Partner Post with CIIS: Building the Intelligent Accounts Payable Function
COVID-19 has done more than disrupt the global economy, it has changed the way that people work.
- Most employees now work remotely
- Businesses are adapting to new ways of selling
- Profits and sales have been negatively impacted
- Costs are being cut and investments are being scrapped
- And many businesses are struggling to manage their cash flow
Clearly, COVID-19 is no normal disruption.
Fundamental changes in working are knocking businesses – and some industries – off balance. While some of these shifts in the way business is done are temporary, some are here to stay. For instance, there is no telling when businesses will bring their employees back to the office.
Consider how invoice processing workflows have been impacted by COVID-19. According to the Institute of Finance and Management (IOFM):
- 88 percent of accounts payable departments are working remotely
- 25 percent are concerned about fraud and compliance risks because of disrupted operations
- 22 percent are experiencing a spike in supplier inquiries regarding the status of payments
- 20 percent are struggling to pay suppliers on-time because of operational issues
COVID-19 also has transformed the way that businesses pay their suppliers.
The percentage of accounts payable departments that make at least half of their payments to suppliers via paper check has declined by seven percentage points during the pandemic (from 41 percent to 34 percent), per IOFM. In other words, businesses have accomplished more in moving away from paper checks during the past two months than they accomplished over the past several years.
For a profession that clings to established ways of doing things, working from home and paying suppliers electronically are radical changes for most accounts payable departments. Moreover, many departments made these changes on-the-fly during the pandemic. It is no wonder that 26 percent of accounts payable pros say their current processes have them feeling “concerned” or “overwhelmed.”
But accounts payable is just one example of how businesses are adapting to COVID-19.
Outmaneuvering uncertainty and outperforming those less prepared will require enterprises to accelerate the adoption of agile ways of working while transforming their value chain. Even before COVID-19, disruption was a constant threat to businesses. In fact, Accenture’s research shows most executives feel the pace of disruption has increased over the past three years. And 93 percent say their company’s very existence is jeopardized by operating models that cannot keep pace.
However, in most businesses, back-office systems have not kept pace, leading to 63 percent of executives citing slow decision-making as one of their biggest barriers to corporate agility.
Whether the threat is a novel coronavirus or a nimble digital-born competitor, businesses cannot afford tired back-office processes. The risks of disruption are simply too high. That is why more businesses digitally transforming their operations.
Digital transformation is about:
- Enhancing the experience your business provides to customers and stakeholders
- Letting multi-generational stakeholders interact with an organization using a medium of their choice in a hyper-connected world
- Driving efficiencies across business processes
- Better controlling business information
In short, digital transformation is about building an intelligent enterprise. To stay competitive in this disruptive climate, businesses must transform their tired processes. Unfortunately, most line-of-business applications are anything but intelligent. Across the corporate enterprise, whether it’s onboarding a new employee, approving a purchase requisition, or processing an expense report, businesses have a lot of work to do in making their processes more intelligent.
Consider the way that businesses approve supplier invoices for payment.
Today, nearly two-thirds of businesses manually handle most of the invoices they receive. These stats are even more sobering when you consider that PDF e-mail attachments are the fastest growing way that businesses in the United States receive invoices from their suppliers. It is not uncommon for large businesses to receive most of their invoices from suppliers as a PDF attachment.
Here is the problem: two-thirds of businesses do not have any way of extracting and validating data from invoices that arrive as paper or as PDFs. So, in the case of those PDF invoices, businesses resort to printing them out and processing them as paper! Some businesses print out PDF invoices and rescan them as if they arrived via the mail. Other businesses set their operators up with two monitors on their desk, so they can view e-mailed invoices on one monitor and key the data directly into their enterprise resource planning (ERP) application using the other monitor.
Now is the time to develop and execute a strategy for building an intelligent accounts payable function. One that is focused on revenue growth, profitability, customer experience, and innovation – not manual data entry and paper shuffling. An intelligent accounts payable function can help steer the business through the COVID-19, and prepare it for the future, no matter how it unfolds.
Best-in-class accounts payable departments long ago realized the value of building an intelligent function. The information that flows through accounts payable represents a deep well of untapped financial and business data that can be extracted and converted into intelligence.
In an environment with intelligent automation, accounts payable can provide insights into:
- Cash management
- Outstanding liabilities
- Aging reports
- Payment terms
- Days Payable Outstanding (DPO)
- Fraud and compliance risks
Businesses that take an intelligent approach to accounts payable put themselves in a better position to manage their cash, corporate spending, risks, and operational performance – the kind of things that can drive bottom-line improvements. One-third of accounts payable departments say their ability to harness data and intelligence is critical to drive projects, improve performance, and achieve goals.
Automation alone will not deliver these results. But intelligence will. An intelligent accounts payable function combines:
- Intelligent document capture: Intelligent document capture aggregates invoices in any format and delivered via any channel. The technology then uses optical character recognition (OCR) and full-text recognition to the extracted header and line-item data from invoices. Extracted data is then verified and the invoice is matched against purchase orders and shipping receipts in the organization’s enterprise resource planning (ERP) application. Leading intelligent document capture solutions support multiple currencies and languages.
- Content management: Content management solutions use keyword and full-text search capabilities in conjunction with database lookups and other technologies to put information at the user’s fingertips. Access to content is controlled based on role and other business rules. All activities are logged for auditing and document retention schedules are automated.
- Workflow and collaboration: Workflow and collaboration solutions digitally route invoices and other payables documents based on an organization’s business rules. Content can be dynamically accessed from any PC, laptop, or mobile device for collaboration among internal and external stakeholders. Centralized access to information and automated version controls ensure the integrity of the content. Seamless integration with the organization’s ERP facilitates digital routing of documents, the matching of invoices, purchase orders, and delivery receipts, and access to invoice images directly from within the ERP. Leading workflow and collaboration include business analytics that can be displayed on a configurable dashboard.
Together, these components form the intelligent accounts payable function.
Creating intelligent accounts payable function helps reduce costs, improve productivity, eliminate errors, create more opportunities to capture early payment discounts, and achieve transparency.
Most importantly, intelligent automation positions the accounts payable function as a partner to the enterprise. With the insights provided by an intelligent accounts payable function, businesses are well-equipped to navigate the disruption caused by COVID-19 and digital-born competitors.
Canon Information and Imaging Solutions, Inc. (CIIS), a wholly-owned subsidiary of Canon U.S.A., Inc., brings together Canon’s world-class imaging technologies and information management expertise to assist organizations in achieving their digital transformation objectives. With a focus on innovation, CIIS’s software development and solutions delivery capabilities scale across several practice areas: Business Process Automation – including Procure-to-Pay, Travel Expense, and more; Information Management and Content Capture – including Document Solutions; and Security and Infrastructure Management related to print environments. With expertise in emerging technologies such as artificial intelligence, machine learning, and big data analytics, CIIS deploys its solutions in partnership with leading technology providers and offers comprehensive consulting and professional services that are trusted by organizations of all sizes.