Everybody is now talking about the need for a digital transformation. Companies need to improve digital engagement and corporate productivity to better serve click-to-brick customers and millennials entering the workplace expecting online services and almost instant gratification.
“Digital is disrupting financial models, operations and valuations, and the overall capital agenda at an accelerating pace. If CFOs want to fulfill their agenda of growing, protecting and transforming their organizations, they need to address their organization’s digital readiness and the gaps that exist. And they need to do it with a sense of urgency.” --Ernst & Young
Improving customer engagement will also require you to improve supplier engagement. AIIM (Association for Intelligent Information Management) research among 201 US-based companies found that only 1 in 3 companies have digitized or automated document processing for key financial processes like Procurement, Accounts Payable, and Accounts Receivables. 1 in 3 are using email based routing and approval, which leaves many emails often being lost or forgotten, and 1 in 3 are using paper based processing. AIIM research has found that on average, 44% of invoices arrive as electronic (PDF, Fax, EDI), and 59% of these will still end up as a paper copy, mostly printed prior to manual processing.
AIIM asked the 201 Finance, Accounting, and Procurement professionals in the US to estimate how long it takes to process and pay different types of documents. The most common answer for Accounts Payable was 11-20 days per invoice, and the average answer was 21-30 days per invoice. 18% or almost 1 in 5 said they needed more than 30 days to pay an invoice. Automating this process should reduce the time to 1-5 days.
AIIM also asked the 201 Finance, Accounting, and Procurement professionals to estimate what it costs to process the documents when including staffing costs, distribution costs, etc. The most common answer for Accounts Payable was US$ 21-30 per invoice, and the average answer was US$ 31-40 per invoice. Automating this should cut the processing cost to US$3-5 per invoice.
Noise is intruded for every step in a manual process, and this means increased risks. 68% of AIIM members think that “business-at-the-speed-of paper will be unacceptable in just a few years time”. 46% think the best way to improve the productivity is to remove paper from the business process.
The benefits are real. In order to succeed in this digital world, you must not only face disruption, you need to embrace it. If you're interested in learning more, I recently recorded a video session on this topic. In the video, I cover all you need to know about financial automation – the benefits, the requirements, critical success factors, and more. Check it out and learn how to establish your business case to automate and transform your financial processes today.