Application Automation: Four Keys to Upgrading Billing and Payment Processes
Remember those early days of the pandemic when almost all of your business operations had to be done remotely, almost overnight? Naturally, there was an urgent push to automate as much as possible, from the mailroom to employee onboarding and even where and how documents were printed.
In the back office, Accounts Payable (AP) monopolizes much of the attention on automation, and for good reason. Inefficient AP processes are almost instantly noticeable to vendors and suppliers, and these are relationships that no organization wants to disrupt.
While the hotspot automation trend was certainly a good thing, many companies turned to point solutions or quick fixes, thinking they would suffice until things got back to ” normal”. Of course, we all know now that things will never be the same again, as organizations face near-constant disruption from supply chain issues, the Great Resignation, geopolitical unrest and a pandemic. that just won’t stop.
A quick approach lacks the agility and resilience needed to survive and stay relevant. On the contrary, it can lock your organization into a state of stagnation, preventing it from evolving and adapting.
So how do you unlock the full potential of endpoint automation? The answer lies in a platform approach that offers complementary intelligent automation technologies. There are four features that, when used together, act as a master key that unlocks the door to true digital transformation, transforming your AP service from a cost center into a resilient source of strategic value.
There’s no doubt that business leaders see the value in endpoint automation. In fact, 85% of business leaders plan to focus their automation efforts on endpoints, according to a 2022 study by Kofax Inc. Despite these good intentions, there’s still a lot of work to be done. Nearly a fifth (17%) of respondents still rely on manual AP processes, and 28% use partially manual AP processes.
Failure to achieve end-to-end AP automation can lead to two big drawbacks:
- Slow and error-prone invoice processing. Manual invoice processing, tracking and reconciliation is slow, laborious and inaccurate. The process is frustrating and monotonous for the employees doing the work, and it can lead to late payments and the loss of prepayment discounts. At a time when your suppliers and vendors are likely facing staff and product shortages, organizations cannot afford to jeopardize these relationships.
- Lack of visibility into AP operations. Disparate systems and processes within PA departments can cloud the quality and timeliness of reporting. Reporting inconsistencies and delays negatively impact the AP team’s ability to provide insight into key financial metrics such as cash flow.
The combination of these two drawbacks prevents organizations from reacting quickly to constantly changing internal and external conditions. But that’s the unfortunate result of partially automated solutions and piecemeal approaches that don’t support end-to-end automation and scalability.
Four Key Automation Capabilities
For scalable end-to-end automation that will unlock the full value of endpoint digital transformation and establish a foundation for resiliency, four key capabilities are required:
AP documentary intelligence. The automation solution must be able to process financial documents in any format or language, from any source. Multi-Channel Invoice Capture allows suppliers to use their preferred channel, whether scanned, paper, XML or PDF. Artificial intelligence technologies can understand the layout of invoices and identify the right information, regardless of format.
Electronic invoicing and self-service portal. The ability to send and receive XML invoices is not only convenient, but quickly becoming critical as e-invoicing adoption mandates continue to gain traction globally. A self-service portal adds to the supplier experience by allowing them to track the progress of invoices and payments.
Dynamic workflows. The ability to manage simple and complex approval and exception workflows within your AP process is another key to success. When you can easily create and modify custom workflows to process invoices, calculate invoice due dates and discount due dates, and reprioritize and handle exceptions, duplicates, and cancellations, your AP team can maximize productivity, save money and reduce errors.
ERP integration and cloud platform. A resilient digital endpoint foundation relies on the ability to connect your endpoint automation solution to any financial management system using pre-built connectors. The out-of-the-box integration makes it easy to route validated data to your existing ERP without having to waste time or money on custom integrations. A cloud platform further improves cost savings and return on investment with faster implementation, lower cost of entry, reduced reliance on IT, and around-the-clock access and support.
When these capabilities are available on a single platform from a single vendor, organizations can manage AP workflows more efficiently and respond and adapt quickly to changing requirements and market conditions. Sounds a lot like resilience, doesn’t it?
Successful hotspot automation delivers substantial benefits, according to a 2021 study by Ardent Partners:
- 5 times less processing costs per invoice
- 2.5 times faster processing time per single invoice
- 50% reduction in invoice exception rate
- 2.4 times more “contactless” invoices
Additional benefits include:
- More efficient and productive AP operations. Automation speeds financial close and auditing procedures, while reducing the time and effort required to improve billing and cash management.
- Improved relationships with suppliers. Which supplier is not satisfied with timely and accurate payments? If there is a supply problem, who do you think they are more likely to help? My money is on the company with a better payment history. Also, when suppliers can get status updates themselves through a portal, it makes their job easier.
- Improved employee satisfaction. AP staff don’t want to spend their time manually sorting bills and re-entering data. Automation allows AP staff to focus on more difficult tasks, such as identifying and fixing bottlenecks and using AP data to add real value to the bottom line. These are real assets that can help companies attract and retain top talent when staffing is a challenge.
- Increased strategic value. Intelligent endpoint automation provides real insight into billing, payment, and cash flow metrics. Armed with this data, the AP team can help negotiate better contracts with suppliers, maximize company cash flow, and take advantage of early payment discounts. Rather than just being a cost center that generates reports, AP can help mitigate risk, increase profits, and gain competitive advantage.
Don’t keep your AP service locked in a room watching other businesses go by. An intelligent hotspot automation platform is the master key that will unlock the true potential of hotspots with a future-proof and resilient digital foundation.
David Sentongo is Head of Product Strategy at Kofax.