There are several key friction points in accounts payable (AP) departments.
No doubt you can name some of them off the top of your head. Most of them aren't unique to AP departments and occur in most modern businesses.
They're the tasks that take up time, money, and leave your staff over-burdened and frustrated.
Common Tasks That Waste Time in Finance
If you were to ask a finance professional what takes up most of their time, nine times out of ten, they'd cite administrative and manual tasks.
Imagine you have a big meeting coming up. Instead of spending time preparing for it — you have to respond to client emails, receive paper checks and invoices, process them manually, and enter them into your systems.
All tasks that need to be done, but that are taking you away from more valuable tasks.
Smartsheet estimates that 25% of the work week is spent on manual tasks. There are a variety of wasteful activities in AP that kill efficiency and are better avoided, and most of them are issues because they are manual and time-consuming.
This is where automation comes into the picture. By automating easy aspects of business operations, employees are free to focus on more meaningful tasks. Businesses overall have already begun to employ automation to save their staff time.
According to Deloitte, half of business leaders are using workforce automation in some capacity. Finance departments that want to stay ahead of the curve should follow suit and empower their AP staff to devote their time to high-priority tasks while automation takes over the mundane ones.
Digital payable platforms make this possible in accounts payable. And as a bonus — they enable remote approval as well! Per Business Insider, enterprises that use digital payable platforms see 73% faster processing cycle times and 81% lower costs.
AP Money Eaters: Expectations vs. Reality
Contrary to popular belief, it isn't unexpected late fees or shipping costs that eat the most money in accounts payable departments. That's not to say those aren't costs that can, and should, be avoided.
But on the whole, the areas that incur the most monetary costs come from things that happen more regularly rather than rarely. A finance department that processes paper checks and invoices daily is incurring all kinds of costs. For example, according to CFO.com, 25% of businesses report that they spend $10 or more to process a single invoice.
Compounding that, Bank of America also estimates that business checks cost an aggregate of $4 to $20. That's not even getting into the extra costs that come with receiving, storing, and sending out paper checks and paper invoices. This can include extra storage space, filing cabinets, and speciality printers.
While unexpected costs are what will get flagged on a report, often they're not the tasks eating the most money in accounts payable. On the contrary, it is the small things adding up as time passes that have the most impact. Thankfully, it's easy to remove these costs by automating payments and invoices and cutting the paper out of your processes.
Watchout: Workload Distribution is Crucial
In today's world, it's all about working smarter — not harder.
Eliminating double-work and antiquated processes with automation is the key way to do that in finance departments. In a recent eBook, PYMNTS found that introducing payment automation would reduce the time spent approving invoices and processing payments by over 30%.
With most departments understaffed and overburdened, it's more important than ever to make their lives easier. Automating payments enables them to better distribute the workload among themselves and concentrate their efforts on more crucial tasks.
For enterprising firms, another thing to consider is that allowing staff the option to work remote will benefit everyone in the long run. USA Today has found that 54% of professionals report that remote working has had a positive effect on their productivity, likely due to:
- Reduced or eliminated commutes
- Fewer meetings
- Decreased distractions
Enabling Remote AP via automation is essential for the future, as it is becoming increasingly apparent that most professionals want to work from home at least part of the time. The ability for your accounts payable (AP) team to handle their workflows and approvals from anywhere puts your company ahead of the competition.
It also widens the talent pool you have to draw from if your staff no longer needs to be within easy commuting distance. To hear more discussion on the future of working from home and business continuity, check out our recent webinar with Esker Inc.
Disparate Systems Leave You at a Disadvantage
If you've ever worked a job that required moving back and forth between multiple systems — you already know why this is a frustrating friction point.
Disparate systems mentally wear down your staff and leave the department open to errors. All it takes is one misread paper invoice, or one typo in an excel sheet, that is later entered into other systems, to cause a domino effect of mistakes that will eat up money and time to fix.
Keeping data in multiple systems — essentially data silos — makes building and analyzing reports a challenge. This doesn't have to be the case. The solution is to invest in digital transformation for accounts payable department.
According to Forbes, digital transformation results in connected processes and workflows that ultimately reduces operational costs while eliminating needles back-and-forth between systems, staff, and vendors.
Why AP Departments Should Lose Paper
There's a common factor in all the friction points talked about above — paper processes.
Paper not only bogs down professionals with mountains of paper they have to sort and manage, it also takes a monetary and environmental toll.
Stacks of paper invoices and checks are a daunting sight that often represents a vulnerability for fraud and misplaced documents. For all these reasons, no touch payments are becoming increasingly popular.
Replacing paper with payment automation:
- Increases efficiency
- Reduces costs
- Eliminates friction points
- Improves security
Transforming your accounts payable department with automation is crucial for the future of your company and for removing friction points for your AP staff.
There are friction points in a variety of business areas. Luckily for accounts payable departments, the major ones can be easily remedied by removing paper and automating processes.
We have helped hundreds of clients digitize invoices and payments — we can do the same for you! Remove friciton points from your processes and keep what works. We can integrate with your ERP or accounting system at no capital expense and with no extra work for you.