With Staffing Challenges And Remote/Hybrid Work Here to Stay, Finance Leaders Embrace Back-Office Automation
As the near-term economic outlook continues to shift between partly sunny and partly cloudy or worse, many businesses are taking a conservative approach and focusing more on efficiency and savings vs. growth and investment. For finance leaders, that means finding new ways to operate more profitably and get more control over cash flow.
At the same time, finance teams that need qualified staff to address these concerns are facing difficulties. In a recent survey of over 1,000 finance professionals by MineralTree, a Global Payments company, almost half (45%) of the respondents were anticipating hiring challenges and delays. Additionally, despite the wishes of many CEOs, finance teams continue to work remotely. The same MineralTree survey found that 68% of AP work environments are hybrid or fully remote, with that number expected to increase to 72% in 2024.
For businesses with manual AP processes, these trends create bigger challenges and inefficiencies. AP teams say they are bogged down with manual data entry, invoice approvals, cutting checks, and answering vendor payment inquiries. In fact, nearly half report spending more than six hours per month just following up on vendor inquiries, according to MineralTree’s research. There are also the logistics of performing all these manual tasks while teams work remotely.
AP automation on the rise to fill the gap
In response, finance leaders must prioritize investments in back-office automation, such as accounts payable (AP) to streamline processes and reduce their dependence on in-office staff. In MineralTree’s survey, AP ranked as the top digitization priority in the back office (for the third straight year) due to its ability to help finance teams do more with less, process invoices, and pay vendors more quickly and easily. Other back-office automation priorities include accounts receivable (AR), expense management, close management, and forecasting.
In addition to the efficiency gains created by AP automation, some solutions also offer real-time dashboards and custom reports for much-needed visibility into cash flow and working capital. They also provide finance leaders more flexibility in payment timing—either to improve cash flow or take advantage of early payment discounts.
For those embracing automation, the most digitized AP task, according to MineralTree’s survey, is invoice approval/workflows (71%), followed by invoice data capture and coding (66%), payment execution (58%), and payment authorization (58%). And those users are seeing tangible benefits to help offset the challenges created by remote work and short staff:
- 85% reported efficiency gains.
- 63% say they can make faster, more timely vendor payments.
- 58% can absorb a growing volume of invoices and payments with the same-sized team.
- 24% reallocated freed-up staff time to other projects.
- In addition, they are gaining much-needed visibility into cash flow and working capital.
Interestingly, only 20% of businesses surveyed by MineralTree have fully automated their AP processes. This suggests a significant opportunity for organizations to increase their operational efficiency gains by automating additional aspects of their AP workflows, such as digitizing paper invoices, automating approval routing, and paying vendors digitally. Analyzing invoice and payment data can also help businesses identify opportunities to reduce spend and maximize cash flow by consolidating vendors, timing payments, and taking better advantage of early payment discounts.
Whether a business is focused on the end-to-end AP workflow or looking at specific elements in that workflow, automation can drive big efficiencies while filling the significant gaps created by short-handed and remote staff trying to manage manual processes. Automation also tends to feed itself. Companies automate one part of the process and quickly discover easy opportunities to automate another. The ROI gained from each effort propels the next.
Anik Jain
Anik Jain
Anik Jain is a senior product marketing manager for MineralTree, a Global Payments company. In his role, he studies evolving customer, market, and industry trends to support MineralTree’s product development and communication efforts in the AP and payment automation space. He has over 20 years of experience in B2B product marketing and consulting, including key contributions at Pitney Bowes, Verizon, and PayStream Advisors