4 Ways Real-Time Automation Strengthens Your Accounting Department
In the world of accounting, efficiency and accuracy is everything. The ability to execute routine finance tasks at scale defines the organization’s future growth and expansion. In the B2B world, as cash flows in and out of business, some of the most impactful insights are generated from your accounts payable (AP) data.
Historically, accountants and controllers have been responsible for promptly receiving, reconciling, and paying vendor invoices. They have also shouldered the responsibility of disputing billing errors and working with vendors to claw back overspend.
But in today’s digital business environment, when AP processes are slow and inefficient, it harms the company’s cash flow, financial health, and decision-making. Additionally, late or inaccurate payments damage vendor relationships and weaken your supply chain.
Naturally, these risks are amplified by the current market conditions.
Finance functions are universally overwhelmed by inflation, a looming North American recession, labor supply, skills shortages, and stress on the global supply chain.
Recent research by OpenEnvoy, the first real-time variable cost AP automation solution, shows that nearly 10% of all invoices are duplicates (after analyzing $500M in customer spend over 12 months, they identified $42,124,360 in duplicate billings!).
We also learned from Ardent Partner that only 41% of businesses have full procure-to-pay automation, and fewer than half of all accounts payable teams use e-invoicing. For an enterprise-level company, this could mean millions, if not billions of erroneous payments flow out of the organization yearly.
Now more than ever, futurist CFOs, finance leaders, and their teams must strengthen controls and visibility into corporate spend. Investing in real-time AP automation technology is the most efficient way to uplevel your AP processes and empower your accounting team.
Here Are 4 Ways AP Automation Immediately Improves Accounting Operations:
Cash flow issues and payment errors – One of the most significant pain points for many companies is managing and boosting cash flow. Accounts payable and cash flow are directly linked, and things like payables fraud and billing errors cause accidental overpayments.
Although you can dispute overpayments with vendors in an attempt to claw back overspend, without the right tools, dispute management can cause costly disruptions to your AP team’s productivity.
The right AP automation system quickly identifies discrepancies between an invoice and its supporting documents and offers dispute functionality to accelerate resolution. With immediate flagging, high levels of visibility, and prompt communication, disputes resolve quickly before payment–which is a win-win for both parties.
Strengthen contractual compliance and enforce spend policies – Ensuring contractual agreements before paying invoices keeps everyone within your supply chain ecosystem happy.
Contracts between suppliers and buyers ensure that both parties receive the benefits they negotiated and agreed upon. But maintaining contractual compliance requires a high level of visibility that most accounts receivable and payable teams lack.
Without technology, the finance team may catch major issues, but ultimately, they will fail to maximize profit. The right AP automation tool will automatically audit vendor invoices at the line-item level and identify areas of noncompliance that cause over- or undercharges within minutes.
According to Gartner, AP real-time auditing directly impacts the organization’s finance, treasury, and compliance as spend policies and contracts are much easier to enforce when automation audits transactions.
Evaluate vendor performance- In times of market volatility and supply chain disruptions, holding your vendors accountable for proper billing is critical.
It is common to accidentally overbill, send duplicate invoices, or mismatch purchase orders with goods received. (Such incidents emphasize the importance of having a fully automated accounts receivable system to ensure you are paid by your customers quickly!).
Invoice inconsistencies can quickly become a major headache for AP teams. Real-time payables data opens the window into supplier billing and can rectify on-going issues. AP automation solutions are excellent for catching invoice discrepancies before issuing payment and tracking supplier billing over time. This gives finance teams the control needed to manage disputes better and work with their providers to improve billing.
Boost employee engagement- The number one way to burn out your accounting team is to keep them stuck behind spreadsheets or combing through an endless stack of paperwork.
Let’s be honest, manual entry and reconciliation are not only time-consuming, but it doesn’t spark the creativity or ingenuity needed to create next-gen finance functions.
Finance leaders trying to improve retention within their accounting department must start by investing in tools that free their accountants from tedious tasks. Additional free time creates opportunities for your accounting team to support other business units and move the organization forward in more impactful ways.
This article was sponsored by OpenEnvoy. OpenEnvoy enables finance teams with visibility, automation, and cash flow solutions. Learn how OpenEnvoy helps prevent wasted spend by visiting https://www.openenvoy.com. Read more at Future FinOps or follow @OpenEnvoy on Twitter and LinkedIn.