SUBMITTED BY Jeff Haller

In a recent Wired article, the author points out that supply chain backlogs and breakdowns are the new normal to which companies must adapt. Today’s global pandemic and major wars are the cause of the current supply chain crisis, but now is the time for businesses around the world to get ahead of disruptions and prepare for whatever the next crisis will be. Experts advise companies to invest in technology that provides greater visibility into the flow of goods and predicts potential bottlenecks.

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How can your AP department help your supply chain managers during a supply chain crisis?

The first, most obvious step is to not exacerbate the problem by avoiding AP invoice automation (APIA). Relying on manual, paper-based AP processes to approve and pay invoices is creating payment slowdowns, taking up valuable AP staff time, and obscuring visibility for the CFO and your suppliers. By automating your AP processes, you can cut costs, optimize cash flow, acquire real-time visibility into outstanding payables, and head off potential supply chain breakdowns before they occur.

1. Visibility

For your company to successfully weather a supply chain disruption, visibility into AP processes is imperative. The more visibility you have into your AP workflow, the easier it is to predict cash flow, identify potential supply chain disruptions before they occur, and make data-driven decisions. If your AP team is relying on paper-based invoice workflows, they cannot offer your financial leaders accurate real-time data. By capitalizing on AP automation and increasing visibility, you can eliminate surprises and improve business intelligence. Your financial team can see where late payment fees occur and identify pain points in the process slowing vendor payments down.

2. Improved supplier relationships

Scenario: Acme Tools is the premier provider of widgets, but is limited to how many widgets they can produce because of their own supply chain limitations. Customer A has AP Automation. Within 24 hours of receiving an invoice, it is in their software, ready to process. 80 percent of their invoices can be processed without a single human touch before it is sent to their ERP for payment. Customer B, on the other hand, is still a paper-based, manual process. Paper invoices are received and thrown into a pile. Emailed invoices get sent to a folder until someone can print them. Days go by without the invoices being sorted and data being entered. When someone gets to that, the invoice is then passed around the office for payment approval. Now, Customer A & Customer B call up Acme Tools, both in desperate need of 100 widgets to fill some high-priority orders. Acme only has  100 widgets. Customer A has a zero balance, while Customer B has 2 past due invoices. Who do you think will receive the widgets?

With supply chain issues only getting worse, strong vendor relationships are more important than ever. Not only does AP automation ensure your payments are on time it also identifies potential at-risk vendor relationships, allowing you to prevent damage from occurring. Additionally, through real-time analytics, Your financial team can see where late payment fees occur and identify pain points in the process slowing vendor payments down. Your vendors will also appreciate the ability to login to your AP automation system to get the status of their payments anytime.

3. Increased efficiency

How did Customer A get their Acme Tool invoices paid so quickly? AP Invoice Automation offers seamless, single-stream digital document processing.  You streamline operations and reduce human error. The cost savings you realize through automation efficiencies enhance your bottom line in even the most adverse global circumstances.

The advanced features of a best-in-class AP automation software promote incomparable turnaround times. A no-effort document intake solution means just that. You don't do anything. You log in and your invoice data is in the system, ready for processing. Combined with automated coding, 3-way match, approval routing, reminders, escalation triggers, flagged exceptions, and so much more, you could easily see how those average turnaround times go way down. This ensures that AP, internal buyers, and department managers are only spending time on value-adding activities.

With the help of AP automation, your company can be prepared for inevitable supply chain disruptions while realizing savings and increasing profitability.

To learn more about how DataServ’s APIA solutions can help your business, contact us today.

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