EVP of products at Kofax, a supplier of intelligent automation software to digitally transform end-to-end business operations.
Getty
When accounts payable (AP) systems are dependent on in-person and manual processes, a situation like Covid-19 can create serious repercussions. If no one's in the office, who'll open the mail, scan invoices and process the checks? If invoices don't get paid, vendors won't send products or provide services, which affects customer service and, ultimately, the business.
Remote Work Challenges For AP Teams
In my experience working for a company that helps businesses digitally transform, which includes automating processes such as AP, I understand how companies may be rethinking their processes right now. As AP departments transition to remote work, they're struggling to complete fundamental tasks originally designed to be handled in the office. The problem is many AP systems aren't automated or are a hybrid of manual and automated processes.
Pre-pandemic research underscores the enormity of this problem. A 2019 Payables Insight Report by Levvel Research noted that while 50% of companies have automated their AP workflow processes, almost a quarter (24%) still scan and email by hand and 23% do everything manually.
Paper's also a major roadblock to remote work. SMB and mid-market organizations report the highest volume of paper, according to the Levvel survey. SMBs say almost half of their invoices are paper, versus 22% in enterprise businesses. In addition, 57% of companies are still manually capturing invoice details, and only 36% have automated. The four biggest pain points in the AP process cited by respondents in the Levvel survey will sound very familiar to AP teams:
1. Manual data entry and inefficient processes
2. Manual routing of invoices for approval
3. Lost or missing invoices
4. Dealing with paper invoices
Compound all this with a pandemic lock-down with many nonessential workers staying at home, and AP could slow to a halt. Perhaps you were considering automating more of your AP processes before this crisis, but the money or support wasn't there to make it happen. Now, the frailty of your system is glaring.
AP Automation For Today And Tomorrow
When AP processes are automated, organizations can overcome these challenges and achieve dramatic results. According to research from Everest Group's 2019 Complete Guide to Accounts Payable Transformation, a business with nonautomated invoicing is paying an average of $10 per invoice. Businesses using automated invoicing average $2.07 per invoice. By implementing AP automation, companies can manage their invoices, suppliers, workflows and spend management metrics remotely, securely and from anywhere in the world.
AP leaders need a way to transition operations now, while their teams shift to remote work, so business growth doesn't lose momentum. What's more, the pandemic undeniably will have an impact beyond the quarantine period. Even after offices reopen, the way work is accomplished will be forever changed. Among CFOs and finance leaders, 49% say remote work will become permanent for some roles, according to findings from PwC, and 40% say they plan to accelerate the use of automation as they transition their remote workforce back to on-site work.
Strategies And Best Practices For AP Automation
Deciding where to start is really a matter of prioritizing where an organization's top pain points lie. Knowing that the goal is to reduce time and effort spent processing each invoice, one way to prioritize options is to review the current invoice workflow processes for bottlenecks. For most organizations, the process issues fall into a few top categories:
1. Eliminate the paper.
Many businesses struggle with too many paper invoices that need to be digitized and captured before entering the payment process. Savvy companies are learning one way to reduce this headache is with electronic invoicing portals. Implementing e-invoicing allows companies to connect with vendors using a global supplier database where they can send and receive information digitally to one another and avoid physical invoices altogether. Many countries have mandated e-invoicing and in the United States, any company looking to do business with the government is now required to use e-invoicing. As a result, this technology is picking up steam fast.
2. Automate invoice capture and verification processes.
For many companies, their top pain point is around the whole process of manual data entry, where AP reps tediously type in each invoice by hand and match the data line for line from the physical invoice into their systems. This process is not only time consuming but fraught with potential for error and even fraud. Solving this is a matter of selecting an invoice capture and matching solution that can do the job in a fraction of the time and with fewer errors.
For best results, look for OCR and capture solutions with machine learning embedded, so it can read a greater percentage of both structured and unstructured data. The result here is the more work the machine can do, the less work a team has to review.
3. Reduce manual routing and workflow activities.
Gone are the days where an invoice arrives into someone's physical "inbox" with a sticky note saying, "Please approve." Digital routing tools allow workers to virtually send invoice information around the office for review and approval then flow that output directly into an ERP system. A good solution can increase management visibility, help get bills paid on time, engage team-member ownership throughout the process and reduce any bottlenecks along the way.
With a little planning, companies can find these solutions from a single vendor, which can reduce integration headaches and time to launch. Look for solutions that integrate well with the current ERP, that have flexible deployment options and have the professional services resources to customize a solution for specific needs.
With automation, your AP teams will have the tools they need to perform their job just about anywhere. Businesses that use this time to adopt automation will not only survive the pandemic but will be able to start working like tomorrow, today.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
