Rapid growth, promises for innovation from new C-suite hires, and legacy processes usually end up in headaches for the accounting team. Buzzwords alone aren’t enough for meaningful change.
Oftentimes, it’s difficult for companies to let go of legacy processes, despite their best intentions. Manual accounting practices cause several issues for accounting departments: Long payment times, cash flow bottlenecks, and fraud risks have made accounting more about data entry than strategy.
The good news is that there is one core issue that causes all of these problems. And once that’s fixed, AP can experience true digital transformation.
That root problem is a lack of spend visibility.
Without spend visibility, CFOs and AP teams end up sifting through redundant vendor purchases and manual invoices through inefficient processes that take days or weeks. As a result, the company loses time that could have been allocated to high-value activities.
Why Spend Visibility?
More than just another tracking mechanism, spend visibility allows CFOs and other decision-makers to view how money moves throughout an organization in real-time. Automation, which makes transparency and visibility viable, provides accounting departments the opportunity to leverage accurate data about their expenses.
Organizations can achieve spend visibility through the combination of electronic invoicing, digital payments, and automation. First, the combination of digital invoicing and payments provide the ability to get paid in real-time, without the extensive manual processing that saps energy and resources from your accounting department.
But it is the automation aspect—real-time matching, reconciliation, and insight into how customers or vendors interact with your invoices—that provide long-term value.
For AP and finance professionals, understanding how money moves through the organization as a whole and how your employees, vendors, and customers interact with payments allows you to efficiently strategize.
However, finance professionals are faced with the issue of conveying the true investment potential in expense management technology. Other stakeholders may see the initiative to digitize AP as “buying another software” instead of investing in a long-term tool for cost reduction and revenue-building across the organization.
As with any investment into new technologies, there is an upfront cost of time and money to configure your software and train your team. If you can choose quality, best-in-class software, then this is a minimal cost in the long term. Consider this example:
Manual processing for invoices averages around $10 but can be as much as $21, not including correcting errors. Ideally, the best AP automation software should cost only about $2.56 per invoice. Accuracy rates are significantly higher as well, with most topline programs hitting the 99% mark. From this example alone, the significant savings to choose the right technology is clear.
When combined with the high efficacy and accuracy levels of automation, the significant cost reduction provides you and your team with absolute visibility, and thus, control over company spending. And since your team also spends less time on manual data entry tasks, your skilled accounting professionals can now focus on mission-critical assignments.
Strategy through visibility
At the end of the day, accounting teams were not hired to process paperwork, especially in an age of automation. The feasibility of a company’s strategy and business model stems from a healthy financial department.
For that reason alone, visibility can help CFOs present information on how aligned spending is with company objectives. Your accounting team can better determine which vendors are assisting the company to meet milestones, which products are driving the most revenue after subtracting previously hidden costs, and the best way to reorganize the company’s financial structure or budget. In other words, from T&E expense to vendor invoices and incoming payments—your team can see everything from both a top-level and granular perspective.
In addition, expense management automation provides a system to reduce or eliminate risks of fraud and human error. This benefit ensures that you remain compliant and allows you to avoid hefty fines.
The question is not why automation, but when. And that timeframe is rapidly closing for most businesses.
The future of accounting is here
As it stands today, adopting AP automation adds a competitive advantage. But that will not be the case in the near future. To stay ahead of the market, what you do today is critical. Hidden costs due to lack of visibility will continually drain your resources if it is not rectified through automation.
Without spend visibility, it is impossible to make informed decisions about your business and forecast your company’s future. Those who choose not to reinvest in the cornerstone of their business—the accounting department—will hemorrhage revenue, no matter how many sales they close.
The good news is that most automation programs are quick to integrate into your workflow. Top-notch programs can get you started within four weeks and work seamlessly with your ERP system. This means the learning curve is slight—an important consideration when you’re choosing the ideal spend visibility solution.
At Gorilla Expense, we provide a best-in-class expense management system that offers complete visibility on a PCI-compliant platform. Trusted by Toyota, Jim Henson, the U.S. Travel Association, and more, we provide in-depth analytics on an intuitive platform.
But finding the right platform for your company is more important than just finding a platform. Schedule a demo with us today to see if we’re a good fit for your needs.