Disruption was a significant threat to businesses, even before the COVID-19 crisis. Now, the stakes are higher. A company’s very existence could be threatened by back-office processes that cannot keep pace with the “new normal” – new operating models, new ways of buying and selling goods, and new risks. Finance leaders can navigate the crisis and position their business for the recovery by building an intelligent accounts payable function – one that is digital, data-driven and on-demand.
The New Normal
If it seems like the pace of disruption has been accelerating, you are not imagining things.
75 percent of businesses feel that the pace of disruption has increased over the past three years. That is according to research from Accenture. 93 percent of executives say their company’s existence is jeopardized by operating models that cannot keep pace with change.
The problem is that at most businesses, back-office systems have not kept pace with change. As proof, consider that 63 percent of businesses struggle to make fast decisions. Whether the threat is a disruptive ‘digital born’ competitor or a pandemic, businesses cannot afford tired operating models.
Most businesses are waking up to the threats posed by their outdated systems and processes. Seventy nine percent of organizations say that digitally transforming their operations is “very important” or “important,” according to the Association for Intelligent Information Management (AIIM).
Digital transformation initiatives are aimed at driving efficiencies across the enterprise, enhancing end-user experiences, creating new ways of allowing customers, suppliers and stakeholders to interact with the organization, and improving the accessibility and control of corporate information.
Digital transformation provides the intelligence businesses need to compete in an environment where things are constantly changing. Unfortunately, most lines of business are anything but intelligent.
This is especially true in accounts payable.
29 percent of executives surveyed by AIIM say that accounts payable is among the top candidates for automation in their organization. Despite the huge investments that organizations have made in enterprise resource planning (ERP) applications, the front-end invoice approval processes that feed these systems are largely manual. In fact, 64 percent of organizations must manually handle most of the invoices they receive from suppliers, SharedServicesLink finds.
The time that staff spend on tedious manual activities such as data entry and paper shuffling is time that they cannot spend on value-added activities such as data analysis and supplier management.
You know, the kinds of things that help a business navigate disruption.
The Intelligent AP Function
Best-in-class accounts payable departments long ago realized that there is wealth of valuable data that exists within their department. Accounts payable can provide invaluable insights into:
- Operational efficiency
- Cash management
- Corporate spend
- Contract compliance
- Days Payable Outstanding (DPO)
- Fraud and compliance risks
Businesses that unlock this intelligence put themselves in a better position to drive bottom line value.
An eye-popping 88 percent of businesses stated that data and intelligence is “critical” or “important” to their financial operations, Ardent Partners wrote in its 2019 State of ePayables Report.
Businesses that ignore the data that flows through their accounts payable department – and continue to rely on outdated systems and processes – are putting themselves at risk of being disrupted.
So, what does it take to build an intelligent accounts payable function?
- Intelligence capture. An intelligent accounts payable function aggregates paper and electronic invoices (including those sent by e-mail and fax), extracts invoice data using optical character recognition (OCR) and other technologies, validates extracted data against information residing in an ERP, matches invoices with purchase orders and proof-of-delivery documents, and supports multiple languages, currencies and types of documents.
- Content management. An intelligent accounts payable function improves accessibility and control of information through intuitive search capabilities (e.g. keyword and full text), database lookups, business analytics, controlled access, and comprehensive audit logging.
- Workflow and collaboration. An intelligent accounts payable function eliminates friction in the invoice lifecycle through digital workflows (including customizable business rules, ad hoc assignment of tasks and dynamic access rules), digital collaboration (e.g. mobile access, version control and centralized access), and integration with ERP applications and other downstream systems for the creation of ERP vouchers and the linking of images and data.
Intelligent solutions automate the invoice lifecycle end-to-end, through information capture, separation and extraction to data verification, voucher creation and information storage and auditing.
As a result, invoices can be processed faster …
… with less manual effort
… and less chance of error
… and more opportunities for early-pay discounts
… in an environment that is transparent.
With intelligent automation, accounts payable becomes digital, data-driven and on-demand:
- CFOs can access real-time insights into cash and spending
- Treasurers can more easily develop strategies for paying suppliers
- Finance leaders can better manage their costs and resources
- Procurement can better understand purchasing trends and spend-per-supplier
- Budget holders know where they stand with their spending
- Authorized users can access information and make decisions from anywhere at any time
This is a far cry from a tactical back-office function.
Building an intelligent accounts payable function helps a business navigate the disruption caused by the COVID-19 pandemic, while positioning itself for the future, no matter how it unfolds.
For more information about intelligent automation solutions from Canon, visit our website at www.ciis.canon.com