Future of Sourcing - Accounts Payable (AP) https://www.futureofsourcing.com/tags/accounts-payable-ap en Cash Flow Velocity: Redefining Supply Chain Financing https://www.futureofsourcing.com/cash-flow-velocity-redefining-supply-chain-financing <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Redefining%20Supply%20Chain%20Financing.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Redefining%20Supply%20Chain%20Financing.jpg" title="Learn three ways that supply chain financing (SCF) can help mitigate rising costs due to inflation and reduce friction when it comes to paying supplier invoices on time. " class="colorbox" rel="gallery-node-2171-UdbvhqP9kLc"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Redefining%20Supply%20Chain%20Financing.jpg?itok=iWkCE3Rw" width="624" height="325" alt="Learn three ways that supply chain financing (SCF) can help mitigate rising costs due to inflation and reduce friction when it comes to paying supplier invoices on time. " title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Supply chain financing is a win-win strategy for buyers and suppliers, says Dawn Tiura, CEO and President of Sourcing Industry Group (SIG). She shares three ways that supply chain financing (SCF) can help mitigate rising costs due to inflation and reduce friction when it comes to paying supplier invoices on time.&nbsp;</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/how-to-use-supply-chain-financing-to-extend-supplier-payment-terms">How to Use Supply Chain Financing to Extend Supplier Payment Terms</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><em>&ldquo;SCF can assist firms and their supply chains by increasing the velocity of cash flow and making those flows more consistent. Implemented properly, the firm and its supply chains can enjoy a symbiotic relationship.&rdquo; - Supply Chain Financing and Pandemic: Managing Cash Flows to Keep Firms and Their Value Networks Healthy, </em><a href="https://sig.org/supply-chain-financing-and-pandemic-managing-cash-flows-keep-firms-and-their-value-networks-healthy" target="_blank"><em>Rutgers Business Review</em></a><em> (2021)</em></p> <p>In my <a href="https://sig.org/blog/inflated-supply-chain-how-navigate-complexity-doing-business-during-period-rising-inflation" target="_blank">previous article</a>, I discuss how transparency creates the &ldquo;necessary trust to tame inflation&quot; by strengthening the relationship between buyers and suppliers to ensure &ldquo;a fair distribution of costs and profits.&rdquo; This &ldquo;fair distribution&rdquo; goes beyond negotiating a win-win price for all stakeholders &ndash; which is important; it also includes, among other things, the timely payment of invoices.</p> <p>In the context of Rutgers&rsquo; paper, timely payments will increase the &quot;velocity of cash flow,&quot; including making them &quot;more consistent.&rdquo; With the pandemic and now the war in Ukraine, consistency of anything is for many an elusive quest. Growing uncertainty is now the order of the day, and due to these devastating global events, our supply chains are stretching to the breaking point. As a result, finding savings that can reduce costs and improve the bottom line is more important now than perhaps ever before.</p> <p>If you have been in this industry for as long as I have, you are likely familiar with the term supply chain finance or financing (SCF). The concept is not new. The problem is understanding what SCF actually is and the expanded scope of its impact &ndash; especially during periods of market turmoil.</p> <p><a href="https://www.investopedia.com/terms/s/supply-chain-finance.asp" target="_blank"><em>Supply chain finance</em></a><em> is a set of tech-based business and financing processes that lower costs and improve efficiency for the parties involved in a transaction</em>.</p> <p>Often erroneously limited to reverse factoring/factoring, SCF, according to Rutgers, &quot;encompasses a broader class of solutions that provide net working capital (NWC) and trade financing to firms and their supply chains.&rdquo; In other words, SCF is more than financing receivables as it involves several key supply chain activities that can indirectly impact rising costs.</p> <p>This article will look a little closer at these SCF solutions.</p> <h1>Inbound Supply Chain (Accounts Payable)</h1> <p>The Rutgers paper identifies the use of purchasing cards (P-cards), purchase order financing, dynamic discounting and reverse factoring as inbound supply chain solutions.</p> <p>Of course, none of the above &ldquo;solutions&rdquo; are in and of themselves new.</p> <p>For example, by taking &ldquo;advantage of the existing credit card infrastructure to make electronic payments,&rdquo; P-cards offer more than speed and convenience. They streamline the procurement process leading to a reduction in processing costs. This last point is key, as <a href="https://www.napcp.org/page/WhyUsePCards" target="_blank">research</a> indicates that the processing &ldquo;cost of a $25 purchase is the same as a $10,000 purchase.