As companies are learning the hard way, in the face of the Covid-19 pandemic, any business processes that depend on human-intervention as opposed to automation, are at a great risk of disruption. Whenever a business experiences a dramatic change in operations due to a natural disaster, government intervention, or the ongoing Covid-19 pandemic, critical back-office workflows including HR, IT, and finance scramble to adapt. Research data illustrates that only half of all companies have a formalised BCP strategy in place, while all companies stated that automation would greatly enhance these strategies.
The Challenges of Manual AP Processes
When it comes to AP processes, 90% of companies still receive paper invoices from their suppliers while 86% of companies still manually key-in the invoice data to their ERP or finance and accounting system. Even under business as usual (BAU) circumstances, let alone being in the middle of a global pandemic, implementing manual AP processes has it’s obvious disadvantages:
– Expensive Processing Costs: Both the direct and associated costs of processing the average supplier invoice is extremely high. Not only is the standard process time, cost, and manually-intensive, the associated costs of human-error, exception-handling, invoice fraud, late payment fees, and service cancellations accumulate resulting in expensive bottle-necks.
– Lack of Transparency: Fragmented and incomplete invoice data leads to a myriad of operational issues including less spend under management, more rogue spending, less visibility, and more confusion, as it’s impossible to optimise costs and obtain actionable insights when you don’t have access to data.
– No Data Integrity: Disseminating paper documents for approval to various locations, manually keying-in lines and lines of invoice data into an ERP or finance and accounting system, and physically matching invoices to a variety of supporting documents such as Purchase Orders (PO’s) and Delivery Notes (DN’s) leads to data that is riddled with errors and transactions that have to be reprocessed.
When a Crisis Strikes!
Now with the ongoing Covid-19 pandemic, not only are these challenges exacerbated, but for many companies, their entire AP processes and workflows have broken down in the face of this crisis. With dramatically changing working environments such as offices inaccessible or closed down, staff working from home or even worse made redundant, resource shortages, and time focussed on daily firefighting, companies with manual AP processes are unable to withstand these challenges. A simple, yet very common example is invoices that are typically mailed to the office are now processed late due to remote working resulting in late payment fees or even service cancellations, putting strain on an already burdened cash-flow and balance sheet. With 60% of companies believing that work from home arrangements have a negative impact on their invoice processing and 55% stating that most invoices will now be paid late, the need for AP automation has never been greater.
AP Automation Supports Business Continuity
The benefits of AP automation cannot be overstated, going beyond massive time and cost-savings, productivity increases, and the uncovering of actionable insights and performance drivers. AP automation provides the ultimate safety-net playing a vital role in helping companies maintain business continuity in times of crisis, such as the unprecedented circumstances we are experiencing now. AP automation empowers finance executives to maintain efficiency while working remotely, ensures this critical finance function runs smoothly even during times of uncertainty, and ultimately keeps your operations up and running.