By Wendy St. Clair
Accounts payable (AP) has a huge impact on something vital: the cash available to the business. And in today’s challenging business environment, ensuring that AP can keep business processes moving has never been more important. And while some still see this back-office department as a transactional engine responsible for churning through invoices and fielding supplier calls, a perspective shift is underway.
The Shared Services & Outsourcing Network (SSON) explored this shift in mindset in a recent white paper analyzing the Australian and New Zealand market. They examined leading trends and the key role technology plays in supporting AP’s ability to optimize cash flow.
AP’s new strategic mindset relies on leveraging new skills within AP teams, closer collaboration with procurement, communication throughout the business and most importantly, the use of technology to provide automation that works seamlessly with an organization’s core business systems.
But how exactly is the right end-to-end AP automation solution opening new opportunities for AP?
Analytics that deliver more than reports
AP automation solutions featuring cognitive capture and best practice workflows can free AP teams from transactional work and allow them to focus on more strategic tasks. But improved decision-making requires insights, not just reports. That’s where analytics capabilities can provide value: connecting the dots to provide real-time, accurate and immediately useful information to help effectively manage working capital.
Optimized data from the start
Data must be complete and accurate for automation to truly be effective in increasing AP’s efficiency. The right AP automation solution will optimize data extraction from invoices no matter how complex or how invoices enter the organization. According to the SSON research, only 24 percent of respondents have a fully automated invoice processing solution that includes optical character recognition (OCR) in place. But those AP teams understand that capturing the most comprehensive information and validating it up front reduces invoice processing costs and ensures the data required for analytics and insights is available in the future.
Robotic process automation (RPA) has quickly become a solution to fill in manual gaps between process steps and systems, allowing organizations to create truly seamless automation. Combined with an AP automation solution, RPA is an affordable option to automate recurring processes, eliminate data entry errors and cut processing time. And because RPA sits on top of an organization’s existing technology, it is both complementary to core systems, such as SAP, and non-disruptive for day-to-day business.
Seamless integration with SAP
Core business systems are extremely valuable investments. And SSON points to ERP integration as one of the key attributes of a comprehensive AP automation solution. According to the report, capabilities like multichannel capture, best practice workflows, end-to-end analytics capabilities, supplier portals, cloud-based services and, as mentioned above, RPA, are all components of a complete AP automation solution. All of these components boost the value of your SAP system by providing additional functionality and seamlessly integrating information directly into your critical business systems from any location.
Improved interactions with customers, partners and suppliers
According to SSON’s white paper, only three percent of supplier queries are dealt with through an online portal. With such a low number, the responding organizations are missing out on tremendous value. Today, customers (suppliers, partners and internal customers, too) expect to interact with businesses through a convenient digital experience. Integrated self-service supplier portals offer transparency and convenience that dramatically improve vendor relationships.
AP’s new mindset: Cash flow first
Finally, let’s take a look at one Kofax customer who is a great example of all of the points made by SSON. Many organizations, in fact, can probably relate to challenges that led to the adoption of an AP automation solution at Koppens Developments.
Business Solutions Manager Jarrad Koppen explains, “We currently process up to 14,000 invoices every year and have a team of three people handling it all. In the past, our staff relied on largely manual methods to manage invoice processing. As we grew, we recognized that such an approach was quickly becoming unsustainable. Turnaround times were slower than we would like—putting us at risk of failing to pay suppliers on time. What’s more, the sheer volume of work made it challenging for us to gain fine-grained insight into costs and payments; insight that we need to ensure that we do not overrun our budget for a given project.”
The Australian construction firm has now automated end-to-end invoice processing and cut its time to process a single invoice from one hour or more to just three minutes. “Faster invoicing makes it possible to take on more work in AP without increasing headcount, helping us grow the business in a profitable way,” says Koppens.
But faster invoice processing is only one part of the Koppens story. Project Manager Martin Wojcicki explains, “With Kofax TotalAgility our team can capture much richer detail from invoices, right down to line item level, which is something they simply could not do in the past. We use this invoice data in conjunction with information such as purchase orders and actuals to feed our business intelligence engine, which gives us a much more holistic view of project costs. Now that we have this insight, we can make decisions based on real evidence rather than best guesses.”
It’s no surprise that SSON reported invoice automation and workflow as one of the top three priorities for procure-to-pay over the next 12 months. As their white paper points out, and as we’ve seen from customers like Koppens who have embarked on this transformational journey, the outcome is increased transparency, automation and speed. This helps shift AP’s focus to higher-value activities such as managing cash flow and improving operational efficiency, as well as to making major contributions to the success of the organization overall with better insights into a variety of business activities.
Want to learn more? Download the SSON white paper now >