&rdquo;</p> <p>Beyond the transactional savings, P-cards make cash flow management more efficient, improve reconciliation and allow greater transparency.</p> <p>Initially used for low-dollar, high-transaction items, there are indications that P-card usage is expanding regarding higher dollar amount purchases brought about in part by the introduction of virtual cards.</p> <h2>Outbound Supply Chain (Accounts Receivable)</h2> <p>Outbound supply chain solutions include collective invoices, sales offer financing, invoice discounting and factoring.</p> <p>Let&rsquo;s look at the benefits of collective invoicing.</p> <p>Collective invoices are used to pay suppliers who provide a regular service over a more extended period. It is an efficient way to lower processing costs for buyers and suppliers because it compresses the number of individual (smaller) transactions into a single invoice.</p> <p>By reducing the number of transactions to a single, collective invoice, transaction fees are lowered, saving time and money.</p> <h2>On/Off Balance Inventory</h2> <p>What is the difference between on-balance sheet and off-balance sheet inventory financing? The former utilizes what the Rutgers&rsquo; paper calls an asset-based lending approach in which the ownership of the goods in inventory is on the buying company&rsquo;s books and used as collateral.</p> <p>With the latter, inventory financing involves the transfer of &ldquo;operational goods, logistics and ownership&rdquo; to an external, third-party logistics service provider.</p> <p>According to a September 2020 Supply Chain Digital <a href="https://supplychaindigital.com/digital-supply-chain/how-reduce-supply-chain-costs" target="_blank">article</a> regarding how to lower supply chain costs, &ldquo;warehousing and storage have to be fully optimized as part of a larger supply chain strategy.&rdquo;</p> <h2>About Rising Costs</h2> <p>Beyond the positive impact on creating cash flow velocity, SCF can reduce hidden costs within your organization and impact the bottom line.</p> <p>While it may not lower the actual costs of goods &ndash; at least not directly, it will enable you to find greater efficiency and savings through improved financing and processing.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supply-chain-financing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supply Chain Financing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/p-cards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">P-Cards</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/accounts-payable-ap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Accounts Payable (AP)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Cash Flow Velocity: Redefining Supply Chain Financing - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/cash-flow-velocity-redefining-supply-chain-financing"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 27 Apr 2022 02:00:00 +0000 Dawn Tiura 2171 at https://www.futureofsourcing.com https://www.futureofsourcing.com/cash-flow-velocity-redefining-supply-chain-financing#comments AP Automation and Digital P2P Strategies Drive More Business Innovation https://www.futureofsourcing.com/ap-automation-and-digital-p2p-strategies-drive-more-business-innovation <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/AP-Automation-Digital-P2P-Strategies_1.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/AP-Automation-Digital-P2P-Strategies_1.jpg" title="Supply chain problems and labor shortages are not going away any time soon, but that doesn’t mean businesses can remain stagnant." class="colorbox" rel="gallery-node-2158-UdbvhqP9kLc"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/AP-Automation-Digital-P2P-Strategies_1.jpg?itok=znLhPOTB" width="624" height="325" alt="Supply chain problems and labor shortages are not going away any time soon, but that doesn’t mean businesses can remain stagnant." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Supply chain problems and labor shortages are not going away any time soon, but that doesn&rsquo;t mean businesses can remain stagnant says Shan Haq, Vice President of Corporate Strategy and Development with Transcepta. For companies of all sizes to grow and innovate in order to stay ahead of the competition, he shares a solution that could be in an unexpected place: automating the accounts payable (AP) and procure-to-pay process (P2P).</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/swimming-in-a-sea-of-invoices-how-to-streamline-your-ap-process">Swimming in a Sea of Invoices: How to Streamline Your AP Process</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>In our era of labor shortages and rising inflation, business leaders need to focus on doing everything they can to operate more efficiently and maintain margins and profitability. A key way to do this is by deploying automation that enables organizations to become less reliant on labor.</p> <p>When it comes to automation, one of the lowest-hanging fruits is accounts payable (AP). By automating AP and digitizing the procure-to-pay (P2P) process, you can do far more with fewer people, and you can scale workloads up and down without having to bring new employees on board. This is a great way to counter inflation and rising labor costs.