The issue facing so many businesses is the continued use of paper-based processes and this reliance on paper means all supplier and invoice information is locked up in filing cabinets, and you must physically be in the office to approve invoices. Once they are returned to finance they are often never seen again! The process of approving invoices can take weeks and frequently leads to late payments which hinder your supplier relationships and opportunities to secure deals and early payment discounts.
In fact, relationships between accounts payable (AP) and finance are typically so disjointed that it can be difficult to obtain any insightful updates on whether invoices have been paid, which invoices are under query and your budget position. In many cases, information accounts payable does receive is often out-of-date and of no use, but at the same time it is the responsibility of AP to manage budgets, supplier relationships and secure the best deals making things very challenging indeed.
However, similarly there are two sides to every story and finance departments also face numerous challenges in paper-dominated businesses. Restrictions due to paper processes and software limitations can be difficult to manage alongside duplicate invoices from AP departments, unknown spend and delayed approvals.
In a world where hybrid working has become key with only a mere 30% of UK businesses still working full time in the office, it’s clear that traditional finance and AP processes are no longer up to the task and things need to change. These departments need to work together, and technology can help achieve this harmony.
What follows is an exploration of how technology can help to bridge the gap between AP and finance departments to breakdown the disjointed relationships and drive visibility and collaboration.
Typically it takes businesses 15-20 days to approve invoices and on average 20% of invoices are paid late. AP Automation software allows for instant electronic approvals on your PC/smart phone/tablet/laptop from any location with no reliance on in-office working 24/7. It can speed up the approval process by 50% and from the moment an invoice is approved they are posted to your accounting software for finance to view and payment can be made seamlessly.
As mentioned above, paper-based processes are almost always out of date by the time they are distributed which makes reporting and gaining any useful level of insight almost impossible. This is where technology really helps as immediate access to supplier invoices, credit notes, queries, payments, and real-time budget information transform the entire process. Information is available at the click of a button and allows you to drill down into individual suppliers, invoices or time frames and export to Excel for further manipulation – your opportunities are practically endless!
Clever features such as optical character recognition can aid the accuracy and efficiency in AP process exponentially by eliminating the need for manual data entry by automating the extraction of relevant invoice data. This not only saves significant amounts of time but also removes the human data entry process which can be error prone and cause lengthy delays and costly problems if inaccuracies occur. Research from the Aberdeen Group revealed that staggeringly 20% of invoices contain errors highlighting that OCR can be a valuable feature for any business processing regular invoices.
Did you know that 55% of money lost to businesses is accountable to invoice fraud? This fraudulent activity is costing businesses enormous amounts of money annually and can be so easy for fraudsters to commit. However, handy fraud detection features in AP Automation software can add a layer of protection to your business with bank detection features, central approval hubs and clear onboarding processes for suppliers; all of which help to reduce the impact of invoice fraud occurring.
It has become clear, especially in recent years, that traditional finance and AP processes are no longer up to the job in today’s hectic and challenging business environment. There has become a need for flexible, collaborative tools which offer valuable insight, drive efficiency and technology which bridges the gap between departments.
In this blog post we have discussed some of the clever features you can find in our AP Automation software which can bring efficiency and accuracy to your AP processes and improve visibility between your AP and finance departments.
For more information about Opera 3 SE AP Automation or to discuss your business challenges and requirements further, please contact us today.
Posted On: April 09, 2024
