Why companies need to digitally transform their accounts payable
The tried and true process of putting pen to paper has persisted with accounts payable solutions throughout much of the previous century. As digital transformation has swept through the majority of industries, accounts payable has largely remained the same — even across remote locations where the need is great.
For businesses with teams working across the country or even across continents, it is hard to keep track of all their finances. Many companies still use decentralized accounts payable systems where efficient management becomes a nightmare.
As companies expand across locations, it becomes necessary to centralize their accounts payable into a cloud-based system in order to increase efficiency, visibility and organizational control. Simply put, those who don’t change to the cloud run the risk of falling behind.
Driving growth through efficient operations
For companies expanding to other locations or entities, inefficiency risks slowing down growth to a screeching halt. In order to efficiently grow, a different approach to finances is needed.
One of the main problems with traditional accounts payable is the increased amount of manual tasks and delays that come with outdated pen and paper solutions. When a business is spread out across multiple locations, it becomes a cumbersome process to code, initial, enter, file and mail invoices or payments to the required location. Finance employees end up spending the majority of their time on simple tasks.
A centralized cloud-based accounts payable can optimize this process. Rather than wasting countless hours performing the busy work required to process and pay invoices, this can be easily automated. This frees up time for finance employees to do more important tasks for the company, leaving the grunt work for the computer.
Increasing visibility across locations
As companies grow beyond their primary location, financial visibility becomes an even bigger issue. With decentralized accounts payable, it’s hard to keep track of payments.
Cloud-based systems increase visibility by allowing companies to see where any payment is going at a given time. In an instant, comments, approvals and financial history related to each item in the system are saved and easily searchable for every employee with access to the platform.
With the system acting as a virtual filing cabinet, managers are able to view invoices company-wide in an instant — a clear upgrade over each site having a filing cabinet and having to ask for them to be filed.
The ability to see things happening in real-time at any given location is highly valuable for companies. Managers with access are able to see exactly who they’re waiting on or even if they’re waiting on someone, what the different locations are spending their money on, and just general tracking of expenses.
Auditing is also a much less arduous process. Auditors and property owners with log-in information are able to access the required documents and see payments from past through present.
This also has the potential to reduce accounts payable fraud. The use of an access rights manager ensures that files can only be accessed by those who relate to the files. And in the case of missing money, managers will be able to see where it went by searching through the payment history.
Ease of organizational control
With traditional accounts payable, there is often a lack of control across various divisions, with each acting as an island communicating through the occasional letter, phone call, or email. Management isn’t able to easily see what these locations are doing at any given moment — they get the reports at the end of the day or month, but they're not involved much in the daily process.
Under a cloud-based system, each office is able to interact with different vendors in their specific location, but the head office can still view each of these vendors under one system. This allows each location to keep some of their autonomy while allowing the company to keep themselves better organized as a whole. Employees in the regional areas are able to still feel like they have control of their own business.
While local sites are still able to make micro decisions, the system allows for better communication and visibility about what they're doing by upper management so that every location can be monitored on more important issues.
The world is a vastly different place now than just 10 years ago as digital transformations have swept through most industries. When it comes to accounts payable, migrating to an automated system just makes sense.