If you’re only automating part of your procure-to-pay processes, you’re not reaping the benefits that today’s CFO’s are demanding.
CFOs have seen their roles within the organization evolve as the global economy has grown and the reliance on data and analytics has increased. This role change has caused CFOs to seek out solutions that will give them the information they need to contribute to company growth and fulfill its goals. But they also need solutions that will add efficiency, reduce costs, and ensure accuracy and compliance.
A new CFO white paper, “The CFO’s Guide to Automating Procure-to-Pay,” sponsored by Corcentric details the challenges and benefits organizations realize by automating their transactional processes. The biggest challenge is to convince companies to eliminate paper documents and manual processes from their P2P functions. The paper cites an APQC survey that finds that “on average, 58% of invoices are still manually keyed into the financial system.” But automating one segment within the transaction cycle will not provide sufficient benefits and may, in fact, result in less efficiency and greater cost.
The answer lies in a holistic approach.
As Matt Clark, Chief Operating Officer of Corcentric, explains it, “We are at a stage where things are very fragmented,” Clark observes. “There are companies that are strategically addressing the P2P process from an automation standpoint within a given department, but we aren’t seeing many cases where the process is being addressed holistically.” Removing the barriers to success (paper documents and manual intervention) need to start at the very beginning…at the purchase order. The Hackett Group found that companies that automated their end-to-end transaction processes were finding average purchasing costs of $4.80 compared to companies that hadn’t automated, who were left with a considerable cost of $18 per purchase order.
The savings in time and money occurs at each step of the process, from that low-cost PO all the way through to the final e-payment. For instance, best-in-class companies that have automated the entire P2P process are able to handle 90% or more of their invoices with straight-through processing. This eliminates not only the time to process and potential errors of manual handling; it also reduces significantly the number of exceptions. That, in turn, frees up resources to handle more strategic tasks. One of the major innovations that have led to this great step forward in efficiency, cost, and visibility is the availability of cloud-based SaaS (software as a service) solutions.
P2P automation in the cloud – innovative and affordable
In the past, the presumed cost of implementing automated solutions was considered too costly for most businesses so they were willing to stay with the status quo and live with the inefficiencies residing therein. However, the cloud has essentially democratized financial process automation, making it affordable for companies of all sizes. The advantages of cloud solutions include:
- Reduced capital investment
- Less IT involvement
- No hardware requirements
- Low or zero up-front costs
- Faster deployment
- Reduced risks
All of these benefits, from lower cost processing to less IT involvement to reduced capital investment to greater visibility to higher compliance all resonate with today’s CFO. The question isn’t whether you should adopt and implement a holistic automated approach to your P2P processes…it’s a question of “when?”
Download this valuable paper and discover how P2P innovations can drive strategic value for your organization.