By Mark Blakemore, Chief Financial Officer at Compleat Software
With the pound falling, interest rates rising, talk of the UK entering a recession - the Chief Financial Officer (CFO) is yet again at front and centre stage to help provide solutions to the seemingly impossible.
With a recent study of CFOs finding that 73% view economic uncertainty as a significant challenge for their organisation - the CFO needs to find answers, and fast.
CFOs wear many hats and are well-positioned to help to head off costly supply chain disruptions, with the support of their Supply Chain Manager, a profession which has historically faced challenges when it comes to Accounts Payable (AP) processes.
Despite the shift to digital taking place across all industries, many organisations are still relying on manual, paper-based processes to approve and pay invoices - with around 40% of all invoices still arriving on paper.
This creates a reservoir of problems, ranging from a lack of control around payments timings, to staff processing invoice exceptions and poor visibility for the CFO.
So, what are the barriers to AP automation and can it really help businesses to get a handle on their supply chains and processes to manage disruptions?
Busting the barriers
CFOs no doubt have heard horror stories about AP automation and what it may bring - but are the barriers as large as they are perceived?
For example, some businesses may be hesitant to automate their AP due to concerns that it will increase the likelihood of security breaches.
However, automation brings with it end-to-end visibility of the AP process that decreases the threat, as digital payments reduce the risk of theft and corruption by increasing accountability and tracking.
An additional benefit AP automation provides businesses with a secure and transparent system - allowing CFO's to gain insights into their working capital and carry out transactions, transparently.
Another barrier to navigate is the digital elephant in the room of what the business should do with the time saved from the removal of labour-intensive tasks, such as data entry, validation, exception handling, invoice approvals, and posting - it certainly does not mean the chop for staff.
Rather the contrary - businesses are able to make most of their staff by using AP automation software, by allowing them to focus on more business-critical tasks, as well as personal and professional development, all helping the business to futureproof its workforce and operations, whilst providing support and training to provide increased employee satisfaction.
Visibility: the ultimate disruption buster
Visibility is essential within the CFO’s world - so anything to give increased sight into the supply chain, the better - as it makes the task of predicting cash flow that much easier.
By climbing the crow’s nest, taking a holistic view, CFOs are able to identify potential disruptions before they occur and make data-driven decisions that will positively impact upon the bottom line.
Of course, when reliant upon paper-based invoicing workflows and processes, it is pretty much impossible to see where things stand at any given point in time, and any decision based on the information may not be worth the literal paper it's written on.
By bringing digital transformation to AP departments in the form of AP automation, CFOs gain instant 24/7 visibility into the entire invoicing lifecycle - this eliminates surprises, improves business intelligence - enabling businesses to continuously optimise its operations through leveraging real-time insights.
For those businesses using paper-based AP workflows, it’s impossible for supply chains to be as efficient as it can be.
By investing in tools that automate the AP process, CFOs can create a digital connection to suppliers, helping to avoid supply chain disruptions by streamlining data management as all relevant data will be in one universally accessible place - with efficient reporting capabilities.
AP automation reduces invoice exceptions by eliminating human error and delivering operational efficiencies by freeing up the time of accounts payable, procurements and department managers are only spending time on value-adding activities.
Ultimately - it improves supplier relationships through increased transparency in processes - as suppliers can be given visibility into payment status, and making sure they’re paid on time.
There is no doubt that AP automation helps businesses to more accurately balance their incomes and expenditures - accelerating and streamlining inbound and outbound payments flows - all of which has a direct impact on the bottom line.
Despite this, there is still a resistance to embracing digitised AP processes and manual processes continue to weigh the agile CFO down.
However, the increasing demand for transparency and greater efficiency should increasingly support the digital switch, driving the global AP automation market to approximately $4.5 billion by 2026.
By moving toward AP process automation, CFOs can eliminate the slow and error-prone process that are the root cause of many problems within supply chains.
In doing so, costs can be cut, cash flow optimised as well as real-time visibility gained into outstanding payables - all of which help to head off potential supply chain disruptions before they occur - resulting in one less thing the CFO needs to worry about!