Why it is essential to move to an Integrated, Digitized AP solution

Finance organizations have been modernizing rapidly over the past decade, and AP has always been at the forefront of the trend. In the three years since the pandemic, this transformation trend has accelerated, with the continuation of remote and hybrid working, in particular, accelerating the pace of AP digitization. This trend was notably higher in AP than in other areas of finance, as AP teams sought to capitalize on the efficiencies made possible by automating key workflows such as invoice capture and processing. 

Today, trends like continued geopolitical and economic uncertainty, tightening regulations, and major evolutions in the deployment of enterprise technology (such as the move to wholly cloud-native ERP solutions like the upcoming SAP S/4HANA migration) mean there is a greater need than ever for AP teams to provide flexibility to the whole organization as it vies to adapt to changing conditions. 

As AP’s strategic goals move towards facilitating a location-agnostic, collaborative working environment for both colleagues and suppliers alike, the need for an integrated digital approach to every part of your workflow is essential. In this article, we will explore why. 
 

Accounts payable’s unique challenges 

Moving to remote work forced many AP teams to re-evaluate the way they process invoices. They discovered that processes weren’t as digitized or as automated as they needed to be to succeed in such a transformed work environment: 

• Paper-based invoices are difficult to manage remotely. They are hard to capture and often contain incorrect or missing information. 
• There’s often too many steps or participants in the processing chain to make it efficient or reliable. 
• Processes are often out of date: they don’t follow best practices, aren’t optimized to capture discounts, and are inadequate to detect and protect against fraud. 

Many AP departments are still grappling with challenges like these: in fact, according to a recent Serrala Future of Finance study, 41% say their greatest single challenge is posed by the manual processing of invoices, with 32% citing complex invoice capture processes and the timely approval of invoices as significant impediments to success. 

All of these challenges stem from a lack of digitization, and all bring with them further issues like a lack of visibility into outbound payments, and difficulty keeping track of the invoice processing workflow from receipt of invoice to final payment. 
 

5 ways an integrated digitized AP platform can help you overcome these issues
 

1. Increase visibility and compliance 

AP teams can significantly reduce process cycle time by investing in new digital invoice capture solutions that accurately capture information from unstructured invoices. Today’s technology is much more accurate than legacy OCR solutions and incorporates AI and machine learning to improve accuracy, which is a key requirement for achieving the goal of straight-through invoice processing. 

It is also important to digitize any manual steps still used by AP. Cloud-native solutions that integrate with existing ERP or financial accounting systems, can quickly digitize the entire invoice process flow in a single and globally available solution. This way, AP always has complete visibility and control over every invoice. 
 

2. Automation allows for greater speed and accuracy 

Modern digitized AP solutions incorporate automation functionality that leverages AI and ML technology. This allows your organization to process invoices 24/7 from any location and with minimal manual input. The ability to be “always on” makes automation superior for rule-based invoice processing tasks that can be easily handled by a machine instead of a human. Applying automation to a sub-set of tasks will help AP staff handle more complex problems that arise such as exceptions, vendor queries or audit requests, confident that automated processes will keep running. 

In addition to 24/7 operations, automation can deliver benefits that include cost reductions, scalability, increased processing speed, accuracy and quality, and improved internal controls. The benefits of using robotic process automation (RPA), Artificial intelligence (AI) or Machine learning (ML) are significant, and any solution you invest in going forward must be able to leverage their capabilities. 

According to Gartner, invoice automation has a number of clear use cases for both AI and ML across capture, matching, coding, real-time auditing and validation, and compliance, moving beyond simply accounting for the invoice toward streamlining end-to-end processes and providing advanced analytics that can result in improved contract terms and reduced overall costs. 
 

3. Extend visibility from AP into payments 

Suppliers will often ask when their invoice will be paid, and your teams often won’t be able to give an answer that’s any narrower than a days- or weeks-long window. 

With integrated digital AP solutions, you can answer this question more easily and more accurately, and in doing so create a significant benefit for your organization through improved vendor relationships and outbound cash control.  

With a centralized view of invoices, you have the information you need to accelerate and control invoice processing. You can also analyze the information to optimize the priority and timing of invoice payments. What’s more, extending visibility into payments enables AP to provide suppliers with detailed information when or if a payment is delayed. AP can easily drill down to view the current payment status for a supplier. Greater visibility into payments can also help detect and prevent potential payment fraud earlier in the payment cycle. Possibly fraudulent invoices can be flagged by AP and automatically routed to the correct individual for review before they are sent for payment. 
 

4. Improve the user experience 

Any future AP workflow only makes sense if it can be accomplished anywhere, at any time, and on any device. Partially automated, siloed technologies that can only be accessed from a desktop machine or in the office, are no longer fit for purpose and are stumbling blocks to the user experience your people need to do their jobs well. 

Cloud solutions provide a better user experience (UX) with easy global access from any device, eliminating complex login procedures that slow down users and cause frustration. Secure authentication helps streamline the login procedure for both the user and IT. It also ensures that individuals only see the information they are authorized to see. An improved UI should help users focus on the specific tasks they need to perform and make them faster and more efficient. For example, adding intelligent workflows with suggested next steps and bots that proactively provide answers to common questions, to further increase productivity. 

Improving user experience can also help to address the all-important issue of talent retention, improving “quality of life” for your teams by alleviating the strain of repetitive low-level work and improving their engagement both with their job and with the organization. 
 

5. Real-time data drives better decision-making 

AP teams need real-time data on incoming invoices to pay invoices efficiently and help the business generate more accurate cash flow forecasts. This information can also be used to drive continuous improvement of the AP process, such as by tracking errors to minimize their occurrence and impact, by identifying opportunities to improve process efficiencies, and to improve payment performance by tracking multiple dimensions and determining optimum payment times across all your supplier accounts. 

If your business cannot standardize on a single ERP system, then cloud solutions, with integration into underlying enterprise systems, can make it possible for AP to use a standardized invoice process across multiple locations and business units. For the AP department, a centralized solution provides real-time information to easily identify high-priority invoices that need to be paid immediately or take actions to control outbound payments and preserve cashflows during times of crisis. With detailed information on invoice automation rates, capture sources, current invoice statuses, and end-to-end cycle times, users can make better decisions for AP and the entire organization. 

Serrala can help you transform your approach to AP 

Serrala solutions are designed to create a coherent, end-to-end ecosystem for your invoice-to-pay processes that simplifies your accounting workflows and allows for full working capital optimization.  

To learn more about how we can help you navigate AP digital transformation and revolutionize your approach to accounts payable – and how our solutions can streamline and automate every part of the process for greater efficiency, transparency, and decision velocity, check out our resource pages here or click here to book a demo.   

Disclaimer 

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.