How to Achieve Accounts Payable Transparency

If it feels like you never know exactly where your accounts payables and invoice processing stands, you are not alone.

A lack of visibility into invoices and other AP documents is one of the biggest accounts payable challenges cited by controllers, per research from the Institute of Finance and Management (IOFM).

 

Poor visibility into invoices and payables documents makes it difficult for businesses to manage:

• Finance operations
• Working capital
• Corporate spend
• Fraud and compliance risks

 

For instance, without a clear picture of where invoices stand, businesses cannot assess their cash position or make informed decisions about whether to accept an early payment discount offer.  They also may not be able to identify spending patterns or spot out-of-budget purchases until it’s too late.

The root of the problem is the manual and semi-automated invoice approval processes on which most accounts payable departments rely.

 

In a manual or semi-automated accounts payable department:

• Key information is not captured
• Data is poorly organized
• Information is not timely
• Systems are not well-integrated
• Decision-makers do not have access to key variables

 

It is hard for staff to track the status of invoices and other documents in a manual or semi-automated environment. It is equally difficult to ensure that the right person has approved documents in a timely manner.  Paper invoices can sit for days on an individual’s desk, get stuck in inter-office mail awaiting approval, or become lost or misfiled.  Similarly, electronic invoices can be e-mailed to the wrong person.

These are the reasons 41 percent of controllers surveyed by IOFM cited “improved visibility into invoices and other accounts payable documents” as the top benefit of payables automation.  Businesses with a high level of accounts payable automation have more than four times greater visibility into their overall organizational cash flow than other businesses, per Aberdeen Group.

 

How accounts payable transformation improves visibility

 

Digital technologies improve visibility accounts payable leaders need.

Dashboards provide accounts payable staff and other stakeholders with a real-time look at staff productivity. They include invoice status, the source of exceptions, accruals and liabilities, late-payment penalties, early-payment discount capture opportunities, percentage of early-payment discounts captured, enterprise spending, and other metrics from any PC, laptop or mobile device.

Business intelligence enhances dashboards by analyzing current data and historical trends and patterns for more dynamic decision-making, such as uncovering bottlenecks and the root cause of exceptions.

Digital transformation also makes forecasting fast and accurate.  Some payables solutions can scan and analyze unlimited amounts of data, from any paper or electronic invoice for any defined time, to forecast cash, spending, and other data based on historical patterns and trends.  For instance, users can mine information stored in a solution’s digital repository to detail cash flow trends.

The insights these solutions glean from historical data such as recurring invoices help businesses determine spending patterns or when it is best to release cash or to take advantage of early-payment discounts.

 

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Edenred Pay, an Edenred Company, is the global leader in invoice-to-pay automation. Our integrated platform connects businesses with suppliers, ERPs, banks, FinTechs, and payment rails to automate, optimize, and monetize the entire B2B payments lifecycle – from invoice receipt through payment reconciliation. Edenred Pay’s efficient, integrated solutions create a frictionless process and help deliver value to the enterprise by enhancing visibility and monetizing AP.

Visit www.edenredpay.com or contact us to learn more.