Best practice
AP invoice automation
Paperless AP

Share

Evolving with Automation: How to Scale Accounts Payable for Business Growth

When growth plans are drawn up for a business, accounts payable isn’t always at the top of the list for areas requiring focus.  This, however, is a mistake, as accounts payable is a critical business function in keeping the internal processes flowing smoothly and making sure your suppliers are paid on time, every time. Without the proper technology in place, you may realize one day that inefficient processes in AP that have been overlooked for years are actually holding back your business from the growth it sought originally.

Common AP Pains in Business Growth

Especially in a growing company, there is a long list of pain points for an under-automated AP department. Manual processes produce numerous errors – failed, late, or duplicate payments that take far too long to rectify – and there’s little to no visibility into the process from an optimization standpoint. When late fees and interest charges begin to add up, the AP manager and their staff often shoulders the blame when, in reality, they’re positioned to react to invoices as they come in instead of being able to focus on the end-to-end process and cash management.

Much like a person dealing with an illness, if the symptoms don’t get better on their own, a doctor may need to get involved to intervene with prescribed medicine. The symptoms of a defunct AP process likely won’t heal on their own, and the cost to the company could be dire if they’re left unattended for too long.

The Digital Evolution for Finance will Help Scale Accounts Payable

Over the past decade, there’s been a movement across the business world, particularly in finance, introducing an innumerable amount of technology platforms aimed at optimizing and automating procedures and competencies that historically were performed by human staff. This ignited a cultural shift in organizations that continually forced companies to challenge the status quo to look for ways to improve and gain competitive advantage.

In accounts payable, there was a particularly sizable opportunity for improvement upon the current state of operations. Automation in AP started before many other departments, particularly with EDI transfer of data, though there was still large gaps in efficiency that EDI couldn’t quite handle. Data capture and electronic invoicing was one of the first technologies to disrupt the age-old process on paper-handling in AP. Invoices could be scanned, then matched and approved in a web-friendly application.

The past few years have seen an incredible acceleration of digital transformation of AP with the rise in big data and process analytics. No longer is the automation of AP solely about improving efficiency, but accounts payable automation transforms AP into strategic centers of business insights, directly supporting the company’s bottom line and cash management.

For growing businesses in particular, automation technology is a necessity to scale accounts payable processes and effectively support the business growth and overall success. Manual and inefficient processes are doomed to add costs to the bottom line, slow down growth pace and ultimately risk the company’s competitive position on the market.

A Win for CFOs

In this current age of digital disruption, the CFO has a tricky task of navigating various technologies in order to make their business scale faster and more strategically. Naturally, technology can act as an accelerant for antiquated processes, but CFOs need to choose wisely which technology to invest in to avoid a project failure. Accounts payable automation can fit that bill as a reliable investment. AP is able to do more with the same headcount, cutting manual and paper process costs and freeing up staff to directly support the financial control panel and overall business growth.

And the availability of powerful cloud-based applications for accounts payable make it easy to go live with a new solution without relying on the already over-taxed IT resources. Once the cloud-based systems are up and running, the access to actionable insights for the CFO are immediate, as dashboards are constantly updated and refreshed with the latest data from the AP process and ERP system. 

The operations team now has the visibility over business performance to locate bottlenecks in the invoice process and fix them accordingly, as well as over their supplier network, locating opportunities for dynamic discounts and early payment terms. The suppliers also feel the impacts of an automated AP process, with easy access to updates on invoice status and reliable payment schedules. 

Scale Accounts Payable First, Then Grow the Business

If business growth is on your executives’ plans for the foreseeable future, it’s essential that you get your accounts payable department in order now.  The age of digital evolution of the financial process is upon us, and those organizations that continue to resist modernization will shortly find themselves falling behind their competitors who embrace the opportunity for speeding up the financial engine of the business. 

Too often, companies focus on fix-all projects as part of their growth plans. A large solution with varied focus on different aspects of the business (such as a large supplier portal with elements for e-invoicing and payment automation) usually requires a long implementation project, heavy customization and it doesn’t directly address the inefficiencies causing issues currently. 

The opportunity for setting up business growth plans for success with AP automation are too great to ignore. It’s essential to start the process of gaining control and visibility of your AP and financial processes now, rather than later. Take the time and effort to educate your executive team on the clear benefits and how it fits in to the company’s plans to scale. Need an expert opinion on how AP automation can improve your current AP operations? Reach out to us for a quick chat and learn more about MediusFlow, the leading AP automation solution with 3,000 customers around the globe.

Meredith Grace

Meredith Grace

AP Automation Editor

meredith.grace@medius-group.com