Tag Archives: document process automation

Interesting Automation Facts

As more millennials hit the workforce, businesses are forced to adapt their antiquated processes to accommodate for this tech-savvy, educated group of individuals. As a result, businesses now more than ever are investing in automation technology to streamline manual, cumbersome tasks — allowing their staff more time to focus on strategic operations.

But automation technology is nothing new. As it turns out, many people don’t know a lot about the history of automation. From when it started and why, to who has leveraged it — there are many surprising facts spanning the topic.

Whether you are reading this for fun or to find a fact to help enforce a business initiative, here are five interesting facts about automation technology that you may not know.

5 Interesting Facts About Automation Technology

  1. The Greeks used it.
    Although it may seem like a new technology, automation dates back to ancient Greece. The Latinization of the Greek automaton, or “acting of one’s own will”, was first used by Homer. In fact, complex mechanical devices are known to have existed in Hellenistic Greece, including the only surviving example of the earliest known analog computer — the Antikythera mechanism.
  2. There was a Golden Age.
    The period from 1860 to 1910 is known as “The Golden Age of Automata”. In Paris, many small family-based companies of automata makers flourished. These rare and expensive French automata continue to attract collectors from around the world.
  3. There are lots, and I mean lots, of technologies to choose from.
    From 2016 to 2017, marketing automation alone saw a 36% rise in vendors (source: MarTech). Automation has been adopted in every industry, each using it to solve problems unique to their sector. Information Technology (IT), Computer-Aided Manufacturing (CAM), Numerically Controlled (NC) equipment, robots, and Flexible Manufacturing Systems (FMS) are just a fraction of the different technologies currently available.
  4. There’s a type of automation named after Detroit.
    “Detroit automation” consists of moving parts from one machine to another while automatic adjustments are made to the positioning of the tools that shape them. For example, when a block of wood goes into the end of one machine, and a finished wooden doll comes out of another machine.
  5. Esker on Demand, a document process automation technology, has automated the amount of pages equivalent to the weight of nearly 10,000 sumo wrestlers.
    The amount of paper we use today is excessive — it’s been estimated that in the U.S. we use 65,395,000,000 sheets of paper each day. Document process automation lends a helping hand by reducing unnecessary paper consumption while optimizing business processes.

Know of any other interesting facts that should be included? Let us know below in the comments!

Building a Successful Business Case for AP Automation

Accounts payable (AP) and finance managers are aware of the advantages that AP automation has to offer. But it’s never as easy as simply selecting a vendor and implementing a solution. Before an automated AP invoicing project can hit the ground running, one critical hurdle must be cleared — getting buy-in from upper management and other key stakeholders.

The good news is, despite upper management consistently being cited as the biggest obstacle to AP automation, they understand the general benefits. According to survey results compiled by the Institute of Finance & Management (IOFM), the c-suite believes AP would benefit from automation more than any other finance/administrative function.

Check out this SlideShare to learn how to enable AP and finance managers to embrace their responsibility and equip themselves with the knowledge and strategies needed to make AP automation a reality. By better understanding how automated AP invoicing works, AP and finance managers can cite key performance indicators (KPIs) and analytics to more effectively persuade their organization’s top decision makers.

Is Your Sales Order Entry Process Affecting Your Days Sales Outstanding?

 

 

Days Sales Outstanding (DSO) is one of those key indicators that ultimately indicates how streamlined your order management process is — how quickly your product or service gets to your customer and how efficiently they pay you. There are many areas within an organization’s process that can affect this.

I’ve seen companies shave 3-5 days of DSO just by switching from paper/mailed invoices to electronic invoice delivery. However, recently, I’ve been learning just how much DSO can improve even more. One notable area of focus is the sales order entry process — a process that, if not working efficiently, can negatively affect customer service and DSO.

I had the privilege of sitting in on a presentation by Adrian Posteraro titled:  “Overcoming the Negative Business Impacts of a Manual CS Work Environment”. Adrian’s background is quite impressive with 27 years at MEDRAD and heading up Global Customer Support and Global Customer Satisfaction, as well as being responsible for maintaining Business Excellence and Regional Field Service. It’s safe to say that Adrian is more than qualified to speak on behalf of his experiences.

