Takeaways from the Levvel Research 2019 Payables Insight Report.
Inefficiency. It’s unnecessarily slow — a time waster that saps morale, dilutes resources and is really expensive. But if you’re using a sluggish, cumbersome, error-prone manual process for your payables instead of automation, you already knew all that, right?
SPOILER ALERT: It’s all about automating your payables process.
As the Levvel Research 2019 Payables Insight Report reveals, there are a number of aspects around payables that need rethinking if you are to change the “back-office cost center” designation. There needs to be C-Suite buy-in and sponsorship of an enterprise-wide digital strategy; Procurement and AP teams have to drop any resistance to change and adopt a continuous improvement attitude; and a collaborative, concerted effort has to be made to research and select optimal technology solutions that can meet a range of requirements (now and as needs change).
But, at its essence, the challenge is this:
“Automating accounts payable (AP) processes is a perfect example of this opportunity, as it not only reduces the footprint of a high-cost administrative department, but it also creates an opportunity to generate revenue through increased efficiency.”
Even though North American organizations are improving in their use of automation technology in the back office, there is a big gap compared to the rest of the world. Which means a big opportunity. By overcoming challenges in A/P automation, companies can increase accuracy, save time and money, and gain better control over cash management and finances.
Automation Empowers Efficiency Under Management
“Nimble, strategic operations help businesses achieve a competitive advantage.” Operational excellence isn’t a manual process. In fact, the biggest AP pain point mentioned in the report is manual data entry and inefficient processes. The viscosity inherent in non-automated invoicing receipt and approval flows (and 86% of SMEs and 65% of the mid-market are still manually based) is a major barrier to efficiency, adding days or even weeks to what could be an expedited process.
What’s more, non-electronic invoicing capture and input means all that data falls under the “unstructured” category, meaning it has to be entered into the system by hand. That leads to errors, duplication, delays and a load of resource dedication to the task. Compound that with a manual approval flow (with multiple approvers) and you can see why automation — “a touchless invoice environment” — is critical to getting efficiency under management.
Overall, the improvements that come with AP and payables automation extend from reducing paper to improved visibility, lowering costs, increased productivity, bigger savings, working capital optimization, better compliance and even improving supplier relationships.
Unspoken, but implied, in all this is the perception of AP within an organization. Operational reputation may not top the findings charts in the 2019 Payables Insight Report, but the reality is that moving from a cost center to a financial opportunity generator brings its own advantages. And as finance and the CFO position continue to increase influence and responsibilities across companies, making payables a process-forward change agent will have definite impact.