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Survey: How finance executives rate the state of their AP flow

Just over a month ago, we shared the infographic report from our survey of finance executives in North America. Today, we’re revisiting three of the top takeaways from those results and the key recommendations on how you can set your organization apart from the statistics as leader in efficient AP flow. 

Top Takeaway #1: The majority of companies have not moved beyond the traditional, basic technologies

Among the survey respondents, the mostly widely adopted technologies are also some of the most traditional, basic tools in the market: ERP workflow, OCR/scanning, and EDI. While not surprising, as these are among the oldest solutions and have been around for years, it should raise concern for businesses looking to stay on the forefront of the competitive edge. These old, basic systems are far and away from the most effective, usually leaving a large percentage of the invoice process as manual and/or paper-based. If you are currently relying solely on these tools, this presents a great opportunity to get ahead of your competitors and distinguish your business as a leader in efficiency by adopting a more modern solution.

If you’re looking to upgrade or implement automation for your AP process, we have some recommendations to help guide you.

Fix-all is bound to fail. Large systems that claim to improve every area of the P2P process – including AP, Procurement, AR, and T&E management all in one -  are often too good to be true. While they may improve certain aspects, they will likely fall short in other areas and not follow through on their original claim of improvement. Furthermore, a large unwieldy system usually requires a long and painful implementation and a large amount of IT resources for day-to-day maintenance. Look for a vendor that’s an expert in the area you want to tackle first as a priority to get the greatest efficiency gains in the least amount of time possible.

Digitization is just the start. Just turning paper invoices into electronic format or moving a manual workflow from physical space to a digital space is not going to give you much of a lift in efficiency. True automation will completely remove the manual interventions so that AP can run as it should – without the need for human intervention.

Implement a solution your team will love. It’s a fact; your staff are far more likely to quickly adopt and continually use a tool that is user-friendly. Look for a solution that is more than marketing glitz; make sure you’re implementing a solution an easy-to-use interface that can be accessed from anywhere, especially for mobile users on the go.

Discover a best-of-breed AP invoice automation solution: Watch a video demo of MediusFlow.

Top Takeaway #2: Lack of visibility and poor communication across systems are pervasive issues affecting all ends of the business 

When asked about various pain points in the AP process, respondents primarily landed on the struggle with lack of visibility and disparate systems with no clear path of communication. This is alarming, as these two affected areas are key markers for success in an organization: visibility and control. 

In terms of visibility, the effects were two-fold. Respondents reported a lack of spend visibility, meaning insight into large portions of invoices not under purchase order, commonly referred to as indirect spend. Without an audit trail in a single system for accurate forecasting, companies are missing out on the opportunity to generate savings and likely find it difficult to keep spend under control, both of which ultimately affect the bottom line. As a secondary effect, an overall lack of visibility resulted in respondents reporting that they had no clear way to measure, monitor or improve their process. You can see how this lack of insight would be deeply troubling for those who own the financial process, such as CFOs and Controllers.

Fret not, there are modern invoice workflow tools that can eliminate this murky financial view. Should you choose to explore implementing such a tool, there are some key recommendations to keep in mind. 

Own your process. The entire process. Best-in-class AP leaders make continuous efforts to improve their invoice process from a holistic point of view; that is, from receipt of the invoice all the way to posting in the ERP. To emulate this characteristic, you should monitor, analyze and improve the most important process KPIs, focusing on those areas that prevent a truly touchless invoice workflow.  

What cannot be measured, cannot be met. A modern AP automation solution will be able to provide you with data-driven dashboards for actionable intelligence. Pair that with accurate benchmarks to compare your own numbers too, and businesses can easily rely on self enablement to improve and get to best in class levels of efficiency, with the KPIs to back it up.

Top Takeaway #3: Wide-ranging opinions of technologies available presents a challenging path to the right AP solution for the business

When asked what they thought would help them improve their overall efficiency, the respondents’ answers were all over the map. More than half of respondents selected improving supplier self-service, process standardization, increasing invoice data capture automation, and rolling out invoice automation as what they believed would make the biggest difference. In North America, there has been a rapid development of interest and availability of P2P solutions, and, consequently, there is a need for education on what the landscape looks like, what tools do what. 

Over 60% of survey takers indicated that a supplier portal or supplier facing solution would make the most different in their process pain points. This is a common misconception, but one with serious potential repercussions. Many organizations go through lengthy projects and deployments, only to see a small portion of their suppliers go through with onboarding and activation of the portal. As such, only a portion of supplier invoices are affected, leaving the majority in the same inefficient process as before the deployment. 

Similarly, EDI or e-invoicing was a common selection. While EDI is common practice for companies with large quantities of supplier invoices seeking process efficiency, the effect only concerns already electronic invoices being converted into a simpler electronic invoice. EDI does not begin to deal with paper invoices or indirect spend, which results in limited business impact in the end.

For those interesting in further exploring the marketplace of automation solutions, there are plenty of helpful guides for buyers available, as well as a few key considerations we recommend.

First things first: Scope your project. There are lots of solutions available, and the impact on your business varies between each type. While all solutions have their unique benefits, it’s essential to select the right tool that your company will benefit from most, in the current moment. Implementing a supplier portal or dynamic discounting platform may seem like it’ll help you save money down the road, but if your internal AP processes are still a mess, the benefits will hardly be realized.

Vet your vendors. Before reaching out to any potential vendors, do a thorough “background check.” What is their history and focus? Does the solution fulfill the needs you’ve outlined in your project scope? What is their reputation like in the industry? When you do engage with the vendors that match your criteria, don’t be afraid to ask tough questions. What is their speed of deployment like? What is the depth of the solution’s effectiveness?

 

Did any of these takeaways sound familiar to you or resonate with your existing AP flow? Is improving your invoice process with automation on your radar for 2018 and beyond? Download the detailed findings report from our survey with sharedserviceslink for access to even more recommendations for improving your accounts payable process.

Marc Bandini

Marc Bandini

President, Americas

marc.bandini@medius-group.com
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