MEDRAD Sales Order Environment Before Esker

MEDRAD previously had a 100% manual sales order entry process, with orders taking anywhere from 7-10 minutes to be fully entered into the ERP system. Aside from the burnout of customer service agents, there were some particular manual sales order entry processes that affected customer service, and, most notably, DSO.

MEDRAD was dealing with backlogged order processing, and missing same-day shipping requests. Order entry errors were creating issues with getting invoices paid, resulting in rebills/re-invoicing. Additionally, the collection department was spending excess time chasing down payments. MEDRAD needed to improve the sales order entry process to mitigate these issues to improve customer satisfaction and DSO.

Sales Order Processing Automation with Esker

What happens when you automate your sales order entry process with Esker? You achieve world-class results! Esker customers consistently see their order entry error rates decline, (i.e., less rebilling/re-invoicing) and backlogged order entry disappear since orders are getting out the door faster and more accurately (i.e., invoices get paid faster).

Which brings us back to square one — improved DSO — which I started out by describing it as one of the key indicators that helps determine how healthy and efficient your order management process is. Now that your gears are turning, what benefits would automating your sales order entry process help your company realize? Leave your comments below!

The 7 Essential KPIs of Accounts Payable [SlideShare]

Even in the digital age, many accounts payable (AP) departments remain inundated with paper and manual-based processes … which seems crazy when a recent study by Aberdeen Group found that 60% of organizations identified eliminating complex and/or risky processes as a top priority for digital transformation.

Process metrics are the key to improvement

Managing all of the paper in your AP department isn’t an easy job, and it doesn’t leave much time to assess your process and find where issues are. But to make improvements, you’ve got to start somewhere — and Key Performance Indicators (KPIs) are a great place.

The 7 essential KPIs of accounts payable

Don’t worry, we’ve got your back. This SlideShare will give you a head start in exploring the effectiveness of your process with the 7 fundamental KPIs of AP. Let’s jump right in!

How can you identify problem areas in your process?

  1. Measure the number of invoices processed per employee (or per month). You’ll notice an impressive boost in productivity after automating your invoice processing.
  2. Calculate the cost of processing each invoice. They quickly add up to an expensive AP process. According to a 2015 PayStream Advisors study, the average all-inclusive cost to manually process an invoice is $40.70. Yikes!
  3. Gauge the timeliness of your payments. Chances are you’re missing out on early payment discounts if you’re having to manually process invoices. That’s more money down the drain.
  4. Measure your captured discounts. Don’t have any? That’s a red flag for bigger problems within your AP department.
  5. Check the level of automation already implemented … if you have any. Sorry, email doesn’t count as automation!
  6. Determine the percentage of duplicated invoices paid. Your supplier may enjoy the extra payment, but we promise your boss doesn’t.
  7. Calculate the percentage of erroneous payments. Payment errors put a large strain on the AP department.

3 Lessons the NBA Can Teach Collections Management About Analytics and the Art of Working Smarter, Not Harder

Exactly one week ago, the National Basketball Association (NBA) tipped off its 72nd season. The league is in a good place. It just had, arguably, its most interesting offseason to date. Young, marketable and uber-talented stars are everywhere. And it’s never been more universally popular.

Still, the NBA is not for everyone.

Trust me. As someone who’s loved the league and the sport itself since childhood, I can say with absolute confidence that the NBA doesn’t just have stubborn factions of non-fans out there — it has true-blue haters.

Case in point: When the question, “Do you watch the NBA?” comes up, a terse “Yes” or “No” would do just fine. However, in my experience, there’s roughly a 50/50 chance that this line of inquiry will lead to an impassioned list of Reasons I Don’t Watch being rattled off.

Shoot, I’ve heard them so many times I might know the list better than the naysayers do:

  • They’re primadonnas who don’t play any defense!
  • The college game is way more entertaining!
  • The referees NEVER call traveling!
  • They whine at every whistle!

Aww yeah, that’s the good stuff. Pure, unfiltered NBA animus.

But I’m not here to convince anyone to watch the NBA who doesn’t care to. More so, I can even admit that perhaps there’s a sliver of truth to those tired grievances (maybe more than a sliver).

