Pandemic-led AP workarounds unfit for future of hybrid working, adviser warns

AP departments’ process workarounds to adjust to WFH environment may prove unsustainable in the long term

by | September 3, 2021 | bobsguide

Companies’ AP function needs to adopt more digital and automated solutions as the pandemic laid bare the inefficiencies of manual and paper-based processes – with ‘emergency’ short-term workarounds lacking the control and visibility firms will need in the longer-term horizon.

A survey conducted by Yooz found that a majority of AP departments were impacted by the pandemic – with 44 percent at least “significantly”.

“The shift to remote working is taking a heavy toll on AP departments,” said Mark Brousseau, President of Brousseau & Associates.

“You simply can’t take and adapt these paper- and semi-automated processes to a remote working environment,” Brousseau said. “The shift to remote working, combined with the economic downturn, exposed the fact that manual and semi-automated processes aren’t good enough anymore.”

A lot of the trouble is coming from paper-based processes that could not be adapted to remote working. Only 18 percent of respondents said they had automated invoice processing, and only slightly more (23 percent) indicated they were “fully prepared” for e-invoicing.

Though the delta variant is still keeping many employees at home, most businesses have indicated the future of the workplace will be done through a hybrid working model. Continued remote working will thus require businesses to do more to digitise and automate their AP function.

“Remote working is and will continue to be one of the biggest challenges and opportunities to day-to-day operations,” the Yooz report noted. “One that has accelerated the shift towards digital technologies such as the Cloud and automation.”

Long-term security and compliance

Cloud and Software-as-a-service solutions are now the preferred option for 30 percent of businesses, with many eyeing the security and compliance benefits of the technology.

However, given how quickly businesses needed to adapt last year, many AP department resorted to using email to processes invoices during the pandemic, a practice Brousseau said is unsustainable.

“Email is not secure, it doesn’t provide chain of custody, it doesn’t ensure separation of duties, it doesn’t log the actions taken on an invoice. It also doesn’t provide management visibility into who has an invoice and whether the right person received it. It’s easy to delete invoices ahead of schedule, so there’s no document retention.”

“If you’re relying on email, or other workarounds to route invoices for approval in this remote working environment, you simply don’t have the control or visibility over how things are being done.”

One of the big benefits of digitising is better visibility on cashflow, something which continues to be a priority as both the Delta variant and the uncertainty over economic recovery still loom large.

Overall, the benefits of digitising and processing invoices faster are not only limited to efficiency and data but could be monetary as well.

Brousseau said a majority of suppliers are willing to offer a discount for earlier payments. And while these discounts are usually minimal, in the 2-10 percent range, suppliers offer larger discounts as themselves face cashflow problems, he said.

“[Businesses] can free up cash through early payment discounts and cashback rebates, they can get real time visibility into what’s going on with their invoice data and better understand where their company is spending its money.”

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