having everything combined, electronically, into a single system means you can generate all sorts of reports…
Part Three: Improving Visibility
This is it! We’ve arrived at the final post in the series on how finance and technology leaders can support their organization’s bottom line by improving and automating accounts payable (AP) processes.
In case you’re just joining us, my first two posts (post one) (post two) examined how improving the efficiency of AP teams (as well as their access to critical documents and information) accelerates payment cycle times, reduces operating costs and improves customer relationships. You can achieve these improvements – or accelerate them – with help from enterprise content management (ECM) technology.
My final recommendation extends beyond the AP department and those participating in the invoice approval process. Let’s look at how a clearer view helps managers and executives better manage their organizations’ financial processes and financial health.
Paper-dependent Accounts Payable Departments are Flying Blind
By now, it might seem obvious to you that relying solely on paper documents, or on a mix of paper and electronic documents, prevents AP staff from seeing all the information related to a particular invoice or payment. Not only are paper documents easy to lose and misplace, but this “partial approach” keeps staff from being able to see what’s missing, what’s been modified, or if anything has been sent to the wrong people or departments.
Obviously, if issues arise regarding a payment and staff cannot locate the information they need to resolve the problem, you might very well develop problems with your vendor relationships. What’s worse, it can complicate the financial close and auditing processes, both of which put the business at risk for heavy compliance fines and penalties. Nobody likes that.
Perhaps most frustrating for finance leaders, like controllers or CFOs, is that paper-intensive invoice approval processes limit insight into invoice and payment volumes, which makes it difficult to assess the performance of their AP departments and accurately predict cash flowing out of the business. Having everything combined, electronically, into a single system means you can generate all sorts of reports. Those reports, in turn, can yield valuable insights – insights which can then be used to make smarter decisions. It’s a circle that’s anything but vicious.
So, just how important is visibility? If you’re the sort of person who likes numbers, mull these over for a bit:
- 68.9 percent of controllers indicate that improving visibility into cash flow and cash management is among their priorities. (1)
- 66.4 percent of controllers report that developing effective measures to gain visibility into overall performance of finance and administration functions is among their top priorities. (2)
- Nearly 60 percent of U.S. and European finance professionals are dissatisfied with the visibility of their financial close process. (3)
See More, Know More, Do More
Here are four ways AP automation and ECM helps finance leaders overcome this visibility challenge:
1. Better Cash Management
When you automate invoice processing with ECM, AP managers use dashboards to monitor the status of payments and summarize liabilities. This information provides finance leaders with a better view of outbound cash flow, enabling them to better predict and budget for cash requirements.
2. Simplified Audit Compliance
ECM also helps guard against compliance risks by providing a clear and auditable trail for every movement and touch of a document in the payables process. With every piece of documentation in one secure location, users can identify critical documents that may be missing in order to expedite the accounting close.
3. Easier Vendor and Dispute Management
ECM is easy to integrate with existing systems. Doing so allows AP staff to view relevant documents without wasting time searching for critical information on paper. They retrieve invoices, goods receipts, packing slips, check images, and more directly from their PC or device.
4. Informed Process Management
ECM systems featuring reporting dashboards provide further visibility into the current status of invoices within the approval process. The more you know, the better prepared you are to act and keep things moving.
Don’t Leave AP Departments Out of your Digital Transformation
When it comes to looking to help various functions and departments do more with less, technology is the direction to which leaders turn. Paper-based accounting operations shouldn’t be excluded from this consideration. As we’ve discussed across the last three blogs, the document management, automation, and reporting capabilities within ECM improve efficiency, access, and visibility across the invoice approval process – leading to real benefits to the bottom line.
Enterprise Content Management is one of those systems that, we believe, is quickly becoming indispensable. If any of these three blogs have piqued your interest in learning more about how it might be able to do great things for your organization, reach out to us. We love this stuff, and are happy to tell you more.
(1) IOFM 3 Ways Automation Improves Financial Operations Visibility
(2) IOFM 3 Ways Automation Improves Financial Operations Visibility
(3) Financial Close Benchmark Report