As flagged by Meta CEO Mark Zuckerberg, 2023 is the year of efficiency. Businesses of all sizes must demonstrate greater efficiencies to prove their resilience in the current uncertain economic environment to secure their immediate and long-term future and satisfy their investors.
Unfortunately, it’s still all too common for finance departments to be rife with inefficient manual processes. The mantra of “if it ain’t broke, don’t fix it” doesn’t hold in this instance.
Many companies believe this approach is good enough if their finance function can deliver monthly accounts. However, running your finance department manually takes up significant time, with the resource of highly skilled (and paid) team members being diverted away from higher-value tasks such as analytics and forecasting.
This can also have negative implications for the wider organization, including creating bottlenecks such as barriers to vital purchases and limited visibility of spend, ultimately restricting decision-making and business growth.
These blockers can be overcome by introducing end-to-end finance automation with tools that can quickly and easily be integrated into your organization today.
The Four Finance Efficiency Killers To Look Out For
1. Keying Invoices
Manually keying in invoices is slow, tedious, and carries the risk of human error. Due to being purely process led, this can lead to demotivated staff, ultimately affecting the culture of the finance departments as well as staff turnover.
Additionally, human errors can lead to several other issues, such as overpayments and
duplicate payments. Fixing these issues takes up additional staff resources.
Even if data is entered accurately, reliance on human input will likely slow down processing
times, posing the risk of straining relations with key suppliers.
2. Manual Payment Runs
Running payments manually requires exporting CSV files and/or keying payments data across multiple systems.
This process is riddled with inefficiencies and risks and is a time drain. It’s not uncommon for weekly payment runs to take a staff member up to half a day to complete.
Staff have to sign in and out of banking software across various geographies and, in many
instances, rely on physical security dongles and key fobs to gain access. Due to the increasing trend of remote work and working from home, these practices can restrict who can make payments.
In one extreme scenario, we were even made aware of an access limitation where a CFO was completing payment runs while his wife was in labor!
3. Supplier Onboarding
It’s critical to complete supplier onboarding accurately and quickly. Failing to do so can create procurement issues that can lead to supply chain disruption and an inability to get goods to customers.
Supplier onboarding requires multiple touchpoints, back and forth with your payees. Typically, it’s hard to access everything you need in one go, and it’s a frequent occurrence to discover errors when making first-time payments.
Cumulatively, this adds up to a significant amount of wasted time caused by waiting (and chasing) for email responses and phone calls that don’t get answered.
This is worse for scaling businesses due to geographical expansion, creating a need to take on regional and international suppliers, as well as a growing number of suppliers due to taking on freelancers and contractors to cope with increasing demand.
Before you know it, supplier onboarding becomes a full-time job if you are completing it manually.
4. Vendor Queries
Vendor queries are a pain. Fielding queries from suppliers, freelancers, and contractors asking for payment updates takes significant time. Requests require finance team members to look up the relevant information and then communicate this back to the supplier.
This pulls team members away from more critical tasks, and it’s a testament to finance departments that they get to keep on top of everything else and meet their deadlines when dealing with such high volumes of queries.
What’s The Solution?
Automation can solve all these issues and has many other benefits too.
While digital transformation in business has been taking place for over a decade, many finance departments have been left behind.
CFOs often think they have implemented automation in their companies when all they have done is introduce OCR scanning for invoices. While OCR is a great start, this only addresses one of the four big efficiency killers, and accounts payable automation tools are available that can tackle all of these in one fell swoop.
These tools enhance OCR with powerful machine learning and managed services to reduce errors while using up to three-way PO matching and approval workflows to remove additional manual processes. Once approved, payments are automated, via a range of competitive payment methods, with completed transactions being reconciled back to your accounting software in real-time.
Supplier onboarding is also taken care of. Vendors can onboard themselves via an online portal and intuitive forms. Further efficiencies are built-in with 24/7 real-time visibility into payment statuses, saving your finance team from being pestered with payment queries.
These automation features equate to a happy and motivated finance team who are freed up to focus on value-adding tasks, enabling them to take on the role of a strategic partner across the organization.
