April 19, 2017
By Mark Brousseau, Analyst and Researcher in Business Process Automation, Brousseau & Associates
Accounts payable professionals say there are several
reasons that only 23 percent of organizations operate
in a highly-automated invoice processing environment:
1) a lack of capital,
2) a lack of IT resources,
3) a lack of resources to support the project, and
4) a lack of a project champion,
to name a few.
Regardless of the reason that organizations have not automated their invoice processing, three trends require that organizations automate now, or risk finding themselves at a competitive disadvantage:
- Invoice processing is increasingly complex: Most businesses say their invoice processing is more complex compared to two years ago, the Institute of Financial Operations (IFO) reports. Worse, 48 percent of businesses surveyed by IFO expect their invoice processing to become more complex over the next two years. Without automation, complex invoice processes result in higher costs, more exceptions, long approval cycles, lots of supplier inquiries, compliance and security risks, and barriers to becoming a best-in-class organization.
- Businesses need better visibility into financial data: Fifty-nine percent of businesses say their demand for real-time visibility into accounts payable information is slightly higher or significantly higher than two years ago, the Institute of Finance and Management (IOFM) reports. Demand for better financial visibility can be attributed to the heightened focus that organizations placed on liquidity management and cash flow analysis in the wake of the financial crisis. Without automation, essential data is not captured, data is poorly organized, information is not timely, systems are not well integrated, decision-makers do not have access to key variables, it is difficult to track the status of invoices and payments, and it is hard to measure the effectiveness of systems, processes or staff or to make quick adjustments.
- The focus on spend management: Businesses are breaking down the barriers that have traditionally stood between accounts payable, procurement and suppliers. They recognize that improving visibility into organizational spend helps lower the cost of goods, more quickly identify budget variances and “maverick spend,” gain leverage during negotiations with suppliers, and ensure contract compliance. The problem is that paper-based processes make it nearly impossible for businesses to gain visibility into their organizational spend.
Responding to these trends requires businesses to automate their invoice processing.
Automation also positions businesses for the fast-approaching future of finance that will require an invoice processing environment that is simple, seamless and transparent.
Want to learn more?
Listen to our webinar on this topic.
Or click here to see our infographic on why businesses need to automate accounts payable.