And the accounts payable (AP) department is a good place to look for inefficiencies.
According to the Institute of Finance and Management (IOFM), controllers rank AP as the most time-consuming, paper-intensive, and labor-intensive finance and administration (F&A) function. Most AP departments must manually handle most of the invoices that they receive from suppliers.
AP also is the F&A function that controllers believe would benefit most from automation.
Not surprisingly, 71 percent of AP leaders say that automation is in their department’s plans. In fact, 44 percent of AP leaders that describe their department as “largely automated” plan to automate.
In many cases, AP departments are automating their entire invoice-to-pay lifecycle – from supplier enablement and invoice processing through supplier payments and reconciliation and reporting.
But there are lots of AP automation solutions out there. Choosing the wrong one can set a hotel or hospitality company back. This article details what to look for in an invoice-to-pay solution.
Benefits of invoice-to-pay automation
Digitizing and simplifying the invoice-to-pay lifecycle provides big benefits to hotels.
- Reduced costs. Some invoice-to-pay solutions capture invoice header and line-item data such as the invoice number, invoice amount, and due date with guaranteed 99.5 percent accuracy. Eliminating manual keying decreases overhead, reduces the possibility of errors, and speeds approvals. Some invoice-to-pay solutions automate General Ledger (GL) coding, reducing data entry and the chance of errors, and potentially accelerating the financial close.
- Improved staff productivity. Invoice-to-pay solutions free hotel and hospitality company staff from manual, repetitive invoice-to-pay tasks. Invoices submitted via email, File Transfer Protocol (FTP) upload, or a supplier portal are automatically retrieved. Invoice header and line-item data is captured and validated automatically. Digital workflows eliminate the need to track down approvers or shuffle emails or paper. Invoice images and data are securely stored in the cloud and instantly available at any time, from any location. Electronic payments eliminate the need to print, mail and manually reconcile checks.
- Faster cycle times. Invoice-to-pay solutions reduce the friction that delays invoice approvals. Invoice data is matched against purchase orders (POs) in the ERP. Matched invoices are posted directly to the ERP, without any human operator intervention. Unmatched invoices or invoices that require review are digitally routed based on pre-configured business rules. Approvers are notified of invoices awaiting their review and alerted when invoices are approaching their due date. Invoices that have not been reviewed in a timely manner are automatically escalated to a manager, based on pre-set business rules. And the AP staff for a hotel or hospitality company have real-time visibility into the status of invoices.
- Enhanced visibility. Invoice-to-pay solutions provide decision-makers with real-time visibility into cash flow, corporate spending, and operational performance. Graphical dashboards display the status of invoices as well as Key Performance Indicators (KPIs). The ability to drill-down into invoice data enables staff to identify trends and uncover the source of issues. Mobile access keeps decision-makers in-the-know while on-the-go. Exports get images and data to downstream systems and processes fast. And ad hoc reporting makes it easy for an AP department to adapt its reporting to changing business requirements.
- Working capital improvements. Automating the invoice-to-pay cycle can help hotel and hospitality companies better manage their cash flow and generate working capital. Finance leaders have real-time visibility into accruals and other cash flow metrics. Hotels and hospitality companies can generate working capital by rationalizing their payment terms. And the rebates earned through card payments can deliver value back to the business.
These are some of the reasons that hotels are deploying full invoice-to-pay automation.
How to choose the right invoice-to-pay solution
Hotels and hospitality companies cannot achieve the full benefits of invoice-to-pay automation without the right solution. Here are key considerations when evaluating invoice-to-pay technology.
1. Vendor enablement. Strong supplier adoption is critical to achieving payback from invoice-to-pay automation. That’s why it’s essential to find a solutions provider with a proven methodology in educating, onboarding, and supporting suppliers. Give extra weight to solutions providers with a track record in rationalizing and optimizing supplier adoption.
2. Technology and integration. The right technology can eliminate friction across the invoice-to-pay cycle. Look for a solution that automates the receipt, capture, and routing of supplier invoices and the touch-free posting of approved invoices to the ERP or accounting software. All paper and electronic invoices should be processed on a single platform. Additionally, find a solution that offers single file upload of approved invoices for payment. And business intelligence tools will help ensure that operations, cash flow and spending stay on track.
3. Global invoice automation. Many hotel and hospitality companies do business abroad. Ensure that prospective invoice-to-pay solutions support multiple currencies and languages. And ask invoice-to-pay solutions providers whether they can support shared services centers.
4. Implementation. A poorly implemented system can undermine your business case for automation. Partner with a tech company with a tested implementation methodology and clearly defined roles, responsibilities and levels of effort for everyone involved in the project.
5. Funding. Cash flow means more to hotel and hospitality companies in times like these. Investigate whether an invoice-to-pay solutions provider supports your company’s credit needs and timing of funding. Inquire whether a solutions provider can push/pull funds. Also be sure your hotel or hospitality company can earn significant rebates on card payments.
Finding a partner that meets these criteria will help ensure the success of your automation project.
Automate your hotel's invoice-to-pay process.
Invoice-to-pay automation is a top priority for hotels and hospitality companies. The right invoice-to-pay solution can help hotels and hospitality companies reduce overhead, boost staff productivity, accelerate cycle times, enhance visibility, and improve cash flow and working capital. Finding a partner that meets the criteria in this blog will help ensure the success of an AP automation project.