With the advent of technology, processes and process control within organizations have transformed from being mere operational units to major strategic hubs. One such example within all companies is the accounts payable function, which has transitioned from a traditional cost center to a strategic working capital unit. In fact, the AP department has become so valuable that organizations are setting aside a definite IT budget to either deploy more advanced automated accounts payable software or upgrade from an existing on-premise infrastructure to a cloud solution.
Paper transactions introduce inefficiency and operational latency due to incorrect data entry or missing files. Handling paper was one of the major factors why the AP department was always lagging behind and not meeting deadlines. Rather than aid companies in timely reconciliation of payables and help update the balance sheet for profits and liabilities, the delays resulting from processing paper-based vendor invoices simply put a dent on the overall accounting operations. The AP department was therefore proving costly for companies in terms of operational inefficiencies and labor expenses.
Some of the major impediments to AP becoming a valuable department for companies were:
Exceptions: exceptions are a major impediment to AP efficiency and cycle times. Vendor invoicing times can be delayed from hours to weeks simply due to incorrect payment totals, missing invoices, duplicate payments, or payments for the wrong invoices. Correcting these errors and reprocessing invoices can escalate AP department backlogs exponentially. Getting operations back on track, especially in large enterprises, can be considered as another project in itself, what with the manpower and workplace resources companies will be holding up to correct and hasten past missed deadlines.
Invoice Processing Cycle Times: paper is unreliable and can be misplaced, lost, or damaged. Also, with paper vendor invoices piling up frequently, it is difficult to keep track of every invoice corresponding to the purchase order (PO) and correct vendor. Apart from the sheer complexity of maintaining large paper files, there is the trouble of tracking and retrieving every invoice during reconciliations and payments. Invoicing cycle times are naturally delayed, costing companies in delayed payment charges and mounting debts.
Supplier Verifications & Lookups: it is a known fact that the AP department spends an awful amount of time simply tracking down suppliers, inquiring about invoicing discrepancies or missing details, or asking to resubmit invoices in case of lost paperwork. This not only reduces the job of talented staff to menial, redundant work but also prevents them from enquiring about early payment discounts or better pricing deals.
Eliminating paper, therefore, has been the primary motivation for companies adopting digital transformation to manage accounts payable operations. But, with time, companies are seeking the cumulative benefits of streamlining vendor invoicing — an end-to-end vendor invoice processing software can not only automatically capture, extract, validate, verify, and approve vendor information before entering it in an accounting system for easy reconciliation and payments to vendors, but also reduces the need for additional manpower during peak workloads. Given that the latest AP automation software in the market comes equipped with intelligent automation that combines RPA with Machine Learning, AI, and a host of other cognitive technologies, the need for manual intervention in cases of exceptions is greatly reduced.
But the biggest, most evident advantage that companies have with an intelligent process automation platform for processing vendor invoices is the relationship they build and carry on with their suppliers. Suppliers form the backbone of business operations in any industry, and having an intelligent tool to manage your supplier relationships consistently and fruitfully simply elevates a company’s standing in the marketplace.
Among other cumulative perks like compliance, visibility, and control of accounts payable operations, companies finally have a chance to evaluate cash flows and plan for better spend management in the long-run. Intelligent automation of vendor invoice processing helps companies do more with less, scaling operations & business with little need for additional manpower or workplace resources.
Doing more with less is what makes businesses smart, and intelligent automation ushers in a smart enterprise without any changes to underlying systems and processes. With operational bottlenecks taken care of by intelligent automation, companies today are striving to find meaningful insights and strategies from reports generated from an invoice processing software. This is the next stage in digital transformation where companies get to respond to business outcomes instantly based on the insights generated, making way for a more proactive business process management.
The opportunities with intelligent technology are limitless, but the need to transform business is now. Looking to turn your AP & business proactive?