(Editor's Note: We welcome guest blogger Steve Bernet of research firm PayStream Advisors, who shares his insight into how ePayables solutions bring procurement and accounts payable departments together, driving cost savings and greater collaboration.)
Most organizations have little or no integration between purchasing and payables departments, which results in a disjointed, often inconsistent invoice workflow. In this kind of siloed organizational structure, it’s impossible to look at a transaction’s journey holistically, from requisition, purchase order, receipt, invoice, and finally payment. As AP managers well know, it can also breed a sort of ‘us vs. them’ mentality between departments when discrepancies arise that staff members must resolve. PayStream Advisors’ analysts have long advocated for a holistic, integrated approach to aligning the various functions along the purchase-to-pay continuum.
Read the "2017 Electronic Payments Report" HERE.
Purchase-to-pay software can certainly streamline some of the biggest pain points of a typical manual process, such as late and duplicate payments, but only after the case for cross-departmental collaboration has been made effectively. It’s a business case that will require strong governance and frequent measurement against the most impactful KPIs. Once the ‘why’ of this plan for transformation is socialized throughout the individual departments, managers will find that implementation of automation tools can give this new structure more staying power. The value of these tools is not limited to the reduction of hard costs associated with printing and processing paper, but extends into the daily working life and culture of an organization.
Most notably, these tools allow staff members to reimagine the best way to spend their time to support business goals. Much of the repetitive work will be offloaded to automated workflows, freeing up staff to focus their energy on complex exceptions and the long-term, big picture initiatives they never seem to have time for. According to PayStream’s latest research report , for example, many AP departments spend more resources overseeing the payments management process than they would like. Managers and directors may recognize, in an abstract way, the importance of shifting payments to electronic payables or commercial card programs, but day-to-day their staff members remain tied to familiar methods like check.
Electronic payables (ePayables) tools can help ease the daily burdens associated with these methods. With a holistic ePayables platform, payments can be automatically approved based on pre-determined variables like amount or type. Or, they can be sent through a configurable payments approval workflow. Users can create a payment batch or pay individual invoices, choosing the best payment method for that particular time period to maintain optimal cash flow levels. Managers can take advantage of the audit trails these solutions provide, achieving full visibility of every edit and review step, often completing approvals from a mobile device while on the go.
Additionally, it’s possible for staff members to shift payments onto virtual cards to capture valuable discounts and rebates. Rebates can be large—up to hundreds of thousands of dollars. Using the correct policies, cards can be safely and beneficially used for a variety of spend types, and allowing organizations to achieve these large rebates. Staff members in environments that utilize these platforms are far more empowered to make choices that have a tangible impact on the bottom line. The new responsibilities and elevated roles gained by staff members (and the tedious tasks lost) through automation implementation help managers expand and solidify support for further transformation initiatives.
About the Author:
Steve Bernet is Consultant at PayStream Advisors, a financial research and advisory firm focused on business process automation in sourcing, supply chain management, procurement, accounts payable, payments, and expense management. Steve assists in research and consulting engagements involving source to settle (S2S), Order-to-Cash (O2C), and Travel and Expense Management (TEM) solutions. PayStream’s research reports, white papers, webinars, and tools are available at www.paystreamadvisors.com.
Ariett generates savings on every contract, requisition, invoice, expense report and payment with a modern, unified procurement platform. Designed to work the way you work, Ariett’s easy-to-use web application delights employees by running on any mobile device or desktop. Accounting teams everywhere benefit from upfront purchasing control, global visibility to spending and audit trails, which drive cost savings across the enterprise. For more information, please visit www.ariett.com, call 781-826-1120 or connect with Ariett on LinkedIn and Twitter.