Chances are, your business is planning for growth. You aren’t alone. Research shows 96% of businesses are planning to grow and expect to hit their peak in the next two years.
As part of your preparations, you’re probably looking at your systems and considering whether they’ll be fit for purpose as you scale. When it comes to looking at AP, you’ll find our latest assessment tool useful. It’s called Is Your AP Process Putting Your Business at Risk?
It guides you through the three phases of the AP process (receiving invoices, the approval cycle, and payment optimization) and asks questions that will help you identify your weak points.
If your business has a paper-based AP process, you’re probably already aware you’re going to outgrow it sooner or later.
Manual processes cause problems when you scale
The typical finance team spends 60% of its time on day-to-day processes – inputting invoices, checking for errors, chasing approvals, and so on. How will the team manage when you start to scale? Will you be able to recruit more people to handle the additional workload? Or will your department grind to a halt because recruitment isn’t an option?
If you’re concerned about your team’s ability to cope, you aren’t alone. Research shows 41% of finance leaders are concerned about staff productivity and 32% are worried about staff turnover and low morale.
AP automation removes manual processes. The average five-person finance team saves 40 hours a week by using an invoice management solution. It means your system is able to scale. It also means staff are freed up to be more proactive and bring more value to the business. Plus the average business using Concur Invoice saves $34,000 every year.
Paper-based processes lack visibility
When your AP process is paper-based you don’t have the visibility you’d like to have. This causes several problems.
When you can’t see your outstanding liabilities in a single place, it’s hard to understand your future cash flow requirements or fine-tune your procure-to-pay (P2P) process.
Then there’s fraud. When time is tight, checking isn’t necessarily as good as you’d like it to be. It’s hardly surprising that more than two-thirds of finance leaders aren’t completely confident their business is protected against fraud.
It’s also worth remembering that better visibility equals a better chance of achieving the growth you want. One of the key findings in research we commissioned was that a cost-conscious approach, with clear visibility into spending across the organization and careful attention to cash flow, supports successful growth.
Slow processes hold back your negotiation ability
In a paper-based process, everything takes longer than you’d like. It often means it’s a race against time to pay an invoice by the due date. In fact, more than eight in ten finance leaders admit to paying supplier invoices late at least some of the time.
This results in frustrating, difficult conversations with suppliers chasing late payments and puts business relationships under strain.
But that isn’t the only problem.
It means you can’t negotiate or take advantage of early payment discounts. Plus if you’re always pushing against payment term deadlines, it means you can’t optimize payment dates to help manage cashflow. And having more control over your cashflow will be critical as you grow.
Top tips to transform your AP process
If you think your AP process is holding you back, find out by completing our assessment tool, Is Your AP Process Putting Your Business at Risk?
As well as getting your results, you’ll also unlock:
• Best practice cheat sheets for each of the three process categories
• A guide for building your invoice policy
• Research comparing the costs and value of manual versus automated accounts payable processes
• A buyer’s guide for evaluating AP automation solutions
Use the assessment now to find out where your business risks may lie.