</p> <p>But the benefits of <a href="https://sig.org/sig-university/certified-intelligent-automation-professional" target="_blank">AP automation and digital procurement</a> don&rsquo;t stop with just lower labor requirements.</p> <h2>Better Control Over Cash Flow</h2> <p>AP automation and digital procurement also give you more control over your cash flow.</p> <p>Automating AP processes reduces the time it takes to move all supplier invoices through approval and ready for payment. Eliminating this delay gives you control over the timing of the payments you make. During an inflationary time, you can use that control to your advantage by paying early to take advantage of available payment discounts or holding on to payment until it&rsquo;s due to further extend your cash flow.</p> <p>With more cash on hand, it&rsquo;s that much easier to invest in business innovation &mdash; whether that&rsquo;s tapping into new markets, hosting an event, investing in new products or joining forces with new partners.</p> <h2>Increased Access and Visibility for Every Supplier</h2> <p>In an era of <a href="https://futureofsourcing.com/the-future-of-the-supply-chain-is-data-driven" target="_blank">supply chain disruptions</a>, updating your AP and P2P processes is crucial to establishing more efficient business processes, but it must be done in such a way that doesn&rsquo;t leave your suppliers behind. Be sure to let your suppliers know how these changes will benefit them too, such as providing them with a feedback loop or visibility into transaction status.</p> <p>With modern AP automation, you will establish a direct digital connection to all of your suppliers. This enables both you and your suppliers to ensure that invoices are processed securely, accurately and automatically so that payments are prompt. At the same time, this also reduces the chances of unhappy suppliers or a supplier that puts you on a credit hold &mdash; something that could further disrupt your supply chain.</p> <p>What&rsquo;s more, you&rsquo;re going to have centralized visibility into every supplier&rsquo;s account and the associated transactions. With this information, you can run analytics to make more informed, better decisions on when to make payments, which suppliers are offering discounts, which types of transactions are causing supply chain disruptions, and how you can make adjustments to build a more efficient operation moving forward, among other things.</p> <h2>Turning AP into a Strategic Partner</h2> <p>Ultimately, AP automation enables businesses to transform AP from a function to a strategic partner. Instead of needing employees in AP devoted to processing invoices by hand, you&rsquo;re able to rely on technology to handle the bulk of the heavy lifting instead.</p> <p>As a result, AP won&rsquo;t have to research as many invoice exceptions, and they won&rsquo;t have to manually code or approve invoices because it&rsquo;s all automated. This frees AP staff to focus on other important areas of operations, such as researching new payment strategies, deciding whether to use P-cards or ACH deposits as payment tools, and working with finance to get a deeper understanding of overarching finance goals.</p> <p>Additionally, because you won&rsquo;t need as many employees in the AP department, you can reallocate them to focus on other important business goals. Maybe you need to hire more developers or add members to the marketing team, for example. Whatever the case may be, you&rsquo;ll have the resources you need to send reinforcements where they can be most effective.</p> <h2>Accelerating Innovation With Digital Procurement and AP Automation</h2> <p>From optimizing cash flow and building a more efficient AP function to increasing visibility into payments and turning AP into a strategic partner, digital procurement and AP automation solutions can help your organization get to the next level.</p> <p>Not only does digitization and automation put your business in a position to scale without adding people, but it also helps you save money, which can then be invested in other areas of operations &mdash; whether that&rsquo;s people or technology is up to you.</p> <p>It&rsquo;s no secret we&rsquo;re living through challenging times. Thriving in them requires making smart decisions that enable you to operate faster, more efficiently and with purpose.</p> <p>While updating your AP and P2P processes might not be the first thing that pops into your mind when it comes to innovating, it can serve as a cornerstone of your broader digital transformation strategy. With the right tools and strategies in place, you can build a more resilient business &mdash; one that&rsquo;s ready to fight off whatever storms come its way.