Reimagining the Role of Accounts Payable with Digital Workflow Transformation
Organizations have historically viewed their Accounts Payable (AP) departments as cost centers—a necessary expense for doing business. But in doing so, they underestimate the function’s potential as a driver of efficiency and financial strength. AP can elevate its stature within the enterprise by positioning itself as a value center.
Why rethink AP’s role? The reason lies in the often-underappreciated position the function plays in every aspect of a business, from vendor relationships to delivery of more seamless customer experiences. If reducing the time and resources spent on the AP process yield significant cost savings, that alone would be a valid reason to pursue improvements. But if the benefits of an optimized invoicing and payments process included better payment terms, priority delivery of raw goods, ability to create stellar customer experiences, and more real-time insight into spend and cash flow health? Well, that’s where things begin to get interesting.
When AP is automated and centralized, organizations realize numerous benefits like the above. They recapture time and resources lost due to manual work, while reducing processing errors and costs. That’s exactly what happened with Toymaster, a central invoice processor for over 250 independent toy shops. Fifty-five percent of the company’s accounting team was bogged down with tedious invoice processing. When you consider that team members had to process thousands of invoices per month, it’s unsurprising this resulted in an enormous strain on the team’s resources (particularly at month end). Automation helped the Toymaster team realize operational efficiency, along with greater visibility into how invoice processes were being executed. And team members were able to shift to focus on more strategic and mission-centric activities.
Toymaster’s situation isn’t unusual. In a recent survey conducted by Shared Services and Outsourcing Network (SSON) in partnership with Kofax, only 10% of companies say they have fully automated their accounts payable operations. Almost half have partially done so. These findings suggest most organizations have plenty of room for improvement.
Yet there are positive signs of AP automation maturity, according to the survey. For example, manual keying of invoices is down, but one in four companies say they still aren’t using e-invoicing, despite its ability to eliminate manual handling of invoices. Further, 53% of respondents say they’ve centralized their AP, which enables greater efficiency, standardization and automation across the entire enterprise, thus lowering costs.
So how to move forward and optimize accounts payable? In our latest white paper, we address several questions you can step through upfront as you flesh out a strategy to transform your accounts payable processes with automation:
- How can I identify the gaps in my AP workflow?
- How can I successfully gain support from my leadership and key stakeholders?
- Who should be involved in the digital transformation of AP?
- What do I look for in a vendor?
- How do I measure success?
For organizations to truly work like the digitally enabled company of tomorrow, optimizing AP should be a priority. To understand more about the state of AP automation maturity and the results of the survey, download the report.
Join Kofax's David Sentongo at SSON's annual AP Automation Digital Summit on November 10-11, 2020, for a closer look at the report.Register Now