The point is, you can dislike the NBA and still learn something from it — especially if your job has anything to do with accounts receivable (AR) or collections management. As unlikely as it sounds, it’s my opinion that today’s NBA teams have a lot of valuable lessons to teach collections management about analytics and the art of working smarter, not harder. Three of them to be exact:

Lesson #1: Define value through data.

In the not-so-distant past, determining an NBA player’s value was based on visceral impression — what’s often referred to as “the eye test.” Watch the game and the best players will reveal themselves, or so the theory goes. Rudimentary per-game statistics (e.g., points, rebounds, etc.) were the only accepted metrics used to support a player’s abstractly defined “value.”

The NBA of today is vastly different. Coaches and front-office execs have largely abandoned the go-with-your-gut mentality for an analytics-driven strategy that drills down into player performance at the micro-level with the aim of quantifying the impact of each action. PER, WS/48, BPM and OffRtg are just some of the new statistical models being used to shed light on qualities that were previously intangible. As a result, players defined as “all-purpose” or “versatile” are now deemed more valuable than, say, “volume scorers” — players who score a lot of points but often do so with inefficient shot selection and/or at the expense of defensive effort.

AR departments haven’t been as eager to jump on the analytics bandwagon. Besides metrics like DSO and Amount Written Off, most teams don’t have a strategic way to gauge performance on an individual or process-based level as accurately as the NBA does. But they could. And it doesn’t have to be overly complex to make an impact. Using an automated collections management solution, for example, financial execs can easily measure KPIs like:

  • Response Time (e.g., # of requests, average response time, etc.)
  • Invoice Received
  • Automated Reminders (e.g., new invoices created, emails sent, etc.)
  • Collection Calls (e.g., # of calls made, # of calls made on time, etc.)
  • Root-Cause Analysis
  • Collections Goal

Lesson #2: Don’t overthink your next competitive advantage.

The most drastic and noticeable change that’s resulted from the NBA’s analytics era has been the proliferation of the three-point shot. Although the three-pointer has been part of the NBA game since the 1979-1980 season, its stigma as a high-risk/high-reward gimmick meant that, for a long time, only a handful of players with exceptional shooting range even attempted it in the course of a game.

Turn on the NBA today and you’ll quickly notice that, not only are three-pointers a more central element of the game, they’re arguably the most important part. In just five years (2012-2017) there’s been nearly a 50% increase in the number of three-pointers taken per game. Why? The NBA data-heads did the math: Even though a three-pointer has a lower chance of going in, on average, it still leads to more total points than taking a two-point shot. Golden State Warriors guard, Steph Curry, has taken this new-school mindset to the extreme with three-point statistics that are, almost literally, off the chart.

What does this have to do with collections management? Three-pointers have been around for decades; despite this, smart NBA teams turned it into a transformational competitive advantage. With automation, collections management teams have a similar, often under-utilized tool at their disposal. If the goal is to get paid faster and drive repeat sales, few technologies have shown the ability to do this as effectively thanks to automation’s ability to:

  • Reduce DSO and invoice disputes
  • Increase staff productivity
  • Lower transaction, finance and admin costs
  • Enhance visibility and forecasting
  • Improve staff and customer satisfaction

Lesson #3: Repurpose talent to be more strategic.

See that rather large man hanging from the helpless rim? That’s none other than Big Daddy Diesel himself, Shaquille O’Neal. For roughly two decades, Shaq was the quintessential NBA center — impressive in size and unstoppable in the paint. However, in today’s NBA, the Shaq archetype doesn’t really exist. And it’s no accident.

By the time Shaq retired from basketball in 2011, the gears of NBA analytics were already in motion. Thanks to a greater emphasis on the three-point shot and player versatility, having a traditional “big man” clogging up the lane was no longer a necessity; it became a disadvantage. Thus, the center evolved from being a player primarily relied on for his size to someone expected to be leaner, rangier and more multi-dimensional.

Similarly, automation within AR processes is a catalyst for enhancing individual and team performance. Often times, the fear is that people will be replaced by technology but this is almost never the case. Billing and collections is something that can’t (and shouldn’t) be fully automated. By eliminating tedious and low-value collections tasks, staff can be repurposed to spend more time on key accounts and new customers. It’s a benefit that Esker customer, Crescent Parts and Equipment, discovered firsthand.