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/accounts-payable-ap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Accounts Payable (AP)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/ap-automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">AP Automation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/transcepta" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transcepta</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="AP Automation and Digital P2P Strategies Drive More Business Innovation - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/ap-automation-and-digital-p2p-strategies-drive-more-business-innovation"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Wed, 30 Mar 2022 02:00:00 +0000 Shan Haq 2158 at https://www.futureofsourcing.com https://www.futureofsourcing.com/ap-automation-and-digital-p2p-strategies-drive-more-business-innovation#comments Swimming in a Sea of Invoices: How to Streamline Your AP Process https://www.futureofsourcing.com/swimming-in-a-sea-of-invoices-how-to-streamline-your-ap-process <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Swimming%20in%20a%20Sea%20of%20Invoices%3A%20How%20to%20Streamline%20Your%20AP%20Process.png"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Swimming%20in%20a%20Sea%20of%20Invoices%3A%20How%20to%20Streamline%20Your%20AP%20Process.png" title="Swimming in a Sea of Invoices: How to Streamline Your AP Process" class="colorbox" rel="gallery-node-2035-UdbvhqP9kLc"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Swimming%20in%20a%20Sea%20of%20Invoices%3A%20How%20to%20Streamline%20Your%20AP%20Process.png?itok=0qKOl7_q" width="624" height="325" alt="Swimming in a Sea of Invoices: How to Streamline Your AP Process" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Swimming in a Sea of Invoices: How to Streamline Your AP Process</h1> <p><em>The sheer volume of invoices that organizations must process can be overwhelming, resulting in errors, additional time and delay in payments. Let&rsquo;s examine some of the challenges that AP functions face and ways automation can help.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/the-pandemic-imperative-collaboration-between-payables-and-procurement">The Pandemic Imperative: Collaboration Between Payables and Procurement</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>A wise person once said, &ldquo;If you do as you&rsquo;ve always done, you&rsquo;ll get what you&rsquo;ve always gotten.&rdquo; That statement applies to many things in life, including accounts payable (AP) invoice processing.</p> <p>For decades, AP was a manual process. Vendors mailed paper invoices to customers and accounting teams would perform their two- or three-way match, comparing an invoice to a receiving document and the purchase order (PO) or other purchase authorization documentation.</p> <p>If the invoice description, quantity and pricing information matched, then the invoice would be manually keyed into a system, flagged for payment and an accounting entry made. That&rsquo;s if you were lucky enough to have the vendor address the invoice directly to AP.</p> <p>Often invoices were addressed to the main office address, received by a front office employee and eventually passed on to accounting. It was a good day if you processed the payment in time to avoid a late fee!</p> <p>Manual processing is so yesterday.</p> <p>The dawn of automation began in the 1980s with the advent of desktop computers. Issuing invoices, corresponding with vendors, matching documentation, updating the books and processing payment began a shift. This evolution continued over the past 40 years to where we are now &ndash; in a place where the entire process (minus a few keystrokes) is digital and seamless from beginning to end.</p> <p>In our ever-connected world, even small companies receive thousands of invoices per month. Handling that quantity of paperwork isn&rsquo;t feasible, and most companies can&rsquo;t afford to staff a department large enough to handle the load. There&rsquo;s also the time factor &ndash; manual processes are more time intensive than automated ones. Additionally, whenever humans are introduced into the equation, the chance for error increases. Multiply the time and error factor by thousands of invoices and problems can start to add up quickly.</p> <p>So, who isn&rsquo;t keeping up with the automation Joneses? While many are, 21% still haven&rsquo;t gone digital. Based on the results from <a href="https://www.medius.com/news/2021/medius-research-finds-poor-supplier-payment-processes-increase-costs-and-create-bad-business-reputations/" target="_blank">research commissioned by Medius</a>, 50% don&rsquo;t see the need or benefit, 45% lack sufficient resources and 15% lack buy-in from senior management.</p> <p>While companies are often reluctant to change their processes, those who do often experience a quick return on investment. Darin Brzakala, senior finance manager at Milwaukee Tool said, &ldquo;By adopting AP automation, we believe we&rsquo;ll see a full return on investment in cost savings, reduction in manual tasks and increased efficiencies in under a year.