Businesses are demanding more from their financial controller. It’s not enough for financial controllers to be a financial scorekeeper.
Financial controllers are expected to help the business:
- Control its financial operations.
- Manage its cash.
- Comply with regulatory requirements.
Control, cash and compliance.
These are the three ‘C’s’ that keep most controllers up at night.
But savvy controllers are resting easier by automating their accounts payable process with digital technologies such as intelligent data capture, workflow automation, robotic process automation (RPA), artificial intelligence, mobile and analytics. These digital transformation solutions automate the centralization, capture, validation, matching and posting of any paper or electronic invoice.
Digitally transforming accounts payable helps controllers manage their three ‘C’s’ in five ways:
#1. Greater operational efficiency and effectiveness
Automating the extraction, validation and posting of data from invoices accelerates the delivery of information to the ERP application, while eliminating manual data-entry and the risk of errors.
Configurable business rules automatically match the header and line-item data captured from invoices with critical information stored in an ERP platform or accounting system, such as the purchase order number, invoice number, invoice date, vendor, quantity and amount. As a result, most invoices can be processed, matched and posted without human operator intervention.
Additionally, digital transformation solutions make it easy for finance departments to adapt their approval and exceptions resolution workflows without professional services or IT involvement.
Some automated solutions also provide a supplier portal that facilitates online collaboration between buyers and suppliers, eliminating the back-and-forth phone calls, e-mails and faxes in a manual accounts-payable environment. For instance, suppliers can receive purchase order information via the portal and submit invoices electronically to buyers. Suppliers also can use the portal to access the status of invoices and payments in real-time, without time-consuming phone calls and e-mails.
#2. Faster resolution of exceptions
There are lots of reasons that an invoice can result in an exception: wrong price, wrong quantity, missing tax amount, missing tax identification number, no requester name, no contact data, no contract and/or purchase order, missing purchase order number, no shipping notice, no order confirmation, net amount exceeds sub-total, invoice total exceeds contracted amount, missing ZIP code in address, incorrect spelling of a company name and no matching purchase order.
Digital technologies make it a snap for finance departments to quickly resolve invoice exceptions.
For starters, automated accounts payable solutions automatically identify fields with missing data or data that doesn’t match what’s in the ERP. Suppliers are automatically notified via e-mail of invoices with missing data; suppliers can provide required data without resubmitting invoices.
In the case of more complicated exceptions, digital technologies such as workflow automation, image archive and a self-service supplier portal, eliminate the back-and-forth phone calls and e-mails required in a manual environment. There is no chance that exceptions will languish on desks or in e-mail boxes awaiting resolution. And digital solutions track all actions performed on an exception.
Automation also makes it easy for controllers to identify and address “problem” suppliers.
#3. Tighter tracking and control
Automation enables financial controllers to enhance control over their accounts payable process by automating tasks such as validating and matching invoice data and posting approved invoices to an ERP, ensuring chain of custody and separation of duties, enforcing level of authority and approval and exceptions handling workflows, and automating image and data retention. With automation, most invoices can be posted directly to an ERP application, without human operator intervention.
And automated solutions log all actions taken on an invoice.
#4. Better working capital performance.
Automated accounts payable solutions can help controllers improve working capital performance.
For instance, the faster invoice approval cycle times that businesses achieve with automation opens the door to more early payment discount opportunities. The Institute of Finance and Management’s (IOFM) AP Department Benchmark and Analysis found that moving to higher levels of automation enables businesses to pay a higher percentage of invoices within the early payment discount period.
Analytics provide controllers with real-time visibility into accruals and corporate spending.
What’s more, paying suppliers with certain virtual card programs enables controllers to instantly extend their Day’s Payable Outstanding (DPO), without changing their payment terms to suppliers.
And the cash-back rebates earned on supplier payments made via virtual card can offset the overhead of the accounts payable department, transforming the function into a profit center for the business.
#5. Enhanced visibility into operations, cash and risks
Automation delivers the real-time visibility financial controllers need to increase the operational performance of the finance department, optimize cash, and ensure compliance, control and security.
Configurable graphical dashboards provide controllers with ready access to actionable information such as outstanding liabilities, on-time payment percentage, corporate spend and trends, category spend and volume, spend-to-supplier ratio, accounts payable value and volumes, accounts payables efficiency and early payment discount capture metrics. With these insights, controllers can determine when it is best to take advantage of early payment discount opportunities, reign in spending or make investments.
A digital archive stores invoices and other accounts payables documents for records retention and audit purposes. Controllers and other authorized users can instantly and securely retrieve information at any time and from any location, via a personal computer, laptop or a mobile device with a web-browser. Configurable administrative controls ensure that only authorized users access stored images and data. And complete tracking of all activities within the system help fulfill audit and compliance requirements.
Each of these benefits is compelling to financial controllers.
Together, they help controllers rest easy knowing that they can better manage their three ‘C’s.’