March 02, 2017
According to a recent survey from the Institute of Financial Operations (IFO), accounts payable processes have grown in complexity year over year, and most companies expect this trend to continue. Many of the drivers of this increased complexity come from a growing diversity in the channels through which supplier invoices are submitted to a firm, as well as the diversity of ERP and other business systems where invoice data and documents are managed and maintained.
To address these challenges, many corporations have turned to share services organizations (SSOs). In a shared services environment, functions such as accounts payable, accounts receivable and human resources are centralized and standardized, and systems are consolidated, so that processes become streamlined, more efficient and less costly to run.
However, according to IFO’s survey, most organizations perceive SSOs as one (but not the only) source for increased complexity for their AP processes.
As complexity continues to increase for AP processes, Shared Services Organizations will need to rely on accounts payable automation, supported by smart process technology, to continue to streamline and simplify operations while demonstrating ongoing value to their clients.
Here are four ways that accounts payable automation can help SSOs further streamline operations and add value for their clients.
Better Handling of Multi-Channel Submissions
According to IFO, receiving invoices from multiple channels was the biggest contributor to AP process complexity. Today, half of invoices arrive as paper. One third of invoices arrive via email, with 19% submitted via EDI, followed by XML (7%) and Fax (5%). Relying on manual processes to manage their multiple channels can only achieve a certain level of efficiency. Today, smart process platforms that rely on intelligent capture technology can automatically classify, file and index documents from any channel. These platforms, including Artsyl’s docAlpha smart process platform and InvoiceAction application, can identify document types, extract relevant data from scanned paper and digital invoices and automate 3-/4-way matching and exception handling based on standardized AP processes.
Improved Operational Performance
Increased complexity for AP invoices potentially means increased costs for shared services organizations, which either translates into lower profits or reduced price competitiveness.
To continue to increase efficiency, shared services organizations need to understand the productivity of staff, and the effectiveness all the steps in the AP invoice process, including data capture, classification, extraction, validation and the average time it takes to process an invoice.
AP Process automation optimizes the efficiency for each step in the procure to pay process and provides real time reporting and analysis of process cycle times, providing the ability to continually improve the process and eliminate bottlenecks.
Working capital management
According to research from The Hackett Group Automation, AP Automation empowers businesses to capture seven times as much in early-payment discounts (as a percentage of spend) compared to manual processes. Automated AP solutions display Days Sales Outstanding and cash position in a single view, helping CFOs determine when it is best for cash to leave the company. Timely access to this information helps businesses make better working capital decisions, gain visibility into trends related to Cash Conversion Cycles, Days Payables Outstanding and Days Sales Outstanding and gain leverage for contract negotiations.
Audit and compliance
Shared services organizations have diverse audit and compliance requirements. The ability to instantly access images and data of processed invoices makes it easier for SSOs to comply with increasingly complex and diverse compliance requirements. Automation provides visibility and insight into every stage of the accounts payable process, from receipt through validation, approval and posting.
Relying on automated AP solutions, managers have real-time visibility into the status of invoice approval and exceptions resolution, and audit reporting on each review, edit or approval function. Shared service organizations can use historical and current information to identify the source of exceptions or bottlenecks; take manual or rules-based actions, such as approval or escalation; and adjust staff functions to optimize performance.
Enhanced visibility also enables CFOs to gage the financial health of the organization, improves treasury’s decision-making, and provides sourcing teams with data on spend patterns and trends for supplier negotiations.
Join as at the Shared Services and Outsourcing Week Event in Orlando, Booth #A
Artsyl Technologies is a proud sponsor and exhibitor at Shared Services & Outsourcing Week in Orlando, March 6-7. Our booth is located next to the northwest entrance of the exhibit hall.
Visit us at the show, or contact your Artsyl account representative to learn how smart process technology can drive AP automation and boost efficiency for your firm and its clients.