As accounts payable professionals know, numbers don’t lie. They can provide some fascinating insights into the latest, most meaningful finance department trends.
Take automation, for example. According to a survey conducted by Tipalti in conjunction with the Institute of Financial Operations and Leadership, 32% of participants said they used automated accounting software to lessen their loads. Although more than eight out of 10 respondents agreed that improvements in their invoicing and supplier payment systems would foster positive transformation, just under one-third expect to embrace automation in the coming year.
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In other words, accounts payable teams recognize the inherent usefulness of automation. Yet 68% of U.S. companies still spend 10 hours weekly processing payments by hand. Additionally, 26% of accounts payable teams admit that they use no automation whatsoever. This shows a broad disconnect between what workers know they need to do and what’s actually happening. It also highlights the reality that despite all the automation systems, software, and tools available, most finance teams are hanging onto obsolete workflows.
So why isn’t the adoption of automation in finance more widespread? As the feedback suggests, plenty of departments are locked into antiquated, albeit comfortable, systems. Therefore, they may be reluctant to make changes without a push from upper management.
Risking Big Benefits by Looking the Other Way on Automation Finance Solutions
Overall, these trends show considerable gaps in the adoption and advocacy of automation in the finance industry. That’s not good for any business that intends to lead through innovation or digital transformation. It’s also not a great sign for organizations worried about keeping their workers engaged when the Great Resignation and uneven job markets are creating retention and recruitment issues.
For instance, it’s well known that automation doesn’t just enhance operational health. It also enhances the morale and mental well-being in the finance department—right up to the CFO. Office-based, hybrid, and remote teams that have automated solutions don’t stress as much about the possibility of human errors. Instead, they’re empowered to do their best work and concentrate on high-level assignments that maximize their professional strengths.
This isn’t to suggest that the situation will remain stagnant, though. The IFOL member survey revealed that 11% of American finance teams are fully automated. Though that figure might sound small, it’s higher than the global average and an improvement over statistics from a few years ago. That makes it a strong indicator that automation is making its way slowly but surely into the finance departments of companies around the world.
Tips for Incorporating Automation Into the Finance Industry
If you’ve hesitated to bring accounts payable automation into your finance department’s processes, now is the time to take bold steps. This is especially true if your organization is embarking on a digital transformation journey. The pragmatic application of accounts payable workforce automation can help fuel finance digital transformation.
Where should you begin, though? Consider taking at least a few of these steps to start your journey.
Get a better grasp of your team’s manual tasks.
You can’t get the benefits of automation like improved efficiency, higher-level growth, lower risk, and better crisis management if your finance team members input data points manually every week. Nevertheless, you may not know when and where manual tasks are occurring. In fact, you might be surprised to learn that responsibilities you thought happened automatically are taking up quite a bit of staff time.
Block off your calendar and work with your team or team leaders to construct an outline of the workflows that happen within your finance department. Creating a visual record of everyone’s routine workflows will help you see places where a product like accounts payable automation software could relieve your workers of tedious, repetitive responsibilities. When your workers are freed up from those menial tasks, they can perform more effectively and use their abilities in other areas. You may even find that your department can take on additional projects without adding to your head count.
Begin your departmental automation initiatives by eliminating manually processed payments.
What’s the No. 1 most time-consuming function in any finance department? Hands down, it’s the need to process payments manually. Consequently, if you can automate all or most of those processes, you can see instant results and save money. You may also foster stronger loyalty and trust with vendors and other business partners.
In addition to time savings and increased reputation, you’ll also give your company the benefit of transparency. Moving data manually from platform to platform opens the door for inconsistencies, misplaced information, and data corruption. Automating all payments allows you to reconcile everything in real time, monitor cash flow to the penny, visualize cost drivers, curb excessive spending, and avoid non-compliance penalties.
Explore innovative ways to use the data amassed by your automated software.
One of the biggest upsides to implementing an automated data management system in your finance department is that you will have access to incredible amounts of reliable information stored in one location. In other words, you’ll find yourself sitting on a potential competitive advantage gold mine. It may be possible for your new system to parse the available data to inform future corporate-level strategies. Or you may need to find one that integrates with your system to analyze data points and offer recommendations.
Remember: In modern companies, data serves as the lifeblood for developing short-term and long-term business strategies. Why? Data’s objective and factual. When used appropriately, it can shine a spotlight on what you should do to meet your upcoming goals. At the same time, the metrics derived from quality finance department data can show when to stop one initiative or start another. Truly, the possibilities are endless for you and the rest of the leadership team at your organization when you have and can use financial data.
Keep looking for more ways to implement automation into accounts payable procedures.
You’ve developed a strategy for automating some of your internal processes and are collecting rich data. Don’t stop searching for additional ways to automate more of your and your employees’ tasks. You may even want to find out what other finance teams in other businesses are doing in terms of automation to build resilience and promote self-sustaining agility for your own.
In what areas might you find automation useful beyond what you’re currently doing in your finance department? Maybe it’s unraveling a complex procedure. Case in point: If your operations are global, you may find that sophisticated automation software can assist you in paying partners across international boundaries on a variety of platforms and in a range of currencies. Never underestimate the value of feeling confident that global payments are being sent and collected correctly the first time.
Can the everyday to-dos of the finance department become friction points for companies? Sure. But the automation of accounts payable systems can make a huge difference. Why let the pain of payments get in the way of you providing your customers and partners with life-enhancing solutions? Find time to focus on what matters by incorporating finance automation into your workflows.
About the Author
Faye Wang is the regional accounting director at Tipalti, a finance automation software that is the only company handling both accounts payable and global partner payments for high-velocity companies across the entire financial operations cycle and the evolving creator economy. Faye is an active CPA with more than 11 years of accounting experience and more than seven years of management experience in FinTech and SaaS. Faye earned Master of Business Administration and Master of Accountancy degrees while working full-time and studied abroad in the Netherlands for international business.