This blog comes to us from Dan Andrew, Senior Vice President of Sales at Corcentric.
Accounts payable departments are often stretched to capacity, which can leave them vulnerable when the company starts to ramp up quickly. Are you prepared for growth?
Managing accounts payable (AP) can be stressful at the best of times, but when the company is growing fast, things can spin out of control. If you manage AP for a company that is growing, these steps can help you prepare for a fast-paced future.
EXPLORE TECHNOLOGYAdding team members indefinitely easily addresses a growing invoice volume. But at some point, budget constraints will limit the size of your team. When you reach that point, adding the right technology to your workflow can help. In fact, AP automation technology can help you increase your productivity by 70 percent with no added headcount.1
Key technologies to explore include:
- Invoice scanning with OCR or double-blind keying for extracting data from paper sources.
- Data validation technologies to minimize errors and exceptions.
- Supplier portals that support electronic invoices.
- Automated invoice processing for invoices that match to purchase orders and receipt-of-goods.
- Automated invoice approval that routes invoices to the right people for approvals.
PREPARE YOUR TEAM
As the company matures, it can put new pressure on the AP department to collect and analyze invoice and performance metrics. But with 84 percent of a traditional AP department’s time dedicated to transaction processing, 2 that doesn’t leave much time for analytics and other value-added activities.
Automation technology can give you back more time for analysis and forecasting, but that extra time won’t help unless you have people with the right skills on your team. As the AP function transitions from paper-based to data-driven processes, you will need to enhance your team’s skills from data entry and inquiry management to technical and analytic competencies.
Take a look at the talent on your team and look at ways to help them gain the skills they’ll need as the company grows, such as encouraging them to take introductory courses in data analytics or accounting.
CONVINCE YOUR LEADERSHIP
Of course, before you can make big changes to the technology and talent that support AP, you need to convince the executive leadership to support those changes.
The good news is that they are likely to be a receptive audience: 91 percent of finance leaders want to improve their AP function’s level of automation.3 The bad news is that they are likely to be focused on reducing costs as the company grows, which is why it’s important to make a strong financial case for the investment in technology.
The best way to do this is to compare the cost of automation technology with the cost of adding to the headcount, since the choice is ultimately between these two options. Automating AP processes enables each full-time staffer to process up to 11 times as many invoices per month,4 so the numbers are in your favor. Calculating the cost of each new staff member (including salary, benefits, training, and the space, equipment, and supplies they’ll require) and comparing it to the cost of implementing automation will help you win your executives over.
RETHINK THE FUTURE
As the flow of invoices increases, it’s easy to start feeling overwhelmed. But taking steps to put the right technology and talent in place to support the company’s rapid growth can help you regain control. Growth is a challenge, but it’s also an opportunity.
By finding new and more efficient ways of operating and by turning the information that flows through your department into actionable data, you have an opportunity to elevate your role and your department to a more strategic level as the company matures.