Closed offices, reduced workforces, working from home, unpaid invoices piling up and cash flow drying up. Almost overnight, the COVID-19 pandemic sent waves of uncertainty and turmoil through businesses of all sizes and in all markets. Those that survived, and indeed thrived, were the ones that were able to instantly adapt. But there’s a silver lining. If 2020 was the year of disruption, 2021 is the year of embracing change.
It’s becoming clear that the business implications of the pandemic will be felt for years. But crises can also force a reset and trigger changes with positive outcomes. That’s the case for finance departments in the U.S. and abroad.
We at Yooz have been on a quest since 2010 to help businesses of any size and industry automate and streamline their accounts payable workflow, in the process helping them embark on digital transformation. Taking this journey is now more important than ever because digital transformation can futureproof a business to withstand unexpected external shocks and become more competitive and innovative.
Thanks to new technologies and digital tools, finance leaders can now better handle costs, improve relationships with their vendors and suppliers and adapt to ever-changing financial regulations, and still embrace and support new models for remote or hybrid work.
We wanted to get a better picture of the global state of automation in finance and surveyed more than 1,000 financial and accounting decision makers in the United States and seven European countries (United Kingdom, Ireland, France, Spain, Switzerland, Luxembourg and Belgium). What unprecedented challenges did they face, how far along in their digital transformation journey are they, and what key technology investments have they planned over the next 12 months?
The findings confirm that as a business challenge, COVID-19 will be with us for some time to come. Half of all the executives we polled think it will take at least a year, if ever, to recover from the knock-on effects. Pre-pandemic, companies were already wrestling with the need to adapt to significant change on three fronts:
- a significant overhaul of financial regulations,
- maintaining employee productivity and
- keeping the momentum for digital transformation plans going.
In 2021, new priorities have emerged on top of these challenges. First of all, companies face the need to streamline and optimize their financial processes and strengthen cybersecurity. Three out of four decision makers agree that the pandemic has accelerated the digital transformation of accounting and finance services. That quickening pace is a good thing. Businesses now realize how bad they had it before and are placing greater emphasis on becoming more efficient, more productive, and more agile.
But while digital strategies are indeed advancing, it’s not happening in the areas where finance leaders need it most. Just 18% of companies have achieved accounts payable (AP) and Purchase-to-Pay (P2P) automation. Getting ready for the future involves much more than just doing away with paper invoices and instead tackling the entire process from purchase order to initiating a payment.
What is holding finance decision-makers back from realizing full AP automation? Three things: the fear of complexity, using multiple systems for different documents, and upsetting existing work practices. Given the continued reliance on manual processes, it’s little surprise that just 20% are ready for electronic invoicing (e-invoicing).
What’s more startling is that it’s primarily smaller and medium-sized businesses that aren’t prepared for e-invoicing and still use Excel for accounts payable. As a result, they make their organizations more susceptible to late payments, strained supplier relationships, added costs, administrative errors and document loss.
Post-COVID, companies can now add the difficulties associated with working remotely to this list. Four out of five organizations tell us that the pandemic affected their ability to process invoices on time. One in six spend more than 100 hours per month processing supplier invoices while they could easily automate the process and cut that number down to 20 hours or even less.
To be sure, the pandemic has encouraged companies to accelerate technology investments, with a focus on enabling efficient, productive and safe remote work through cloud-based services. Cybersecurity is a priority as businesses recognize they need to better protect sensitive financial information, followed by investments in the cloud, applied artificial intelligence and analytics.
The new pressures created by the virus sweeping the globe have raised the awareness of the value of AP automation and how crucial it is to digitize the entire purchase to pay process. Companies are looking for secure solutions that are intuitive and integrate with software they’re already running such as accounting and ERP systems.
A P2P platform such as Yooz can deliver on all those points and quickly cut processing costs and cycle times. Yet automating the P2P workflow in the cloud, powered by constantly evolving machine learning algorithms, does much more.
It turns the AP function from a back-office afterthought into a strategic asset, providing the entire organization with real-time information. It gives a company the capability to extract and analyze data in real-time, turning a stream of invoices into actionable financial intelligence.
Simply going digital isn’t enough anymore. If we want to reshape the entire finance function to be ready for more growth and to withstand future shocks, it’s time to embrace end-to-end automation.
The tools are out there, and they’re getting better all the time. Now we need to make sure finance departments and AP teams avail themselves of this powerful arsenal to save time and money and deliver valuable insights to their organization.
You can learn more about the findings of our global survey in our new white paper “The State of Automation in Finance: 2021 Edition.”
Laurent Charpentier is COO and CIO of Yooz North America, Inc.