How AP affects your bottom line, part 3: Improving visibility

Businessmen

This is it! We’ve arrived at the final post in the series on how finance and technology leaders can support their organizations’ bottom lines by improving and automating accounts payable (AP) processes. Thanks for sticking with me.

In case you’re just joining us, my first two posts 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 – improving visibility – extends beyond the AP department and those participating in the invoice approval process. Let’s look at how a clearer view helps managers and the C-suite better manage their organizations’ financial processes and financial health.

Paper-dependent AP departments are flying blind

Paper documents, or a mix of paper and electronic documents, prevent AP staff from seeing all information related to a particular invoice or payment. Not only are paper documents easy to lose and misplace, but staff rarely have a holistic view of AP information that lets them know what’s missing, what’s been modified, or if anything has been misrouted.

This can put vendor relationships in jeopardy if issues arise regarding a payment and staff cannot locate the information they need to resolve the problem. Even worse, it can complicate the financial close and auditing processes, putting the business at risk for heavy compliance fines and penalties.

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.

You can’t measure what you can’t see, and you can’t improve what you can’t measure

So, just how important is visibility? Here’s what senior finance leaders say:

  • 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]

Improving visibility to improve your bottom line

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 invoice payments and summarize liabilities for more accurate accrual reporting. This real-time 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 all documentation in a single, secure location, users proactively identify critical documents that may be missing in order to expedite the accounting close.

3. Easier vendor and dispute management

You can easily integrate ECM with existing ERP systems or other business applications, allowing AP staff to view relevant documents without wasting time physically searching for critical information on paper. They retrieve invoices, goods receipts, packing slips, check images, and more directly from their ERP screens.

4. Informed process management

ECM systems featuring reporting dashboards provide further visibility into the current status of invoices within the approval process, enabling AP managers with real-time information to identify bottlenecks and balance workload distribution among staff as needed to keep things moving.

Don’t leave AP departments out of your digital transformation

Technology is often the first place leaders look to help various functions and departments do more with less, and paper-addicted accounting operations shouldn’t be excluded from 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.

To learn more about moving your AP department forward, download the Accelerating Accounts Payable eBook.

Sources:

[1] IOFM 3 Ways Automation Improves Financial Operations Visibility

[2] IOFM 3 Ways Automation Improves Financial Operations Visibility

[3] http://info.adramatch.com/rs/adramatch/images/Financial%20Close%20Benchmark%20Report.pdf

Danielle Simer

Danielle Simer

Danielle Simer is a marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of enterprise content management (ECM) as a tool to automate paper-based processes and improve operations across accounting and finance, human resources, and contract management. Danielle joined Hyland after more than six years with a research and advisory firm devoted to helping senior executives manage their departments and teams more effectively. She received her bachelor’s degree from The Ohio State University and her MBA from Georgetown University’s McDonough School of Business.

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