Accounts Payable (AP) automation is increasingly being used to establish an environmentally friendly paperless AP department. Large businesses are often processing up to millions of invoices annually, and given the high degree of manual, inefficient, high-cost processes, digitally transforming AP can improve efficiencies and cycle times, while also reducing reliance on paper.
Sustainable business processes underscore a company’s efforts to be a good steward of the environment. And, along the way, these efforts are also adding tremendous business value.
Going green equals more greenbacks
Companies recognise there are necessary costs to conducting daily operations, however paper-based processes are expensive in many ways. For example, manual processes can lead to a lengthy closing of the accounting period, potential human error, missed early payment discounts, late payments, poor visibility into the spend and invoice process that results in inaccurate cash forecasting and poor audit controls. Automation, on the other hand, reduces the overall cycle time of approving and recalling invoices.
The use of AP automation solutions can reduce the number of steps it takes to process invoices. With cloud-based automation, data is shared instantly in real time where it can be accessed any time and anywhere for the review and approval of concerned parties. Key data is well -organised in one place, saving managers the effort and time involved to search for paperwork. Companies save on mailing costs and reduce AP bottlenecks.
This increase in visibility and transparency also has benefits in addition to time management as the finance team can pay invoices on time and be able to detect discrepancies quickly. And when visibility is essential to keeping business afloat, having the latest data and insights at the ready can inform and guide the executive business-critical decisions.
While AP automation is key to overall process efficiencies and cost savings, it should be noted that to underscore the commitment to green AP, organisations need to stop suppliers from sending paper invoices right from the start. As a buyer/receiver of invoices, it’s paramount to have the technology in place to receive invoices electronically (pdf, xml, EDI, etc) so that you do not hinder this overall green value proposition.
Empowering the next generation workforce
Much has been written about the expectations of digital native millennials in the world of work. AP automation can not only green operations, it can also help businesses become more attractive to millennials. It can also assist in the transformation of AP from cost centre to profit centre, satisfying millennials’ need for work with purpose.
“Instead of ‘paper pusher,’ think ‘power player,’” says Stephanie Dula, formerly with PayStream Advisors. “Innovative payables operations are utilising automation technology to create more efficient invoice workflows that provide more visibility and business intelligence than in previous decades, which in turn frees up more time for employees to take on higher-level strategic duties. These organisations are able to describe the AP department as a critical hub of revenue generation, a place where savvy, creative finance professionals can come to act more like a detective than a back-office drone, finding new ways to build the bottom line and drive growth.”
Automation means the AP team has more time to focus on analytical work, such as finding opportunities to save money, rather than plodding away at mundane tasks. In this way, digitising AP moves the function’s focus onwards and upwards from operational efficiency to value creation and from data entry to more strategic activities such as supplier enablement and dynamic discounting.
Igniting competitive advantage
Fierce competition in the modern business world means it’s necessary to constantly hone competitive advantage. Investing in technology to go green helps operations to save time, energy and human capital by improving overall efficiency to get work done faster and better.
Investors and analysts are starting to look at the sustainability aspect when evaluating the value of a business. As a result, going green can actually help stock/owner value increase. Going green helps build corporate value today and in the future. Investing in and implementing cutting-edge technologies such as AP automation play a significant role in transforming regular companies into green ones.
As Larry Fink, Chairman and CEO of investment firm BlackRock, stated: “To prosper over time every company must not only deliver financial performance but also show how it makes a positive contribution to society. Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the licence to operate from key stakeholders.”
Look to the cloud
The cloud is helping organisations achieve their green AP ambitions. Today, cloud-based AP automation solutions offer out-of-the-box options including advanced data capture functionality and a rapid implementation process to enable businesses to get started quickly on their digitisation (read: paperless) journey. Thanks to the cloud, businesses can be up and running with AP automation and enable employees to approve invoices remotely in a matter of a few weeks. Given current events, this ability to support AP with a remote workforce is paying huge dividends.
Building corporate value
While being environmentally responsible should be embraced by companies worldwide as a matter of course, there are many added benefits to greening AP operations that pay big dividends. These include cycle time and error reductions, process improvements, workplace empowerment and greater visibility – the latter being of critical importance during these times of business uncertainty.
Going green helps build corporate value today and helps build a greener tomorrow. And implementing strategic technologies such as AP automation plays a significant role in this transformation.