You might assume in this age of widespread digital transformation that manual, paper-based financial processes are a thing of the past. However, thousands of companies still use overly complex manual accounts payable processes.
Meanwhile, the majority of those companies still use error-prone spreadsheets and paper checks.
Surveys show slow adoption of digital processes
The IDC survey revealed 64 percent of respondents still use spreadsheets in some capacity to support payment processes. Mistakes can happen more often, as you know, using spreadsheets than AP software.
Read more: Your Guide to Automating Accounts Payable
Consistent with this finding, a PYMNTS.com survey showed 80 percent of firms use paper checks.
What do all these stats mean?
Manual processes using paper – despite being error-prone, inefficient and slow – remain widespread.
AP pros are overwhelmed, underappreciated
Finance pros also experience manpower shortages.
“In many growing companies, AP professionals are being asked to process greater transaction volumes with the same resources,” according to the IDC report. “This, especially in the case of fast-growing companies, puts an unbelievable strain on the bandwidth of AP professionals, often leading to heightened chances for errors, missed invoices, miscommunication and supplier issues.”
Often there aren’t enough finance pros to handle AP transactions. This can lead to redundant and excessive payments.
“It’s no wonder that, during the height of the pandemic crisis in early 2020, many organizations were left in the dark about much of their current spending profile,” IDC noted. “To put it simply, if you don’t have the tools, you can’t have a holistic view of AP and spend management — in many ways, you’re just trying to feel your way through the darkness.”
The challenges don’t end there. Results of the PYMNTS.com poll showed only 19 percent of respondents view their AP departments as “exceptionally valuable,” while 21 percent say they offer “little value.”
Pandemic raises need for accounts payable software
Of course, it’s important to evaluate all these market stats and assessments through the lens of the global pandemic and the disruptions it caused in many businesses and industries. Despite hesitancies to invest in AP automation, the pandemic has increased the urgency to make this move.
“Prior to the COVID-19 pandemic, some organizations were slow in making the decision to automate AP,” according to the IDC report. “In these cases, the challenge is the status quo. With the pandemic, everyone understands the criticality of automating AP and enabling finance departments to work remotely.”
Seventy-six percent believe smart systems that blend automation, cognitive intelligence and real-time operations are crucial for success, the PYMNTS.com survey finds.
Meanwhile, 64 percent believe more access to data and financial intelligence leads to better understanding of cash flows and cash management. All this generates deeper insights and smarter decisions.
To succeed in 2021 and beyond, a couple points should be re-emphasized.
First, paper processes can lead to inefficiencies, high costs and less security. And yet thousands of companies continue using them.
And second, AP departments should be viewed more favorably. That starts with delivering more value to your business – not just the AP department.
As a finance pro, you’ll benefit by excelling at strategic planning and business advising to drive business growth. Sharping these skills will accelerate your career.
Two steps will help you get there.
Automate AP so you as a finance pro have more time to focus on value-added strategic initiatives. These include analyzing department finances to generate valuable insights for how to improve the company’s cashflows and lower overall AP departmental costs.
Second, focus on financial numbers. The PYMNTS.com survey found the average cost of processing paper invoices totals $14 – versus $2 for automated eInvoicing.
As you know, the core concern of this entire AP automation proposition is money. Does your business want to save money? Of course. Does it want to speed up payments and make fewer mistakes and boost customer loyalty? No doubt.
So consider making this move to AP automation while being mindful of the challenges that need to be overcome along the way.