It seems counterintuitive to consider and implement sweeping changes in how a business runs while the whole world has been turned upside down by a pandemic. Supply chains have been rattled, vendor relationships strained, employees have been working from home for months, face-to-face meetings are rare -- and no one knows for sure if and when the “new normal” will truly convey a sense of normalcy.
Oddly enough, a crisis like Covid-19 is not only a perfect storm but also an opportunity to finally make changes to business processes, workflows and tools. Digital transformation is the catch-all term for this make-over any enterprise should consider in order to future-proof itself.
While you could fill a small library with advice on what digital transformation is and how to pull it off, the essential ingredients are quite simple. The idea is to transform the culture, the processes and customer experiences by continuously challenging the status quo and experimenting.
Change must affect the way an organization thinks of itself and its business model, as well as the way it runs its operations so as many processes as possible are not only digitized -- meaning switched over from atoms to bits -- but more importantly truly digital, including the architecture, delivery and experience for customers and partners who consume products or services.
Digital transformation, what’s more, is not just a lofty concept for R&D departments and strategy planners. It truly reaches into every corner of a company, particularly the back office and your team handling accounts payable. No matter what size a company is, AP transformation is possible, desirable and affordable. It allows any organization to modernize this vital but often overlooked department from a cost-center to an important contributor to the company’s bottom line.
Some companies have already jumped into the digital transformation of their AP function, leading the way by relying on a best-in-class platform such as Yooz. Born in the cloud, it offers a secure and reliable end-to-end solution from purchase to payment. The benefits of this AP transformation driven by automation and artificial intelligence accrue almost instantly:
Market researcher Ardent Partners offers a succinct view into what finance executives and AP experts view as the important tasks to tackle this year and in the near future in order to successfully pull off AP transformation.
Their latest report, entitled “Accounts Payable Metrics that Matter in 2021,” quizzes more than 200 AP pros about their pain points and priorities. Their take on what matters most:
“AP’s journey in 2021 continues along a path towards visibility and knowledge with nearly half (48%) of AP teams laser-focused on improving their knowledge and intelligence. The drive to improve overall reporting and analytics is a surefire indication of the function’s intent to become a “hub” of intelligence for the rest of the organization. Today, more than ever, the information that AP generates, including views into current liabilities, B2B payment timing, and supplier performance, can be critical in a business climate that demands insights to support real-time decision making.
Additionally, AP departments are continuing to pursue a digital transformation by adopting new technologies or enhancing existing ones by eliminating paper and manual tasks (38%), enabling more suppliers to submit invoices electronically (32%), and implementing AP automation (29%).”
Until most companies get there, they can look to best-in-class players for inspiration and advice. They are the companies that have already deployed the Yooz platform to unlock value with AP automation, ranging from saving time and money to boosting vendor and team satisfaction. And they haven’t let up pursuing their transformation process even as the pandemic rocked the business world.
Successful AP transformation boils down to nine factors that will be improved by going digital.
Number 1: Cost
Automating the workflow from the moment an invoice comes in saves a lot of money, fast. The average cost of processing an invoice in 2021 stood at $10.89, according to Ardent’s research. Automating the process, however, will reduce processing costs almost instantly by 80%.
Number 2: Time
Shuffling paper invoices, getting them scanned and routed for approval puts an unnecessary damper on processing time. In 2021, the average time to process an invoice from receipt through “ready-to-pay” status stood at 10 days. Best-in-class automation with Yooz can cut that time by 74%, unlocking additional benefits such as early-pay discounts.
Number 3: Exceptions
Having invoices pop up as exceptions because some of the data is wrong, the document might be a duplicate or outright fraudulent can gum up the workflow for the entire AP team. Humans have to check and review those documents before they can become a costly paper jam. That’s true for almost one in four invoices an organization receives in a year. Automation, on the other hand, will cut exception rates by almost one-third, also weeding out costly fraud.
Number 4: Hands-Free
The goal of a successful AP transformation is to have humans be involved as little as possible in handling, approving and paying an invoice. Best-in-class companies shine with three times as much touchless processing than their peers, reserving their staff’s valuable time for tasks where they really add value.
