Financially automated firms are not now at the top of our priorities. The employees working in your accounts payable department are almost probably struggling.
Employees from the Accounts Payable department commonly become cut off from colleagues. Furthermore, firms employ AP teams to process invoices and handle expenditures, but these teams frequently find difficulty with the varied intricacies related to that procedure.
One aspect leading to making your AP people’s life tough is that every business unit tends to have its own expenditure approval procedure. From this information, it may be inferred that the goal of invoices, spending approvals, and vendor payments were all incomprehensible to the AP units.
The added complexity includes WFH.
It became especially difficult to keep the department running smoothly during the outbreak of the pandemic in 2020. When “going remote” happened unexpectedly, communication between different corporate divisions decreased. AP’s partnership with other businesses grew even more evident, since it was clear other business units did not regard their connection as mission-critical.
Luckily, a solution to the problem is to be found in automated systems like Stampli. Business owners may be assured that any AP financial automation system will not only automate the payment of digitally authorised invoices; the system must include a wide range of other features.
Since CEO Eyal Feldman asserts that “it is the simplest aspect of the process,” Stampli’s processes are simple. In the interview, Feldman addressed the topic of how firms are hindered while trying to pay their approved vendors on time. Payment is the final stage in the Procure to Pay (P2P) Process, and most AP solutions focus on it, he added. Vendor payment is a significant problem; it begins before a payment is issued. You have to make sure everything is in order and that the invoice has been properly approved in order to pay on time.
Financial automation should focus on helping the whole business (including AP) collaborate. In order to identify an AP automation system with built-in cooperation and streamlined access to all required information, business owners need continue to search until they discover one. Companies made educated judgments because of everything essential such documents, purchase orders, invoice history, and so on. When you’ve solved all of the communication difficulties, the AP clearance process goes much faster and with greater accuracy. This is useful for businesses to be able to pay their vendors on time.
The WFH impact on accounts payable is dealt with using financial automation.
AP departments have been hurt by the increased WFH movement that followed the global Covid-19 epidemic. He went on to say that finance departments that were using outdated, paper-based methods suffered during the epidemic and found themselves under considerable pressure to quickly switch to more efficient and modern systems.
In the beginning, firms had to manually digitise many operations quickly. CEOs and financial leaders everywhere were made to make digital transformation a key priority because of the ever-changing landscape. They had to locate remote-friendly applications that connected with their existing financial and accounting systems, while also enabling cooperation.
Businesses at the period concentrated on solving common problems. Businesses concerned with verifying and paying invoices are another good example. Having done this, fixing pre-existing communication and cooperation difficulties wasn’t necessary on the list of concerns to tackle.
Companies should be aware of how they can effectively assess current AP systems.
The payment and approval procedure is of critical importance to many firms, and this is quite understandable. While the importance and impact of these important financial indicators is undeniable, there’s no doubting their value and relevance when evaluating a business’s financial health.
In reality, of course, there are several indicators to take into consideration. As long as your AP staff has too much on their plate paying bills and receiving payment approvals, there’s obviously an issue with your current invoicing and payment systems.
To ensure AP professionals remain prepared for future work-force models that involve increased WFH workers and vendors, we’ve included four new indicators for your team to keep an eye on. These metrics should be made public. It is also critical that you convey your API team as well as important organisational stakeholders to everyone in your business. Don’t hesitate to make suggestions to your AP group if you’re searching for a financial automation solution that doesn’t give this degree of transparency and detail.
- Finding, Tracking, and Reporting Discounts from Vendors
To what extent has your AP staff been able to garner early payment reductions during the previous three reporting periods? Are you losing money because an invoice has been sitting on someone’s desk for a few days longer than necessary? This may build up rapidly since we must root out and eliminate all of these oversights.
Taking advantage of any discounts or promotions will most likely uncover new methods to save money and cut your total AP expenses. Efforts to ensure prompt payment add up over time even if just a small number of invoices are given a late payment discount. With the help of automated AP systems, your AP team can free up time to concentrate on negotiating with other vendors to boost prompt payment savings for you in your supply chain.
2. A focus on supplier relationships was increased
How many inquiries, disagreements, and disputes do your AP team have to deal with from your suppliers? In many cases, businesses aren’t trying to do anything else except stay on top of their bills and pay the bills to keep the business afloat. Ask your AP people if they’ve ever had misgivings about paying a specific invoice and they might list several.
Is there a specific invoice you need to pay attention to? Additionally, is there an ongoing problem with a vendor? Automating AP paperwork will give your people the “breathing room” they need to do a better job. Specifically, they will do a better job of following up on any questionable transactions.
- Spotting Inaccurate and/or Duplicate Payments
What percentage of monthly payments are incorrect? Who made them, and why did they make them? These are crucial facts for analysing where your firm could be bleeding cash unnecessarily. Most frequently, incorrect payments are the consequence of minor mistakes, but not always. AP financial automation offers both clarity and improved responsibility.
Knowledge of incorrect or double invoicing frequently exposes the need for additional training. Also, this might result in process complications or software errors. The two things that may be determined by analysing the duplicate payment rate are This, in addition to determining whether a vendor is double billing, serves as a verification of the risk of fraud.
4. Measuring the efficiency of the team
Invoice processing time is proportional to team member quantity. It’s possible to ascertain who is utilising their time effectively, and who is falling behind by examining the data generated by automation. It’s critical to zero focus on those who are having difficulties. This might assist you identify whether or not you should concentrate on techniques of training that will allow you to succeed. Process improvement or workload distribution might be additional things to have a look at.
In an era of more distant work, a growing demand for AP bottlenecks and difficulties isn’t going anywhere soon. Unexamined, these concerns might worsen the gap between AP and other business divisions, as well as lead to more friction and estrangement. Many organisations can profit from the help of an automation partner such as AP by working with each other to smooth things over. There’s no need to consider this as an option if you haven’t explored it yet. It is advisable to gather information first by speaking with your AP personnel.
Image credit: nataliya vaitkevich; pexels; thank you!