This article is based on the content covered during the premiere webinar, Prepare AP for the Age of Digital Transformation hosted by Medius in September 2018. Watch the recording here.
The explosive growth of digital solutions aimed at modernising and streamlining business processes has created a diverse realm of vendors, solution models and use cases. In finance, a department traditionally steeped in complex mathematical equations and algorithms, the opportunity for automation to enter the scene was unavoidable and, as expected, financial technology has one of the largest market sizes of all digital solutions.
For accounting, automation provides companies with the chance to remove manual or paper-based processes and create a touchless, digital workflow to handle invoice processing and contract management. Due to the relative ease of implementation and the immediacy of the benefits, accounts payable (AP) automation is no longer a luxury – businesses who continue to operate their AP with manual tasks and fail to go paperless are facing a near certainty of falling behind competition and risking the company’s bottom line.
So how can businesses speed up the process of transforming their AP with automation? By following guidelines of best practices set by thousands of organisations that have already taken the step toward automating their procure-to-pay process and working with a vendor that can provide proven successful case studies and benchmarks, businesses can transform their AP with automation in a matter of weeks, from implementation to go-live, through to reaping benefits of a digital invoice process.
Change the perception of AP
AP is often thought of simply as invoice processing, reacting to debt and bills as they arrive in the accounting department. This is a systemic oversight that often leads to AP staff feeling undervalued and unappreciated. What’s more, it fails to uncover the true value for the rest of the business that lies within AP. Management needs to correct this perception for the business by thinking like the C-suite; like a CEO or a CFO would. Why would or should a CFO want to invest in AP?
If you think of AP like a standalone business, you’ll start to understand the best way to communicate AP’s value. What does AP produce, its “product” so to speak? And how does it get to the end product? What is the length of time it takes to complete the cycle time? Once you know these statistics, you can begin to highlight the areas for improvement to reduce the cycle time and therefore improve profit.
Perhaps even more important than changing the perception of AP from other units of business, is to change AP’s own perception of itself. In order to redirect the AP team, management needs to throw out the old way of thinking and start fresh with a new mission for the team. AP is to focus on managing the company’s cash, not its debt, and focusing on the process, not the invoices.
Eliminate fear of technology
Taking steps toward implementing automation will bring a change to the atmosphere of the business. Suddenly, there’s an electricity of expectations that increase pressure that management and the AP team feels around making the project successful. This is somewhat unavoidable, and positive stress usually ends up benefitting those involved in the implementation process. However, the AP staff may be feeling an uneasiness over the unknown that comes with automation. The thought of automating parts of the AP process often conjures up an image of a robot sitting at their desk, running them out of the job they rely on for income.
While automation will eliminate the need for human involvement in many steps of the AP process, it does not remove the value of having the AP staff involved in value-adding work for the business. It’s up to AP management to ensure that the fears of the AP staff are eased by taking steps to retool the team and collective skillsets to take on more strategic roles within AP, providing valuable data to the c-suite and working with the new technology to drive continued process improvements and benefits for the entire business.
Implement best practices from the beginning
In order to secure immediate and sustainable value, it’s important to move both quickly and intelligently. Look for a vendor that can not only provide best practices with AP-specific experience, but can also connect seamlessly with the existing enterprise resource planning environment. A lengthy and complex deployment will not only delay the benefits of automation, but it could also end up costing the business more money and causing further detriment to the AP process and vendor relationships.
Embarking on digital transformation initiatives may seem daunting, but the initial effort shouldn’t keep businesses from making this important, necessary step. With preparation and best practices in place to provide a foundation for implementing change, the accounts payable department will be well on its way to becoming an efficient, strategic centre of insight for the business.
For more AP best practices, watch this on-demand webinar: Prepare AP for the Age of Digital Transformation
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