Why Should Accounts Payable Teams Automate Now?
Why Should Accounts Payable Teams Automate Now?
COVID-19 turned the world upside down. It has affected businesses worldwide and has forced companies to take a hard relook at their Strategy and Operations.
The acronym OOO (Out of office) may soon be defunct with WFH- Work From Home making it’s entry into the corporate acronym list through the back door! The line between office and home has blurred and WFH has changed the workplace we knew of until March 2020.
How long will WFH last? While no one really knows, some companies have started taking decisions to make WFH more permanent.
“There will be a long-term adjustment in how we think about our location strategy … the notion of putting 7,000 people in a building may be a thing of the past,”
~ Barclays CEO Jes Staley
Business process change – how it is moving from ’to do’ to ‘must do’ list
Sometimes early this year in 2020, working remotely for some business processes might have been in the “to do” list of projects under Disaster Recovery and Business Continuity Plan for functional heads like CFOs and CIOs. But looking at the current scenario these projects which were in “to do” list of projects have to be moved to “must do” projects in the later half of 2020. How do companies do it? Well, we don’t have a choice other than re-engineering our work processes to adapt to the forced change.
In short IaaS and SaaS adoption will be the key enablers to adapt to this change from a technology perspective.
We have seen that different companies are at different stages of their Digital Transformation journey. Some companies who were ahead in the curve were affected less and the companies who were behind in the curve were affected more.
Take the case of hardcopy documents. For companies behind the curve, even during the lockdowns some executives had to go to the office for a few hours just to collect the bunch of hardcopy documents so that they could work from home.
These companies who are dependent on hardcopies completely or partly might be wondering – ”Had we automated some of our business processes by getting rid of the hardcopies, we would have been in a better position.”
Well, it’s not too late, you can still automate some of your processes NOW! Let’s take for example Accounts Payable and why it should be automated?
Why the Accounts Payable(AP) Teams should automate NOW?
Reduce Operating Cost
Maintain Supplier Relations
Early Payment Discounts
1. Reduce Cost and Do More with Less
AP Teams have never been a Profit Centre but a Cost Centre. In the current economic scenario most of the companies would be under pressure to reduce Operating Costs.
Adoption of Digital Invoice Processing Application would help companies to reduce cost per invoice processed. Cost per invoice processed is much higher for hardcopy intensive and manual data entry processes.
Adoption of Digital Invoice Application certainly reduces the average cycle-time of the bunch of invoices processed. In other words the Productivity of the entire function involved in invoice processing is increased. This means the function will be able to process the same number of invoices with lesser resources or process a higher number of invoices with same resources.
2. Working Remotely is not an Option but a Requirement now
Executives are forced to work remotely or at best work from office and sometimes work remotely. This would be possible by adoption of Cloud based software applications like Digital Invoice Application. Companies are also viewing Work From Home(WFH) as an opportunity to reduce office infrastructure operating costs.
Further, executives who are travelling out of office can review and provide their approval from their mobile devices. This reduces the cycle-time of invoices processed as the approval time is reduced.
3. Supplier Relationship Management
In this current economic scenario of 2020, with most companies being under financial stress, suppliers are bound to be affected too. Paying them timely and accurately is the key to keep the supplier relationships at a healthy level. Adoption of Digital Invoice Processing Application certainly helps.
4. Avail Early Payment Discounts and avoid Late Payment Penalties
Companies are looking out to save costs by all possible means. By adoption of Digital Invoice Application(DIA), early payment discounts will not be missed and also late payment penalties can be avoided. How? Digital Invoice Application has an Unified Digital Cockpit where the executive can see the payment terms of each invoice based on which the executive can set the priority of invoice processing. The manual process of invoice processing tends to be on a First In First Out(FIFO) basis, or pay to the supplier who follows up more for payment on phone or by e-mail.
5. Secure Environment for Digital Invoice Application(DIA)
We have seen this year that the cyber security threats have increased significantly than before. This is because many companies were forced to carry out their financial transactions or information exchanges remotely without having adequately secured the environment just to keep their businesses rolling. Selection and investment in an Digital Invoice Application can mitigate this risk. This is because a Digital Invoice Application is normally hosted on the Cloud which has Artificial Intelligence based security features.
Since the start of Covid-19 pandemic, World Health Organization(WHO) has reported fivefold increase in cyber attacks, urges vigilance. This is mainly due to vulnerabilities of organizations caused due to an unexpected health crisis at large.
While the world struggles with the impact of COVID-19, cybercriminals see it as an opportunity. Since February 2020, IBM X-Force has observed a 4,300 percent increase in coronavirus-themed spam.