“For organizations and C-level executives hoping to enhance their financial forecasting accuracy and strategic goal attainment, payables is really the place to start. By relegating AP to a tier 2, back-office function, executives and organizations might be missing a strategic piece.”
The Aberdeen Group
If you’re the Director of IT, you know that you are continually looking for products that will deliver efficiency to core aspects of business processes while protecting valuable capital – intellectual and otherwise, and generating significant cost savings.
Under constant pressure to reduce IT costs, you are tasked with finding the right products while justifying all expenditures. Often inundated with requests for technologies that may not always fit in with existing systems or workflows, you have the difficult task of trying to make all departments happy while explaining why certain technologies are not a good strategic fit.
One business function that can deliver substantial ROI and streamline operations regardless of industry is AP Automation. Often thought of as more of a “back office” function, innovative AP management has become a focal point for the technology community.
And the reason is clear. Effective AP automation systems can save you time and money by improving internal workflow and reducing the reliance on outdated and inefficient paper processes.
By utilizing document management systems to automate AP processes, companies can significantly reduce errors and operational expense simultaneously. And that makes everyone happy – from the Director of IT to the CEO.
Justifying IT expense, implementing new technology, adjusting workflows and knowing how to measure ROI is the tricky part.
Here’s what you need to know:
Reducing Paper = Increasing Efficiency
Instead of wasting time shuffling paper, AP Automation systems allow employees to securely capture, process, and route AP invoices automatically – from one database. Invoices can be indexed, classified, and via workflow rules, funneled directly into ERP systems like SAGE 100 ERP or Microsoft Dynamics GP, allowing companies to take advantage of and fully utilize existing systems.
A full systems integration eliminates the need for double or even triple data entry – and can significantly reduce the costs of paper copying, mailing and printing, while Intelligent document data capture automatically recognizes and assigns vendor ID, GL and other ERP codes. And by handling an invoice once, your AP team can automate the review process – saving time and ensuring workflow is handled efficiently.
So what are you doing wrong? If any of this process is manual, you need to keep reading.
IT-enabling operations encompasses both automating processes (preventing [the use of] paper, digitizing work flows, and automating or supporting decision making) and using IT solutions to manage residual operations that must be carried out manually (for example, using software for resource planning)…taking full advantage of this approach… can often generate an improvement of more than 50 percent in productivity and customer service.
Rethink Your Current Systems and Approaches
Manual processes – in any stage of the AP Management cycle – are full of inefficiencies, prone to error and can wreak havoc on cash flow if not managed properly. New systems take time to get off the ground, but gathering input from all team members ensures the new solution/process will be optimized for your business operation and mapping out current AP workflows and KPIs (Key Performance Indicators) for a realistic ROI limits future surprises.
Conscientious CTOs and CFOs know there is more to new technology than the initial investment. Product implementation, upgrades and the shifting technology landscape all contribute to the growing need for selecting products that are cost-effective and useful now.
Focus on Cash Flow
According to The Institute of Financial Management, the AP process is evolving from a transactional entity to a “strategic business partner” for cash management. By implementing an automated AP Processing system, you can create workflows for handling invoices, set controls for compliant/timely payment and approvals (and capture early payment discounts), and more accurately govern cash flow in your enterprise.
Company Wide Document Management
Document management systems are not only used to provide AP Automation and compliance. They are also used as a one-stop corporate solution by securely storing and providing HR with instant access to information like employee files, health insurance forms, legal and other critical documentation. Document management also allows other business units to access to contracts, correspondence, compliance forms, spreadsheets, manuals and other data. You can manage security concerns by controlling document access, enforcing document retention policies, and reducing the burden of audit activity.
By implementing one department at a time, you can systematically centralize all documents for your business – ensuring access to those who need it while protecting your critical data.
“How you manage data privacy and communicate that in the marketplace can distinguish you as a business that is trusted by customers and other stakeholders.”
Measure Once, Measure Twice, Then Measure Again
Understanding the impact of business decisions and being able to more accurately predict financial performance is critical to any business. Start by benchmarking then measuring performance. Business decisions are better made when stakeholders have relevant, actionable data to work with. Perhaps your staff is spending excessive amounts of time on the phone explaining late payments to vendors. Or end of month cash flow dips below the CFOs comfort zone – every month. Or invoices are not paid on time because they are missing key supporting documentation.
Whatever the case may be, establishing KPIs for areas that may be negatively affecting your business is the place to start.
Get started today by reviewing and documenting your current AP Processes, determining the time and resources spent on the entire process from beginning to end and begin building a case for an automated process for your executive management team. They will thank you later.
Want to see what DocStar ECM AP Automation can do you for company? View our 4 Minute Tour today!