Casual industry observers could be forgiven for thinking that that organizations have rid their back offices of inefficient and ineffecitve manual tasks in favor of electronic touchless transactions. Of course, you know better.
The sobering reality is that the back offices of most organizations – even large enterprises – are still inundated with manual tasks. And all those manual tasks are as problematic as ever -- if not worse.
Consider invoice processing. The accounts payable processes at most organizations remain stubbornly manual or semi-automated, per the Institute of Finance and Management (IOFM). Most organizations must manually handle most of the invoices that they receive from suppliers (even those that arrive in electronic PDF format!). In fact, less than one-quarter of accounts payable departments operate in an environment where invoices can be approved and posted to an enterprise resource planning (ERP) application straight-through, without human operator intervention, IOFM notes.
Tellingly, controllers surveyed by IOFM rank accounts payable as the most paper- and labor-intensive finance and administration (F&A) function, and the function most in need of automation, topping burdensome finance activities such as accounts receivable, tax and audit and reporting.
The bottom line: manual processes dominate most accounts payable departments.
As accounts payable leaders know well, manual processes result in higher costs, slower cycle times, more errors and less visibility -- at a time when the function is under pressure to help the enterprise achieve strategic objectives for revenue growth, increased profits and competitive differentiation.
Not surprisingly, accounts payable professionals rank process improvement as a top priority for 2019, ahead of hot-button issues such as compliance, fraud mitigation and payment optimization.
Here's the good news: emerging digital technologies make it easier than ever to transform manual business processes such as invoice processing. And their return on investment is compelling.
These technologies, included in solutions such as Productivity Wrx℠ from IPS, include:
- Intelligent data capture
- Digital workflow
- Robotic process automation (RPA)
- Artificial intelligence (AI)
- Machine learning
Digital technologies transform business processes in accounts payable and across the enterprise.
Consider IOFM’s latest benchmarks for accounts payable efficiency and effectiveness.
Accounts payable departments with a high level of automation:
- Spend less than one-fourth as much as their peers with little or no automation to process a single invoice
- Process more than 14 times as many invoices per full-time equivalent (FTE) as their peers with little or no automation
- Pay more than 90 percent of their invoices on-time
- Have far fewer duplicate payments
- Capture significantly more early payment discounts
Digital technologies not only make accounts payable more efficient and effective, they provide an underlying digital structure that better positions organizations to win in the global economy.
The paperless back office can be a reality for organizations willing to adopt digital technologies.
Is your organization ready to rid itself of inefficient and ineffective manual processes?