Accounts Payable – To Automate Or Not To Automate? Are You Getting Ahead Or Just Getting By?

By Author: Donald Nason
Total Articles: 48
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An interesting report from the Payments Council highlights that as individuals financial planning is the task we are most good at putting off. Apparently only 5 percent of us have the topic at the top of our ‘to do’ list.

This is despite 35 percent of the 2,085 UK adults polled in the Populus study’s The Life’s Long List revealing that saving for a rainy day figures on their daily ‘to do’ list. But it seems that we definitely regard getting down to reviewing pension arrangements, or looking at whether to move bank accounts or change utility supplier, as jobs for ‘manjana’.

And according to the research it’s not because we don’t know how to do these things – almost a quarter of those asked believe they would be reasonably easy to do – it’s just that we don’t want to do them now. The respondents in the survey claim to feel ‘overwhelmed’ by the prospect.
According to the social psychologist, Dr Gary Wood who co-authored the report, this is because “Where finances are concerned we tend to be more reactive, than proactive... In short, we focus on getting-by rather than getting ...
... ahead.”

This ‘if it ain’t broke, don’t mend it’ approach can also overflow into business and an organisation’s systems and procedures – even to the extent of it being an ‘if it ain’t totally broke’ attitude and the proverbial bandages and sticking plaster subsequently keeping together an outdated and inefficient process.

Take automating Accounts Payable (AP) processing. The benefits automation brings to the department and business overall are overwhelming, enabling businesses to:

• not only reduce costs but also improve efficiency
• eliminate duplicate invoices and late payments
• enhance supplier relationships with fast query response time
• take advantage of early payment discounts
• identify bottle-necks and speed-up the payment cycle
• enhance visibility and control across the whole AP process
• and benefit from the rise in e-invoicing.

EU Commissioner for Internal Market and Services Michel Barnier says in the recently released E-invoicing in public procurement: another step towards end-to-end e-procurement and e-government in Europe, "Switching from paper to fully automated invoicing can cut the costs of receiving an invoice from 30-50 euro to 1 euro”.

The UK government is actively promoting the adoption of e-invoicing. In the Information Economic Strategy announced at the G8 Innovation Conference last month, the government states its aim is for central government to use electronic invoicing for all transactions, and to ensure that UK businesses, particularly small and medium sized enterprises, realise the full benefits of e-invoicing.

Sometimes taking the short term view has been the result of Chief Finance Officers’ (CFOs) wariness of the unknown – technology. But it seems that CFOs and finance executives are increasingly realising that technology is growing ever more important to the success of finance departments and are determined to bridge the knowledge gap.

CFO.com recently posted an article, CFOs Open to Improving Tech Literacy, reporting on a survey in which 930 CFOs were questioned, with over four fifths (84 percent) saying that cooperation with their organisation’s CIO (Chief Information Officer) had grown over the past three years.

That’s good news. But crucially, finance departments need also to know that solution providers speak their language too, able to advise on best practice with a full understanding of the issues and processing involved – and without the technical jargon getting in the way.