Don’t fight the future …

The last thing anyone wants to be is that rigid purist, fist shaking in the air, clamoring about “the way it ought to be” versus the way it actually is. Ask ex-Lakers coach Byron ScottAsk Charles BarkleyAsk Phil Jackson. There’s plenty of proof, in the NBA world, at least, that the future is something worth fighting for, not against.

It bears repeating: The NBA is not for everyone. Furthermore, AR automation might not be the right fit for every business, either. But hopefully these lessons show that, when approached smartly, the embrace of modern strategies and technologies is a critical component to creating your next competitive advantage.

 

10 Eye-Opening Quotes About the Importance of Customer Service

Customer service is a tough, but important, gig. In a NewVoiceMedia survey, 49% of respondents said they have switched to a different business as a result of poor customer service.

Every year, poor customer service costs businesses billions of dollars. In 2016, they lost a total of $62 billion to be exact. Customer service is extremely important, and these quotes help to explain why.

10 Eye-Opening Customer Service Quotes

  1. Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.
    Chip Bell
  1. In the world of Internet customer service, it’s important to remember your competitor is only one mouse click away.
    Doug Warner
  1. Kind words can be short and easy to speak, but their echoes are truly endless.
    Mother Teresa
  1. Customer service represents the heart of a brand in the hearts of its customers.
    Kate Nasser
  1. Quality is remembered long after the price is forgotten.
    Dale Carnegie
  1. Customer service shouldn’t just be a department, it should be the entire company.
    Tony Hsieh
  1. There is a big difference between a satisfied customer and a loyal customer. Never settle for ‘satisfied’.
    Shep Hyken
  1. It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.
    Henry Ford
  1. Although your customers won’t love you if you give bad service, your competitors will.
    Kate Zabriskie
  1. Courteous treatment will make a customer a walking advertisement.
    James Cash Penney

Customer Service Appreciation Week: How Are You Doing?

 

 

This week is Customer Service Appreciation week and as we all know, customer service can be one of the toughest jobs there is. Dealing with difficult customers and solving problems day after day can be exhausting, but it can also be a rewarding challenge when done correctly. And with studies showing that customer experience will overtake price and product as key brand differentiators in as little as three years, now is the time, more than ever, to make sure your customer service is the best it can be.

But where do you start? You probably have a lot of blind spots when it comes to assessing your own customer service level, because you may see the good intentions behind it instead of the actual results. Plus, customer service can be easy to write off as something you’ll eventually get around to improving when you have the time. But in a time when almost 90% of consumers say they would pay more for a better customer experience, optimizing customer service should be a priority, not an afterthought.

Like most things in business, customer service should have a process — one that is well designed, adaptable, and proven time after time. Falling into the trap of keeping up the same customer service habits you’ve always had, whether they are good or bad, can keep you from realizing the full potential of your customer service department and the positive effect it could have for your company. Sometimes, it’s best to have an outside perspective to shed some light on the potential blind spots you may have.

Check out this quick and practical self-assessment guide from The Art of Service to take a closer look at how your customer service is actually doing. This is just an excerpt from the full guide, but it will help you develop a clear picture of areas that you may be blind to right now, and implement evidence-based strategies that align with your overall goals!

And to all our customer service reps out there — thank you for doing what you do! Your work can often be underappreciated and undervalued, but it continues to play an integral role in how a company relates to its consumers and subsequently, the success of the company overall.

Amerock Hardware Cuts Processing Time with Esker’s Cloud-Based Order Processing Solution

Sydney, Australia — September 13, 2017 — Esker, a worldwide leader in document process automation solutions and pioneer in cloud computing, today announced it is working with Amerock® Hardware, a supplier of decorative and functional hardware solutions, to automate. 

Of the roughly 15,000 customer orders Amerock receives each month, about 6,000 were previously non-automated and required manual intervention. With staff spending 70-75 percent of their day on data entry, the company sought to drive revenue and greater efficiency through an automation solution. Esker’s Order Processing solution was chosen for its ability to help Amerock segment its customer base, improve processing speed, engage in proactive customer service and reduce errors.

Today, 66 percent of Amerock’s non-automated orders are processed through Esker. This has allowed the company to shift its customer service department from a transactional role to a relational one. Processing via Esker has also brought the company greater peace of mind with the ability to track documents at every step of the workflow.

