As businesses plan for 2024 and beyond, automation continues to dominate the conversation around innovation, productivity, and R&D. A 2023 Gartner article says both CEOs and CFOs name technology as one of their top business priorities.
Accounts payable (AP) teams can incorporate automation into their processes. Process automation for payroll, invoice processing, and other related activities can have numerous benefits, from improving accuracy to saving money and time.
Given the size and scale of their operations, it can be crucial for large-market companies to continually assess and prioritize investments in backroom operations, especially around payment management.
Think Beyond ACH
Despite its essential function, the back office hasn’t seen a significant update in decades. Investment in these types of solutions may benefit teams drowning in inefficient, convoluted, or overly-complex tasks.
Traditional procurement that involves any level of manual processing can be costly. An automated procurement system can dramatically lower costs while also providing additional transparency to procurement operations.
Additionally, if a company wants to meet sales growth goals, transactions must increase. Finance teams that cannot process the increased volume will be outpaced and overwhelmed, which can hinder the company’s efforts to scale.
A primary way finance leaders can effectively develop efficiencies and cost savings while better managing cash flow is to eliminate paper from accounts receivable. As a company grows, inefficient processes can eat up time and delay payment. This can put more stress and pressure on staff to manage the process without making costly mistakes. While the Automated Clearing House (ACH) can be a step in the right direction, it can be limited in its power and scope and can quickly rack up banking fees.
For automation to be truly effective, the solution should work seamlessly with existing accounting or ERP systems to automate vendor payments from a single platform.
Why Automation Matters
Today, our daily lives are inundated with automation. Our devices can tell us when to exercise and when to run our appliances. Automation has become essential and ubiquitous for many people, freeing us from mundane tasks and allowing us to live with more flexibility and ease.
Some of the benefits of backroom automation can include:
- Cost: Automated solutions can eliminate the need for paper, saving businesses money while still keeping track of every outbound payment. These savings – or “found money” – can then be put toward other business needs, such as investing in growth or other initiatives.
- Accuracy: Process automation can reduce the risk of human error, improving accuracy for functions such as timesheets, expenses, and billing.
- Integration: Just as many of our personal devices are connected, an automated system that integrates with the cloud can allow for two-way information sharing and better supply chain management.
- Efficiency and speed: Automation can reduce friction and facilitate data exchanges with other businesses, plus provide the functionality to accelerate overall digital transformation.
- Secure and timely payments: The security built into many automated solutions can allow businesses to reconcile payments in real-time for an added layer of protection.
Automation can also help large-market companies tackle the challenges created by a growing shortage of accountants. For those with accountants on staff, automation can provide them a better work/life balance, which can be crucial to retaining them in today's tight labor market.
The Takeaway
CFOs often face challenges, especially as the responsibilities for the role become broader and more demanding. Optimal use of investment capital, greater efficiency, and improved accuracy can be essential, and automation can play a key role. Teams can have more freedom to work on higher-value tasks without sacrificing their day-to-day responsibilities. More importantly, the CFO can spend more time growing and scaling the business and developing long-term strategic initiatives.