&rdquo;</p> <p>If implemented correctly, AP automation can benefit companies of all sizes in various ways:</p> <ul> <li><strong>Save time and money</strong> &ndash; Based on the aforementioned research, 44% of surveyed companies spent less time on invoice processing post-automation implementation. Teams are now freed up to focus more on value-added work. Additionally, 40% reported lower operating costs and greater visibility on spend. That contributes directly to the bottom line.</li> <li><strong>Reduce errors</strong> &ndash; Invoice processing and payment are delayed 49% of the time due to errors in master data. Based on a study by Levvel Research, the second greatest reported benefit to AP automation is an improvement in error rate.</li> <li><strong>Digitize documents</strong> &ndash; <a href="https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-social-economy" target="_blank">According to McKinsey</a>, employee spend nearly two hours every day, on average, searching and gathering information. That&rsquo;s equivalent to hiring five employees but only four showing up for work. There&rsquo;s no longer a need to dedicate entire cabinets to storing paper documents anymore. By going digital from the start of the process invoices don&rsquo;t need to be signed, scanned, emailed around the office for review and approval.</li> <li><strong>Have internet &ndash; will travel</strong> &ndash; <a href="https://www.gartner.com/en/newsroom/press-releases/2020-01-23-gartner-predicts-69--of-routine-work-currently-done-b" target="_blank">Gartner predicts</a> that nearly 70% of routine work will be fully automated by 2024. Going digital increases accessibility by moving manual processes from a physical location to the cloud. That will also open the talent pool with Gartner predicting disabled employees in the workplace tripling by 2023.</li> <li><strong>Don&rsquo;t reduce, reskill</strong> &ndash; With automation comes less hand holding. What used to be a more involved process is now simpler and straightforward. Before, a receiving clerk would perform the physical receipt of goods and then run the packing slip up to Accounting for the second step in the receiving process. With automation, hand-held barcode readers are used to scan in receiving documentation and automatically matched to invoices and POs in the system. This in turn enables organizations to rebalance their business by gradually reskilling employees. <a href="https://www.mckinsey.com/featured-insights/future-of-work/ai-automation-and-the-future-of-work-ten-things-to-solve-for" target="_blank">McKinsey predicts</a> that nearly 9% of the global workforce will be in new occupations due to AI and automation technologies.</li> </ul> <p>After implementing an AP automation system at her company, Catherine Duvaas, Accounting Manager at Visolit said, &ldquo;Previously, we handled supplier invoices directly in SAP. This involved time-consuming manual steps and it was difficult to obtain relevant reports. We now automate the entire process and instead have user-friendly reporting and an overview of the invoice flow and the degree of automation.&rdquo;</p> <p>Improvements post-automation were noted across the board. Of those surveyed in the study who implemented automation, 48% reported smoother purchasing and payment processes and 38% reported better collaboration across Procurement and Finance.</p> <p>Dolly Parton once said, &ldquo;we cannot direct the wind, but we can adjust the sails.&rdquo; The way we do business is ever-changing and the pace at which it happens continues to accelerate. Take a step back and look at your company&rsquo;s AP process &ndash; are you keeping up with the winds of change?</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/accounts-payable-ap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Accounts Payable (AP)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/medius" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Medius</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/invoices" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Invoices</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/ap-automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">AP Automation</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Swimming in a Sea of Invoices: How to Streamline Your AP Process - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/swimming-in-a-sea-of-invoices-how-to-streamline-your-ap-process"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 02 Aug 2021 16:33:14 +0000 Anders Fohlin 2035 at https://www.futureofsourcing.com https://www.futureofsourcing.com/swimming-in-a-sea-of-invoices-how-to-streamline-your-ap-process#comments Is automating Accounts Payable processes worth the effort? https://www.futureofsourcing.com/node/845 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.futureofsourcing.com/sites/default/files/articles/Steve-Malone-July-2015-3-420x215.jpg"><a href="https://www.futureofsourcing.com/sites/default/files/articles/Steve-Malone-July-2015-3-420x215.jpg" title="Is automating Accounts Payable processes worth the effort?" class="colorbox" rel="gallery-node-845-UdbvhqP9kLc"><img typeof="foaf:Image" src="https://www.futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Steve-Malone-July-2015-3-420x215.jpg?itok=djVBi5yt" width="420" height="215" alt="" title="" /></a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>According to the Institute of Finance &amp; Management, 61% of top global companies have implemented full Accounts Payable (AP) automation. This occurrence has had its challenges.