“We’ve been thrilled with the results that Esker has delivered,” said Kathy Wigginton, director of customer service at Amerock. “Instead of focusing on data entry, our staff is able to work on tasks like proactive outbound calling to ensure a positive customer experience and increase revenue.”

Benefits achieved through automation

Since Esker’s seamless integration with Amerock’s SAP® system, the company has experienced significant benefits, including:

  • Reduction in processing time; from nine minutes to less than two and a half minutes
  • Headcount stability even after losing three staff members due to natural attrition
  • Increased staff productivity; more time to spend on value-added activities
  • Improved customer experience; staff is more available to answer customer calls and inquiries
  • Heightened visibility; customisable dashboards display how many orders are coming in, their formats, etc.

In regards to Amerock’s future plans with Esker, Kathy Wigginton added: “We are even considering expanding our use of the Order Processing solution, as well as branching out to other departments like purchasing and accounts receivable.”

About Amerock

Since 1929, Amerock Hardware has set out to offer decorative hardware solutions that inspire, coordinate and help express personal style throughout the home. Today, Amerock is a part of The Piedmont Hardware Group and is headquartered in Mooresville, North Carolina. Their brand focus is to continue to offer outstanding quality, exceptional customer service and innovative design solutions. Amerock offers a complete line of decorative and functional cabinet hardware, bath hardware, hook and rail, and wall plates.

The Business Case for Automating Stress Out of Your CSRs’ Lives

 

 

We all know the feeling. It’s certainly happened to me on more than one occasion.

There you are watching television, flipping through a magazine or checking your online news feed when, suddenly, you come across an urgent message about … [cue loud, menacing music] … THE DANGERS OF STRESS.

Naturally, processing this bit of “helpful” information only makes you more stressed out about how often you’re needlessly stressing out. A slice of deliciously cruel irony if there ever was one.

But let’s be honest: When put in perspective, the stressors of the average person are fairly trivial. Most of us live in general equanimity compared to, say, what a typical Customer Service Representative (CSR) contends with on a daily basis. It’s not a coincidence that the average turnover rate for CSRs in the U.S. is 33% — nearly doublewhat the average turnover rate is among all professions.

These statistics are not lost on today’s forward-thinking companies.

As business leaders shift their focus to more value-added strategies such as customer experience improvement, the link between CSR burnout and business profitability has become painfully clear. After all, it costs a lot of money to find, hire and train new employees. The question is, can anything significant really be done about a department that’s long been synonymous with high-stress and high-turnover rates?

When looking at how order processing automation fits into a customer service environment, the answer appears to be a resounding “Yes.”

Chronic stress & customer service

Although stress can be a positive and motivating force in small doses, the long-term activation of the body’s stress-response system opens the door to some pretty serious health issues: It can alter mood, memory and sleeping patterns; it can contribute to headaches, heart disease, and musculoskeletal disorders; and, it can even affect how a person’s genes express themselves!

Unfortunately for many CSRs, prolonged exposure to stress is all in a day’s work. When they’re not fielding calls from needy customers, CSRs can be found performing the mind-numbing task of hand-entering order data into their department’s ERP system or hunting down a lost document. And, when a mistake is made and the arrows of blame start to fly, you can bet that the biggest targets hang on the backs of CSRs.

These types of stressors are so prevalent in environments that rely on manual and paper-based processes that they’re often just accepted as “part of the deal.” Thankfully, more businesses are waking up to the fact that this is not a sound strategy.

A stressed-out CSR team ultimately leads to larger issues. The big two being:

  1. Higher turnover rates. Included in this is the cost of:
    • Hiring and onboarding a new person
    • Lost productivity in getting new person up to speed
    • Training over a period of 1-3 years, typically
    • Cultural impacts due to constant staff “cycling”
  2. Lower customer satisfaction. Included in this is the cost of:
    • Increasing resources to quell customer contentions
    • Poor customer experience scores; potential loss of existing customers
    • Damaged reputation preventing new business opportunities

Now, I know what you may be thinking: How can automation — something that’s often feared by CSRs as a job replacer — be the key to reducing their tension and avoiding the subsequent fallout? It’s all about equipping them with the right tools to succeed …

4 stress-busting benefits of order processing automation

Too many managers make life harder for their CSRs by setting them up for failure. If a banana was the only tool a team of carpenters had to pound nails with, it’s fair to say that frustration and cynicism would soon follow. The right tools can make all the difference.

