If automation isn’t a priority for your finance department in 2019, it risks falling behind its peers.
That’s according to a new survey of more than 5,500 finance professionals across 2,000 organizations in 150 countries conducted by the Association of International Certified Professionals (the Association) and the Chartered Institute of Management Accountants (CIMA).
Per the Association and CIMA:
- 61 percent of finance professionals expect to automate more than 20 percent of their department’s tasks over the next three years.
- In fact, 55 percent of the finance professionals say that they have already “somewhat” automated their finance processes.
These survey results should be a wake up call for finance departments that still rely on manual and semi-automated processes for paying their suppliers. Less than one-quarter of accounts payable departments operate in a highly automated AP environment where invoices are approved and posted in an electronic, touchless manner, the Institute of Finance and Management (IOFM) reports.
As a result, repetitive, low-value tasks such as data entry, paper shuffling, filing and retrieval, and reconciliation consume a staggering 84 percent of the typical accounts payable practitioner’s day.
Making matters worse, 90 percent of finance leaders don’t believe that their teams have the skills to help the business grow and make better corporate decisions, per the Association and CIMA.
The good news for organizations that have dragged their feet on automating accounts payable processes is that emerging technologies such as cloud computing, robotic process automation, artificial intelligence, and holistic payments can help them quickly close the gap with their peers.
Automating repetitive tasks with these technologies will free staff to focus on strategic activities such as data analysis, cash and spend management, supplier relations, and vendor master data cleanup.
Six Strategies for automating Accounts Payable (AP)
Don’t let your finance organization fall hopelessly behind its peers. Below are six proven strategies that will help ensure that your accounts payable automation initiatives are a rousing success:
1. Engage key stakeholders early.
They can help you identify issues with your current processes, define needs and business processes, and evaluate potential solutions.
2. Define your top two or three priorities for improvement.
Work with your stakeholders to prioritize the processes for automation (e.g. invoice approvals, supplier payments, reporting). This will help keep your project team and your solutions focused on what’s most important.
3. Define minimum capabilities and criteria.
It’s easy to get swept up by vendor claims and sales presentations. Avoid possible distractions by clearly documenting what your finance organization hopes to accomplish by automating before you take your first vendor meeting.
4. Don’t pass up the low-hanging fruit.
It’s tempting to focus your automation efforts on exceptions that can be extraordinarily burdensome. But a better approach is to focus on the 80 percent of your transactions that can be easily automated, to begin achieving payback
5. Develop a solid business case.
Five metrics separate highly automated accounts payable departments from their peers that rely on manual or semi-automated processes: invoice processing costs, invoices processed per full-time equivalent per month, percentage of invoices paid on-time, percentage of duplicate payments, and the percentage of early payment discounts captured. Benchmark your current metrics against industry standards for automation and create a business case that lays out hard dollar savings, soft dollar savings and risk avoidance in a best-case, worst-case and most-likely-to-happen scenario.
6. Explore creative funding options.
Capital budgets are perpetually tight! Look for ways to leverage working capital improvements to pay for the cost of your automation initiative.
Finance has no time to waste in developing a strategy for automating supplier payments.
If your department is ready to close the gap with its peers, contact ACOM Solutions today at 800-347-3638 to arrange a free no-obligation consultation with one of our accounts payable automation experts.