While Finance Department teams have always had to address the difficult task of cost control, this year’s challenge has the added complexity of supporting business recovery. But with AP Automation, that challenge is made all the more manageable, increasing the likelihood of a more rewarding 2021.
The impact Covid-19 has had on businesses has been more than simply significant. According to a survey carried out by Ardent Partners, 58% of businesses confirmed the Covid-19 pandemic has had either a ‘Massive Impact’ (33%) or ‘High Impact’ (25%) on their overall business operations.
Overcoming 2020’s setbacks will require an extraordinary amount of collaborative work and a high level of efficiency. It’s not simply a matter of seamless communication across different departments, but clear communication with suppliers, clients and customers.
Of course, being completely on top of your accounts payable despite the disruption caused by the coronavirus pandemic is also vital if cashflow is to be maintained. And it is in this aspect that AP Automation can help greatly in the recovery and cost control.
But what are the specific ways in which an automated accounts payable system can help a business overcome from the effects of the past 12 months?
How AP Automation Can Boost Business Recovery
Invoice processing is not a cheap undertaking and, for businesses still using the traditional manual processing systems, can represent a significant share of operational costs. However, research has revealed that businesses that have adopted AP Automation have reduced their invoice processing costs by 66%, and process invoices more than twice as fast.
An Automated AP system ensures less potential for error, which has a double set of benefits. Firstly, inaccuracies can cost a business in incorrect payments. And secondly, the time taken to rectify the error and clarify the correct payment can bring its own costs. Greater accuracy helps cut out these unnecessary extra costs, as well as help to maintain positive relationships with suppliers and clients.
Manual systems demand a considerable amount of the commitment from Finance Department staff employed mainly in administrative tasks. But by switching to an automated system, departments cut the needs for this AP-related administrative work dramatically thus freeing them up to dedicate their skills to other more productive tasks. In the Arden survey, some 47% confirmed reducing manual tasks was a key priority.
Because the gathering and electronic storing of data is a key part of AP Automation, the system makes it easier to gain insights into trends and spending patterns. This in turn can help in making more effective decisions, not least in identifying strengths when it comes to negotiating new agreements with suppliers. This was a key priority for almost a quarter of respondent in the Ardent Partners survey, with 22% pointing to improved collaboration with procurement.
Enjoying a strong relationship with suppliers is a critical part of any business recovery and cost control strategy. This down to several reasons, all of which can be achieved when accurate information is easy to access:
If you would like to talk to a Kefron’s team member and learn more about Accounts Payable Automation technology click here.