Spend Matters welcomes this guest post from Finly, a provider of business spend solutions.
Accounts payable involves a lot of challenges, like providing payment approvals on time, budgetary restrictions, ensuring policy compliance and keeping the accounting systems up to date. Organizations reach a saturation level where manually processing all these becomes increasingly tedious and difficult to maintain.
An automated accounts payable system is a great way to overcome these issues and increase effective communication as well as employee productivity. To control your accounts payable, let’s understand the bottlenecks involved in the manual process of accounts payable.
The mantra of tech companies is that modern businesses must have high-powered procurement technology to reduce costs, automate manual tasks, save time, generate insight and allow for more strategic work. While true, the benefits are not the whole story. Chief procurement officers need to know what they are “digitally transforming” and why. The digital CPO must have a vision for how technology is going to improve procurement, why it will be good for customers and what to do next with all the data, insights and “time saved” by intelligent process automation.
Sustainability efforts paired with technological growth continuously affect the way business leaders plan for their companies’ futures. As budgetary and operational plans are considered, thought leaders in the supply chain and procurement space are evaluating sustainability as an asset that can stifle risk and bring about further economic growth.
EcoVadis, a firm that works to provide sustainability risk and performance ratings for global supply chains, recently launched its 2019 Sustainable Procurement Barometer in partnership with the NYU Stern Center for Sustainable Business.
In the first three installments of this Spend Matters PRO series (see Part 1A, Part 1B), we noted that a number of pressing issues are shaping procurement from the outside in, yet chief procurement officers (CPOs) are still primarily concerned with issues set by an inside-out agenda — that is, cost-cutting and supply assurance targets mandated by upper management. Our PESTLE analysis of factors shaping the modern CPO agenda identified broad trends like economic instability, globalization, changing digital business strategies and the need to address corporate social responsibility (CSR) as areas that procurement organizations need to consider if they want to truly tap and manage the opportunities (and risks) offered by external supply markets, starting with sustainability and CSR in Part 2A and Part 2B and digital business strategy in Part 3.
Today we move on to the third item topping the CPO’s outside-in agenda: economic instability.
AP automation capabilities vary dramatically between different software providers, and the capabilities a finance or procurement organization will require to support the automation of AP processes also vary materially, based not only on company size but a broad range of other factors. These include organizational complexity, invoice capturing requirements (e.g., paper, PDF, electronic, etc.), systems complexity, systems integration, industry, EDI integration/support, payment/financing capabilities, treasury integration/working capital management, geography and compliance requirements — to just name a few.
To understand how different providers stack up against these (and other) categories of requirements, the quarterly Invoice-to-Pay SolutionMap Insider report can provide significant insight. And to create a one-to-one map between business requirements for AP automation and vendor functionality capability, SolutionMap Accelerator can dramatically speed up the vendor shortlisting and selection process, even allowing companies to “skip the RFI” entirely.
This Spend Matters PRO series defines AP automation requirements from a functional perspective to put AP, finance and purchasing professionals in the driver’s seat when they evaluate the available supply market for AP automation to fit their needs (either on a standalone basis or as a specific component of broader invoice-to-pay, procure-to-pay or source-to-pay solutions). Click to see our SolutionMap rankings of vendors in each category.
Part 1 of this series investigated core invoicing requirements for AP automation and some of the criteria that Global 2000 and middle market organizations should consider when selecting solutions (i.e., invoicing set-up, paper scan/capture support and e-invoicing).
In Part 2, we turned our attention to an additional set of AP automation functional requirements, including AP process, invoicing validations, workflow, collaboration and integration requirements.
Now, in Part 3, we turn our attention to a final set of AP automation topics: invoicing mobility, invoicing compliance and invoicing analytics.
Cost-savings and strategic advantages hide in every business, and the latest procurement technology can reveal how to find it — in your contracts. In our recent article about spend management, we focused on the flood of spend data that businesses face and the technology that can help make sense of that.
But that technology, like artificial intelligence, is also being used to connect contract data and accounts payable information. That connection offers insights into novel ways to think about contracts that can add profits to the bottom line.
Contracts represent a direct link to suppliers, and that can offer profitable information about supplier activity that can help with contract renewals, a common way to control spend and find savings. But with AI, it gives your business the advantage and reduces risk.
Inefficient invoice processing is standing in the way of companies achieving their bottom-line targets. The cause is manual, paper-based invoicing systems, which lead to late payments, errors, internal process issues, disputes and damaged relationships with suppliers, among other headaches. In a word, “friction.”
It doesn’t have to be this way. New data is showing that digital AP solutions can eliminate these frictions and streamline invoice processing.
“The Payables Friction Index: Barriers to Invoice Automation,” a PYMNTS and Corcentric collaboration, quantifies the issues that businesses experience in processing supplier payments and explains how automated solutions can help ease the pain.
Overhauling how your business manages its supply chain is a daunting task, but a good starting point is to look at a segment of the supply chain and focus on three tips: clean your data to improve visibility, automate supplier collaboration and consider what new technology is available to you to make these things happen.
The specific part of the supply chain that many organizations would benefit from focusing on is the “first mile” — when businesses set a solid foundation to work with suppliers, engage services and order direct materials. In our previous article, “How ‘first-mile’ flaws hinder last-mile success,” we discussed the problems that snowball, add to risk and cut into margins.
Now, let’s dig into the top three tips for addressing these problems:
In our last installment of this CVM series, we highlighted a graphical framework to depict how commercial value management is about extending CLM into a more commercially enabling role in all enterprise areas where contracts (and value promises) are stored.
In this next installment of this series, we’ll highlight these areas and how to unlock some of that value for the benefit of the firm — and procurement.
Let’s briefly look at some of these areas to see how extending contract management to broader CVM approach is a practical way for procurement to get aligned with other areas (and with itself).
When a business upgrades a department like procurement or finance, the goal usually involves cutting costs, improving that one department and using data to assess their past performance. But that version of business is fading quickly as automation, digitization and changing trade force companies to be forward-looking and dynamic in their use of data.
That future also promises much more visibility for companies and consumers to be empowered and make better decisions.
But in the present, executives must prepare for the digital transformation of business operations and plan for more radical change across the whole enterprise. This will require them to figure how best to invest in technology, reshape their workforce and create bold visions of the future.
Last week, Procurement Leaders announced it had been acquired by World 50, a somewhat “hush hush,” invite-only executive membership organization that does not do much if any PR (although we personally get a chuckle out of the “invitation only, private club” model in a commercial enterprise). From sources we have spoken with, we can best describe World 50 as a Fortune 500 version of YPO or Vistage, with member groups specific to certain functions (e.g., marketing/CMOs, HR, etc.) In contrast, Procurement Leaders is a conference business that leveraged its core success to add other membership-based subscription components.
The first installment of this two-part Spend Matters PRO and Nexus brief provides insight into Procurement Leaders and World 50, and the combination of two providers. The second installment provides analysis and recommendations for executives (in procurement) who are current Procurement Leaders members (or are contemplating membership) as well as Procurement Leaders sponsor (provider) analysis. Finally, we list alternative models/providers that organizations may want to consider.
This research brief is based on public information sources, primary research and interviews.
In today’s hyper-connected, data-driven business world, the amount of available data is overwhelming. And while the concept of “big data” has been around for more than a decade, many companies are still lagging when it comes to using that data to make decisions. Insight-driven organizations (IDO), according to a recent Deloitte survey, are those that have made a transition to relying on data and analytics, instead of intuition, to make many of their business decisions. Technologies, led by artificial intelligence (AI), have the ability to support these insight-based decisions, giving companies a competitive advantage when they integrate them.
