AP Shifts Digital Transformation Priorities to Go Remote
24-08-2021 3 minutes read
In a recent interview, I was discussing the challenges AP departments faced as they started working remotely in 2020. Suddenly, they had to shift their digital transformation priorities to work more efficiently from widely distributed home offices.
While many AP departments had digital transformation initiatives in place before the pandemic. These projects were either part of larger corporate initiatives or were in response to analyst reports which recommended modernizing and automating invoice processing immediately.
According to Gartner Inc “Invoice automation has a number of clear use cases for artificial intelligence (AI) and machine learning (ML) to deliver concrete results across the process. ” AP departments knew that digital transformation was inevitable, but there is evidence that this move to remote work has accelerated the pace of digitization in AP.
According to SAPinsider there was a 22% increase in automation projects between June 2020 and December 2020. The rate of automation was also much higher in AP than in other areas of finance, with 46% of companies with an AP automation solution in place or in the process of being implemented. Similarly, the move to remote work put a renewed focus on the need to manage the supplier payments and outbound cash flows processed by the AP department.
According to SAPinsider, 42% of companies were looking to automate invoice management and/or procurement processes. This makes it the second highest priority for automation across finance in the 2020 report. It is likely that the massive global supply chain disruptions caused by the pandemic caused organizations to shift their priorities towards AP.
Data from the Serrala Future of Finance Survey reveals more about the unique concerns within AP now that they are working remotely. Unsurprisingly, manual processing of paper invoices continues to be the biggest challenge in AP at 41%, and approximately one-third of organizations have difficulty capturing invoices (32%) or ensuring timely invoice approvals (32%).
At the Serrala User Summit, Dan Lyjack of Zurich North America (Zurich) shared an example of how the move to remote work has provided their AP department with new insights into how they process invoices.
„Our AP department already had the abilty to work from home up to 3 days per week when the lockdown began in March 2020. We were fortunate because we were able to remain effective when our offices closed. However, our business process outsourcing partners (BPOs) in India and Poland, did not have the same benefit.
For a period of about four weeks after the lockdown began, our BPOs were unable to process the invoices and payments that we needed to get out to our customers, insurers and brokers. We had to quickly organize a group of people within our AP team to weather the storm and complete the essential tasks that could not be done by our BPOs.
A couple of things came to light as we were doing this. We found some inefficiencies in our processes, and we realized that we could cut out several steps and still ensure compliance. It helped us rethink the way we were processing our payables. As a result, now we're looking at ways to adjust our processes to eliminate redundancies and we’re reassessing what work is done and by whom. Is it a human, a full-time employee, a robot or a piece of technology software? I do envision the way we do things will change based on this experience.„
No one could have accurately predicted how the global crisis would impact AP teams, but we can see from this data that the move to remote work has caused a shift in their digital transformation priorities. AP departments should examine the lessons learned from working remotely to adjust their process improvement priorities and use technology to streamline tasks so they can be more effective in the transformed work environment they will face in the future.
Want to learn more? Watch my latest video on AP Goes Remote.
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