Below are the four biggest stress-busting benefits automation offers CSRs:

  1. It reduces repetitive and emotional encounters with customers.
    All of us can picture a helpless CSR being berated by an angry customer over the phone. As stressful as that is, having to manage routine, repeated requests also plays a big role in CSR burnout. It’s key to remember why these interactions are happening in the first place — a customer’s expectations were not met, or, the customer had no other means of performing the desired action. Automated solutions defuse these potentially combustible situations by allowing companies to offer their customers a self-service portal to place orders, track orders and even log disputes. Should a customer want to clarify an issue or ask a question directly, a built-in chat tool enables real-time communication with a CSR. Bottom line:Customers are far less likely to reach for the phone when they’re afforded transparency and control into their orders. That’s a recipe for happier CSRs, happier customers and a healthier bottom line.
  2. It relieves CSRs of unnecessary blame.
    Whether it’s their manager or a customer doing the finger-pointing, being a magnet for blame is huge stressor for CSRs. But humans make mistakes. If manual data entry is part of processing a customer order, at some point, errors are going to occur. It’s the process — not the person — that’s broken. Once again, automation provides a simple and intuitive fix. Machine learning technology embedded in the solution ensures that all the relevant data on an incoming order is extracted and analyzed, regardless of how the order arrived (e.g., EDI, fax, email, etc.). The data is then automatically processed or presented to the CSR for validation and uploaded in the ERP system. Bottom line: Automation eliminates manual data entry — the main source of order processing errors. This relieves CSRs of their burden of blame while avoiding the inevitable downstream costs of righting any wrongs.
  3. It helps CSRs be more organized and proactive.
    Most CSRs would love to get ahead of potential issues and showcase initiative. However, with no centralized system to view and manage all of the orders coming into and out their company on any given day, their hands are often tied. If order volumes spike unexpectedly or a priority customer’s document needs to be retrieved ASAP, the CSR is left scrambling. Here’s the beauty of automated order processing: Best-in-class solutions are equipped with customizable dashboards that display live, visual analytics to help CSRs strategize their day. Whether it’s seeing how many priority orders to validate or even managing open customer issues, CSRs can finally say goodbye to the endless cycle of backlogs and boondoggles. Bottom line: Dashboards empower CSRs, and empowered CSRs are a very low-stress and high-reward investment for any company.
  4. It creates an environment of purpose, fulfillment and upward mobility.
    Career uncertainty is also a major stressor for CSRs, as they can often feel trapped in the daily minutia of performing thankless, low-value tasks. With no clear path for professional growth in sight, their performance inevitably suffers, as does the overall customer experience. Order processing automation addresses this by relieving CSRs from traditional administrative duties so they can perform tasks that are more critical to the business and have greater potential for career-pathing. What’s more, managers can track KPIs in the dashboard to reward those CSRs who are going above and beyond. Bottom line: CSRs who receive recognition and serve a strategic purpose almost always perform better at their jobs and have a lower rate of turnover.

Workplace stress is a serious health issue that we’ve all experienced in varying degrees. And while measures like exercise, meditation and self-affirmation techniques can be employed at an individual level, in specific cases (i.e., CSRs), a more holistic solution is needed. What sets order processing automation apart is its ability to go beyond simply treating the symptoms of CSR stress and actually address the underlying root causes.

So, to all the businesses stressing out over how to solve their customer service problems, relax. Take a deep breath. It’s nothing a little automation can’t solve.

4 Reasons Businesses Must Transform Accounts Payable with Digital Technologies

No matter what future you see ahead for your accounts payable (AP) organisation, one thing is sure: If your organisation is going to succeed in the emerging digital trade and commerce environment, it will need to process transactions more efficiently than ever, have faster access to AP information, and be able to act upon information and identify opportunities more quickly. This will require AP organisations to transform their processes with digital technologies. Accounts payable departments that delay

Accounts payable departments that delay their digital transformation initiatives risk falling behind their peers and putting
their business at a competitive disadvantage in the global business
landscape. This white paper details the growth of digital technologies, the dangers of relying on manual and semi-automated AP payable processes, the benefits of using digital technologies in AP, and how effective change management ensures the success of digital transformation efforts.

