If you've been following along, you may have seen my previous blogs on "How to take the headache out of the invoice approval payment process" and "How do you control business spending easily?". The common theme has been 'automation', so I wanted to delve into this a bit deeper, as many people have asked me 'is it really all 'upside' when it comes to automation?
There are obviously benefits to be gained from automating the AP process, such as reduced risk of fraud, and cost savings through greater efficiency, but that sounds pretty generic - even to me! So let's dig in and really figure out whether this automation business is all it's cracked up to be!
Automation saves you TIME
If you can remove the task of keying information, or chasing business users for their piece of the invoice payment puzzle from a team member, then that person's time is freed up to do more value-adding things, such as cost analysis of suppliers to ensure the business is getting the best deal! It also means that time-consuming manual tasks that otherwise slowed up the AP process can happen earlier on with less effort, or could be automated entirely. In practice, closing off month-end faster will be a reality, particularly if you make use of purchase orders and automation together.
Automation cuts costs associated with manual processes
There are a lot of hidden costs in a manual process. The time taken to open envelopes, scan documents, file documents, make multiple copies of everything and have them make their way around the organisation, all filed away in boxes, shelves and expensive office space. Many of these costs vanish overnight when you go down an automated, paperless office route. As an added bonus, you often cut costs by reducing your spend on external secure storage providers.
Automation helps with the 'where did that get to' factor
Lost invoices are a thing of the past with an automated AP process. The reality is, organisations spend a significant amount of time on each invoice, and if one goes missing in the process, the time count goes up. You are also exposing your organisation to financial risk. Late payments due to lost invoices can have you flagged as a poor performer with your suppliers, and this can negatively affect future price negotiations (in a way) even more significantly than the cost of processing the invoices.
If you have a robustly trackable process that keeps hold of all invoice information in a centralised place, and makes that information accessible to business users and finance at all times, the days of losing or reprocessing documents will be gone. No more processing of duplicate invoices (often issued as a result of lost invoices). As I'm sure you'll appreciate, even paying one bill twice can be a significant cost to any organisation!
No more 'nag nag nag'!
Even small tasks such as reminding people to do their approvals or chasing people to receipt purchase orders can soak up a significant amount of your staff’s time. An automated system can do this for you, and save the finance team having a negative contact with your business team.
So what's the downside of AP Automation?
Well, there are always those who will say 'we won't need people any more', and in a perfectly automated, machines run everything kind of world, that might be true. But we'll always need people with the unique skills that AP practitioners have to oversee things. There will always be people involved in the process so we'll always need people to ensure things are running as they should, or are improved where opportunities exist.
In contrast to replacing people with 'machines', the reality is that while automation will generally mean you need fewer people to perform tasks that were manual, it creates opportunities for people to bring greater value to the organisation, beyond their traditionally manual tasks. Or you may find you can grow the company without needing to expand the admin/finance team.
But how long until it all pays off?
Let's face it, whenever investment is required, we all want to know the ROI, or the Payback Period right. Most organisations who've invested in an automation and control solution have recovered their costs in the first year, and enjoy cost savings in subsequent years as a nice bonus!
So is it all 'upside' when it comes to automating your Accounts Payable process? It is from where I'm sitting!
Bevan Wright is an Accounts Payable process expert. Having spent over 20 years working as an accountant, he is now dedicated to helping businesses streamline their Accounts Payable and Procure to Pay processes, improving efficiency, increasing accuracy, saving money, and reducing the risk of fraud.
If you are interested in finding out more contact Bevan.Wright@Fusion5.co.nz to arrange a demonstration of the technologies which could assist your organisation. Or to learn more visit Fusion5.com.au/approvalplus/