</p> <p>Primarily, the universal commonality of budget allocation is the obstacle to overcome. When a company&rsquo;s CFO is prioritising expenditures, their eye remains on cash flow and compliance/risk mitigation. AP must factor into these objectives to achieve funding for automation (or for anything else; with decisions being made by priority).</p> <p>For many large and mid-size organisations, AP is a manual world. The three-way match process &ndash; insuring accuracy between vendor&rsquo;s invoices, the company&rsquo;s purchase orders and receiving documentation &ndash; is an environment of disconnected paper and electronic transmissions. AP professionals create business processes to best fit their environment&rsquo;s workflow, though they&rsquo;re aware through their repeatedly encountered frustrations that even their best efforts don&rsquo;t fulfill their objectives.</p> <p>This provides Finance-Accounting nexus: both share fiscal interest in both cash flow and compliance. The commonality brings the two together on priority, broaching the budgeting subject. Now to back it up with justification.</p> <p>Today, enterprise content management (ECM) has advanced AP automation to encapsulate document capture in all formats: paper, email with attachments, native electronic files of any type. The data housed in each document is intelligently indexed, and used to populate user-specific designated fields created in the ECM program. With enterprise resource planning (ERP) system integration, the newly introduced information is verified against established data in the ERP. Upon verification, configurable workflow capabilities fitting an organisation&rsquo;s particular business processes now enable accurate, cost-saving interdepartmental collaboration.</p> <p>With cash flow, automating AP provides accurate, real-time visibility into status of every project and transaction within the department&rsquo;s realm, as it&rsquo;s documented. This ability enables organisations to achieve overlooked vendor discount revenue (over 75% of payment-based supplier discounts go unclaimed by purchasers). Foster awareness and avoidance of any late payment penalties. Effectively be freed from hidden costs associated with overpayment of under-received orders.</p> <p>A major avenue to diminish expense is with processing AP transactions. Establishing policy of electronic payments to all vendors has positive, direct out-of-pocket savings from the first day of implementation. Industry studies pace ongoing cost savings to average 70% annually versus manual processing.</p> <p>Another source of cost reduction is with staff resources. With automation quickening the pace of transaction processing, it allows employees to be utilised in increasingly productive endeavours mission-critical to an organisation. Their time and talents are fully engaged, avoiding headcount increases associated with departmental turnover.</p> <p>Regarding compliance and risk mitigation, it begins at each transaction and project&rsquo;s start &ndash; with all documentation that touches AP captured electronically with key content indexed and utilised for accuracy verification. From this point, all data is archived, avoiding lost-paper/lost information scenarios of uncertainty. It&rsquo;s accessible to those provided documented permission by their company, trackable with each access. Reporting tasks are reduced to dashboard setting simplicity, a day-to-day benefit also realised with enhanced auditing efficiency and time/cost reduction.<br />ECM systems are available that, based on scale, provide full return on investment typically within a year.</p> <p>Is automating accounts payable processes worth the effort? So far, 61% say yes, with many others in discovery mode to see if they also agree &ndash; Finance and Accounting working together towards commonly-shared objectives.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/enterprise-content-management-ecm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Enterprise Content Management (ECM)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/accounts-payable-ap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Accounts Payable (AP)</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/automation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Automation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Is automating Accounts Payable processes worth the effort? - Future of Sourcing" addthis:url="https://www.futureofsourcing.com/node/845"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Thu, 21 Jan 2016 17:37:25 +0000 Tim Nissen 845 at https://www.futureofsourcing.com https://www.futureofsourcing.com/node/845#comments