Digital Transformation

To compete in the emerging global economy, businesses must transform their corporate strategies to embrace digital. Indeed, digital transformation is a high priority in the boardroom. Eighty-five percent of businesses have an established digital transformation function as a focus for innovation, per Ernst & Young. Eighty-seven percent of businesses surveyed by Ernst & Young are explicitly considering digital transformation in their capital
allocation planning for the next two to three years.
Best-in-class organisations are already digitising their business processes.

The number one digital transformation strategy is to promote collaboration across the organization, as well as between multiple technologies, in support of business processes, Aberdeen Group reports. Organisations also are striving for greater flexibility in their business processes, more intelligent workflows, simplified and more efficient business processes, faster cycle times, and fewer paper-based business processes.

Some of the technologies organisations are using as part of their
transformation initiatives include:

• Automation
• Mobile and cloud computing
• Artificial intelligence
• Robotic process automation
• The Internet of Things

This transformation is evolving financial systems and processes.

Forty-eight percent of senior finance executives believe that digital
technologies will fundamentally change everything that finance does, a recent study from Accenture Strategy reported. CFOs are increasingly relying on digital technologies for security threat intelligence, blockchain, and artificial
intelligence. Buoyed by greater-than-expected returns from these digital investments, CFOs also are incorporating digital into their organisations at large to drive transformational change, Accenture Strategy reports.

Digital transformation is also on the AP department’s agenda. Most
payables departments are investing in process standardisation and
automation, per a recent IOFM study.

The Dangers of Manual Processing

Accounts payable earned a dubious trifecta in IOFM’s recent survey ofcontrollers: Payables topped the lists as the most time-consuming, laborious, and paper-intensive finance and administration function, ahead of activities such as accounts receivable (AR), payroll, tax, and audit and reporting.

In fact, AP received nearly twice as many votes from controllers as the most time- and labor-intensive finance and administration function than the next highest-ranked function.
Efforts to improve AP processes have historically been undermined by the double-whammy of high paper volumes and a lack of automation to facilitate timely payments and working capital optimisation. Most departments have been forced to rely on sub-optimal manual processes, reinforcing the longheld perception that AP is a tactical, back-office function.

Manually processing paper invoices results in:

• Costly and error-prone keying of invoice information
• Lost or misplaced invoices
• Long approval and exception resolution cycles (which result in late
fees and missed discounts)
• Compliance and security risks
• High paper storage and retrieval costs
• Delays uploading data on approved invoices to downstream systems
• Time-consuming supplier inquiries regarding invoice and
payment status
• Difficulty implementing operational best practices

The results of IOFM’s 2016 AP Key Performance Indicators Study illustrate the inefficiencies of manual invoice processing. Of the 69 full-time equivalents (FTEs) employed in AP departments (on average across all locations), all but one FTE performs invoice data-entry.

Manual processes also increase the chance of payment errors. Thirty nine percent of businesses report that duplicate payments and overpayments represent more than 1 percent of their payments. Worse, duplicate payments and over-payments account for 2 percent or more of all payments at 14 percent of the businesses surveyed for IOFM’s 2016 AP Key Performance Indicators Study. A rule of thumb is that a duplicate
payment rate over 0.5 percent indicates weak controls, or that the master vendor file needs a good weeding out, IOFM noted in its AP Department Benchmark and Analysis study.

Additionally, paper processes limit visibility into invoice information — a
top AP concern of 7 percent of businesses surveyed by IOFM. In a paper based environment, critical information is not captured, data is poorly organised, information is not timely, systems are not well-integrated, and decision-makers cannot access key variables. Moreover, it is hard for staff to track the status of invoices and other documents in a paper-based environment and to ensure that the appropriate individuals have approved documents in a timely manner. Paper invoices can sit for days on an individual’s desk, get stuck in inter-office mail awaiting approval, or become lost or misfiled.

Manual processes take significantly longer than their digital counterparts. Thirty-seven percent of organizations surveyed by Aberdeen Group point to the time it takes to complete financial processes, along with the demands they place on internal resources, as a leading pressure they face.