transparency into processes and compliance. That’s particularly significant in a world where brand reputation is increasingly at stake in terms of business ethics and sustainability practices.

Read the full report

Download the full report here and get answers to questions such as:

  • What are the steps I need to take to reach total, end-to-end automation?

  • What are the risks associated with not automating my processes?

  • What will I gain from standardizing my AP processes?

  • How do I get started on my AP automation journey?