Number 5: e-Payments
What’s true for handling incoming invoices also applies to paying them: electronic is the way to go. Companies that are far along in their digital transformation journey are 60% more likely to use electronic payments, saving time and money by avoiding cutting and mailing paper checks.
Number 6: e-Invoices
Who likes to open envelopes, key in invoices or scan faxed documents? The whole process is riddled with potential errors and mishaps. That’s why forward-thinking companies are twice as likely to use e-invoicing as their method of choice. It also makes dealing with vendor inquiries much easier. Ardent found that AP teams spend almost one-quarter of their time fielding and answering supplier questions -- a time-drain that a self-service portal for vendors can solve.
Number 7: Automated Matching
Here’s another time-consuming task that automation can easily handle and streamline. Imagine having the Yooz platform integrate with your existing financial software or ERP system to automatically match an invoice with a purchase order, contract or payment plan. It’s not complicated at all to set up this plug-and-play integration with more than 250 of the most popular software packages, but only a few companies do it. Best-in-class performers are twice as likely to use automated matching and reap the benefits.
Number 8: End-to-End
Automating the AP process can mean many things to many people because there are quite a few steps to the workflow. Yet for most companies it usually doesn’t encompass the whole workflow, from an invoice coming in to payment being initiated. In other words, change leaders can really make a difference. Ardent thinks that procure-to-pay automation “represents the strongest link between the procurement and AP functions, two groups that … can drive tremendous value to the greater organization.” Innovative companies are twice as likely to have this type of full P2P automation.
Number 9: Financial Intelligence
AP Automation doesn’t just speed things up and slash errors and costs. It also accumulates a wealth of data that has tremendous value. The knowledge captured by the AP function can help improve its own operations and support financial and procurement decision-making. This type of live financial intelligence will also help transform relationships and terms with suppliers. 97% of best-in-class enterprises stated in the 2021 Metrics report that they view data and intelligence as an important or critical attribute of how to structure their AP function.
So ask yourself this while you ponder the near- to midterm effects of the current disruptions: How can you use digital transformation to get the best possible return on investment (ROI) for your AP operations?
The experts at Ardent Partners are pretty clear on where the journey is going:
“In 2020, 60% of organizations (up from 55% in 2019 and 52% in 2018) view the AP function as either “very” or “exceptionally” valuable to organizational operations. AP has an extraordinary opportunity to shine in 2021 as it continues to evolve from a back office role-player to a value-adding, strategic enterprise asset.
In the decade ahead, AP groups will increasingly transform their operations into “hubs” of visibility and intelligence, extending the value provided by AP within the enterprise and across the supply base. To maximize the impact of these changes, AP teams must focus on the entirety of their processes, including invoice receipt, processing, and supplier payments.
As a profession, AP is moving into new and exciting arenas; the path forward should focus on how to best support the overall business during difficult times, while making a push for automation to increase its overall impact and positioning itself as a function that can positively impact financial operations and performance.”
A cutting-edge platform like Yooz is the not-so-secret sauce to embark on the journey of AP transformation and see tangible results almost immediately. Onboarding one or multiple locations takes, on average, just one hour, and more than 80% of invoices can be processed right away, without any configuration. Suddenly, your staff can leave menial tasks to a proven combination of robotic process automation (RPA) and deep-learning algorithms that learn from every invoice they see.
Only Yooz has the depth and breadth of experience because it’s been at the forefront of AP automation for two decades. Its platform has processed more than 100 million invoices from more than a million different vendors. With that firepower by their side, AP teams are suddenly free to focus on what they do best: solving exceptions and outliers. Additionally, Yooz lets users be productive from anywhere, getting work done on the mobile device of their choice.
Besides saving time and money and boosting productivity, an organization quickly gains true financial intelligence. This kind of real-time knowledge transforms the AP function into a strategic asset and also enhances the experience of the suppliers and vendors you work with. It’s the opportunity to lay the foundation for deeper and longer-lasting partnerships that are built on more visibility and transparency.
In short, powering your AP transformation with the Yooz platform is a winning proposition -- even more so with the most powerful version of Yooz to date, called Yooz Rising, released earlier this year. Yooz Rising takes AP automation truly to the next level, enabling companies and AP teams of every size to unlock their full potential.