The Step Beyond Accounts Payable Efficiency
There has been much written about the benefits of automating your Accounts Payable function. Here we will outline some of the obvious advantages that typically relate to efficiency and also benefits that will add incremental efficiency value.
Converting your paper and PDF documents into their electronic equivalents, saving time and improving accuracy for large volume customers is our speciality.
Understanding and aligning your accounting function to your business drivers is key to ensuring executive support and belief in your accounting function. Automating accounts payable is a great first step in achieving this objective.
In speaking with CFOs, I see the typical business drivers having an interdependent relationship that contributes both directly and indirectly to the bottom-line of any organisation.
4 Business Drivers for AP Automation
In speaking with CFOs I see the typical business drivers
1. Improving Efficiency and Reducing Costs
Who doesn’t want to achieve this? Every article you read on automating Accounts Payable starts here. Let’s face it, this is a bit like the lower level of Maslow’s Hierarchy of Physiological needs. If you do NOT achieve this objective, the rest becomes meaningless.
Benefits are gained from:
Reducing the manual effort involved in invoice processing by automating the entry of your supplier’s invoices into your accounts payable system.
Reducing errors by automating and avoiding manual keying of invoices.
Instant access to online invoices, saving the time taken to refer to their paper equivalents
2. Access to Information that Enables Better Decision Making
I have stated this next as it’s tangible and directly impacts your bottom line. Your CEO will love you for achieving this and future proofing your organisation.
Benefits are gained from:
Improved visibility of invoices enabling the provision of accurate cashflow planning by
supplier. This also means you can selectively decide who to pay and when.
By processing invoices faster and more accurately, you can take advantage of early payment discounts, and may even create improved negotiation power with your supply partners.
Timely and accurate data enables better planning and forecasting of inventory needs, which in turn, allow you to order more accurately based on your historical usage (example – a supplier might only have a particular stock item when it is in season. With the data collected, you would have known that the best time to purchase this stock is about 3 months before the sale season hits).
Improved speed of financial reporting and the use of a committal accounting approach This also creates a foundation from which you can further extend the automation process allowing better and faster decision making, such as an online approval process or further analysis of the data.
3. Improved Supplier Relationships/Brand
Some may ask, why is this important? We believe that great supplier relationships are an asset to any organisation for the following reasons:
By automating your accounts payable you are also, by default, helping your supplier relationships improve all round
Provides the added benefit of ensuring the supply of vital inventory and when supplies are needed fast, or in short supply, your chances of gaining these are greatly improved
Improvedbrand makes your organisation more desirable to deal with from a total business perspective. As more prospective suppliers vie for your business, this creates a stronger negotiating power which in turn, contributes to your bottom line.
4. Improved Staff Morale
This is also important for improved productivity. If your people feel they are doing more highly skilled
One of my clients actually had serious trouble with accounts payable staff retention because everyone disliked being that data entry person. As a result, their decision to implement this automation process was very largely influenced by the fact that they would no longer require a person to enter supplier invoices on a daily basis. To this client, the costs involved with hiring and training for the data entry
The benefits here are more intangible but very worthwhile and send a message to all staff that your organisation cares and it’s not just about headcount. It also means as staff leaves, you are able to potentially reduce your workforce based on automating the accounts payable process.
Working towards organisational efficiency for any business
At PNORS, our vision is to provide end-to-end IT solutions to help our clients achieve their desired business objectives.
We work with different businesses from a variety of industries, however, we find that the above benefits are relevant to most. We work carefully with our clients to create incremental value from our solutions ensuring that our partnership is successful over the long term.
Felix Choo, MBA B.ENG – Solutions Consultant, PNORS Technology Group
Having worked in national and senior roles in both Timber and Packaging Industries, Felix has gained significant experience and knowledge in a variety of businesses and business processes. Being a creative problem-solver, he is a great listener and seeks to understand a client’s challenges and difficulties, before strategising and proposing a solution.
Felix is a man of many talents, approaching challenges head on which assists his strategic decision making by turning ideas, thoughts, or even a bit of scribble on a post-it note, into massive action with excellent results. Felix is passionate about working side by side his clients as they grow and he works with them to achieve great things.