Businesses today are talking about the ‘paradigm shift’ occurring in their industries. An increasing amount of CFOs are considering digitally transforming their finance department.
It’s no longer tenable to continue operating with manual, time-consuming, and paper-burdened payment processes. Thankfully, new technologies make it possible to issue electronic payments in a manner that streamlines workflows, cuts costs, and reduces risk of fraud.
Our COO and founder, Julie Negrete-Anderson, sat down and dove deep into the topic of why it’s time for corporates to stop talking and start digitally transforming with PYMNTS’ CEO Karen Webster — listen to the podcast today to get their thoughts.
Key Pain Points for Digital Transformation
The pain points that would most benefit from digital transformation and automation are often areas full of inefficiencies and wasteful activities. There are a variety of types of wastes in accounts payable (AP) departments you should be on the watch for.
According to a CFO 2020 survey, just over half of businesses have implemented at least some initiatives for finance digital transformation. Don’t fall behind your competition in this arena.
So, you’re ready to digitally transform. Where do you start? The easiest way to begin is by addressing the pain points in your finance department that slow your team down and cost you money.
1) Paper Documents
This is perhaps the most obvious friction point that causes inefficiency. Paper invoices, checks, and documents not only create clutter, they require physical acts of moving them between personnel, entering them into systems, and filing them away. This is a huge drain on time and your staff’s brain power that could be better applied to more high value tasks.
2) Monetary Costs
The second consideration is the cost that comes with paper, both in the form of processing paper invoices and printing checks, and in the cost of labor that these processes require. In fact, one of the frequently asked questions we receive is about the average cost of paper checks and paper invoices and how that number is arrived at. Most finance professionals underestimate how much labor costs are factored into that overall number.
The value in cutting costs is one that everyone understands. And per a study we partnered with PYMNTS on, reducing or eliminating paper processes saves businesses $150 billion a year.
3) Legacy Workflows
The last one is the inefficiencies that are inevitably built into legacy workflows. These workflows are often manual, tedious, and low on modern technology. Smartsheet calculated that 25% of the average work week is devoted to repetitive and manual tasks as part of outdated workflows. Again, this is time that could be better used in other areas on other tasks.
The key to addressing all these pain points? Accounts payable automation and financial digital transformation.
It’s no wonder that, per Business Insider, 44% of businesses are looking to add automation to their payables processes as a way to capitalize on the efficiency and cost-cutting benefits it brings in, while also cutting fraud and increasing access to payment data.
“Sometimes, revisiting how things are being done doesn’t resonate. They’ve [CFOs] got the mindset that, if things are ‘working,’ then they’re OK with it.”
— Julie Negrete-Andersion, Interview with PYMNTS.com
Deciding to address inefficiencies in your finance department is often not enough motivation on its own. Your AP team has learned to live with these pain points, and it’s just how it is — as long as the process works. That mindset can be tough to work around and can prevent you and your company from moving forward with the times.
This is where payment solution partners come in and make the digital transformation process easy and inviting enough to convince companies to make the change. Not sure how to choose your partner? Check out this free eBook about selecting the best payment provider.
How to Ease the Paradigm Shift
It is essential to reframe how your company looks at the goal of digitally transforming your AP department. Consider the costs inherit in your current manual, paper-based, workflows in terms of time and money. According to a recent study, large-scale adoption of electronic payments could collectively save U.S. businesses more than $100 billion annually.
Once the costs that could be eliminated are identified, the next step is to recognize that the transformation process is not necessarily the six or seven-figure project your company thinks it will be. Likewise, it will not take years to be up and running.
In fact, with the right payments system, automating accounts payable has high returns, a low entry point, and a fast turnaround. Our solution offers you the opportunity to keep your existing ERP and accounting systems in place, and optimize your workflows, without letting go of the effective parts of your processes.
As a bonus, digital transformation opens the door to new electronic payment methods such as virtual cards, which will, in turn, open up new a revenue stream for your corporation! Virtual cards empower you to turn spend into profit with 1% cashback on AP spend via monthly rebates.
It’s never been easier for a CFO to plan and execute a digital transformation! Current technology has made the process quick and non-disruptive.
Here at OnPay Solutions we provide a payment automation solution that reduces AP costs while delivering the highest security protections and providing a transparent audit trail of the payment process. Our expert team prioritizes client satisfaction!
If you’re ready to start a conversation about advancing your AP department forward with our help, reach out today.
Interested in learning more? Check out our series of AP automation podcasts: