by Sophia Riley | Jun 27, 2023 | AP Automation
All kinds and sizes of businesses must manage their cash flow efficiently for success. It is common for companies to encounter difficulties in financial management, and automating the accounts payable process can be advantageous.
Improving accounts payable procedures enhances cash flow and offers AP staff control over payments while offering them a chance to influence the cash flow positively.
Accounts Payable Automation
Automating AP department operations ensures enterprises make quicker payments and have a steady cash flow. It eliminates manual tasks, improves information sharing, and supports electronic billing or payments.
Organizations will need fewer staff as the system helps with financial documents and reporting. They can easily get information about unpaid invoices, estimates, purchase order linkages, taxation, and invoice timelines. Besides making the information accessible for scrutiny, AP automation reduces operating costs.
Businesses can carry out many tasks and save a lot of time using an electronic account payables system, like:
- Automated processing of purchasing orders
- Keeping a record of goods purchased.
- Approving and verifying invoices
- Signing off on purchasing orders
- Timely payment to suppliers
How accounts payable processes work
Companies purchase items from suppliers to pay later and the accounts payable team play a significant role in businesses’ financial transaction. AP automation ensures payments are correct, on time, and fraud-free.
The AP department gets bills through various channels and can get them electronically or by hand. With automation, there will be minimal information keying by humans. The system helps collect and tag invoices to the correct accounts and billing data. Workers can compare the bill against the purchase orders.
Then, it sends invoices to the right individuals for authorization, using an AP or ERP system before bill settlement.
The AP team takes a considerable time handling problems such as invoice exceptions, responding to supplier correspondences, locating other purchase documents, and seeking prompt approval of payments.
It is essential to use automation to ensure the optimal functioning of the account payable processes. Here is how to do it;
Involve AP Department
People are not adept to change and involving the team will make them embrace it. The personnel needs to undergo training and acquire skills to utilize the system for the best results. Businesses can start the digital transformation initiative with repetitive tasks like account payables by automating the entire cash flow operations. Including stakeholders and getting their input when developing the plan is best.
Use Advanced Technology for AP Automation
New AP automation applications for businesses can do more than previous versions eliminating manual work along the way. They are cloud-based and automate accounts payable procedures, including billing, purchase order evaluations, and support electronic payments.
Digitization improves accuracy in invoices and purchase orders by pulling information from the company database. Staff does not have to move from their desks to get payment approvals as they can route them automatically, notify the relevant person and escalate matters of concern.
AP automation eliminates data input mistakes.
Optimizing the system for mobile devices will simplify invoice approving and signing as executives can do it on their smartphones.
The system automatically saves data and documents to the company database offering a centralized platform for information access. With key performance indicators, businesses can use dashboards to track the AP department performance and generate reports in varying formats.
Integrate Support Digital Tools
The AP team must pull information from external platforms when processing invoices and purchase orders. Integrating other digital tools into your accounts payable system is important for optimal performance. A qualified and experienced technician can help enterprises find the right system for their business needs.
Continuously analyze and improve the System
It is improbable to get everything perfect upon the first attempt. Like other digital transformation initiatives for businesses, AP automation is a continuously changing process. To increase productivity, it is critical to analyze and improve your system functionality to adapt your processes accordingly.
After utilizing technology for some time, people will develop varying opinions about it. Interviewing the AP team about system functionality will provide ideas for modifications and upgrades. You can improve performance by asking users to share their experience: What have they found beneficial, and what to do to simplify their work? Then pick the greatest ideas for implementation; Users will be happier seeing their proposals implemented.
Ensure Transparent Accounts Payable Operations
Data silos arise from manual procedures and piles of documentation, which can hinder transparency in business payments. However, AP automation is a critical step in evaluating corporate spending adequately.
Not having clarity on invoice processing and payment procedures exposes businesses to risks and inefficiency. It will take lots of time to get information and organize data. In addition, organizations will need to recognize the real worth of the information they obtain from the AP system.
Firms may benefit from early payments on invoices as suppliers have discounts for customers paying before the deadline. AP automation allows companies beat the payment timeline by approving invoices quickly and eliminating problems that may cause delays in processing.
Digitization will reduce the time used in invoice processing procedures and human mistakes from data entry, at the same time, help in tracking payment schedules to benefit from the discounts. In addition to reducing invoice exceptions, AP automation ensures correct and timely payments. Interactions with suppliers become easier, more reliable, and mutually beneficial.
Automation of AP streamlines supplier contacts
Suppliers can choose payment methods using the AP system and send invoices in different formats.
The Final Thoughts
When looking for AP automation tools, it is essential to consider the digital solution connect to your existing system for the best performance.
Undertaking the AP automation in-house can b costly for small and medium enterprises since they probably do not have the personnel to do the work. However, businesses can outsource digital transformation services from professional IT firms. Besides cost saving, companies get the right expertise and continued support during implementation.
Enterprises can build the automation system from scratch or purchase third-party applications to streamline business processes.
by Sophia Riley | Jun 22, 2023 | AP Automation
Companies can improve efficiency in the accounts payable processes and find inefficiencies by having key performance indicators. Metrics differ depending on the business scope and industry and help assess accomplishments to the core company objectives while creating goals for continued growth.
Businesses must establish metrics where they compare performance against set standards and targets. It helps gauge effectiveness in operations and impacts the company’s success. It is the same with the accounts payable processes: There should be a measure to prevent missing items during billing, improve productivity, and measure performance.
The Importance of Key Performance Indicators in Accounts Payables
AP KPIs offer essential information for strategic payment and procurement in a company’s short or long-term plans. Modern technology enables real-time monitoring of key performance indicators as businesses can get data on a dashboard. Organizations may handle common issues with account payables using specific metrics, including;
- Decrease mistakes from inputting data manually in databases
- Track all available channels for receiving invoices
- Ensuring information on the invoice matches other sales and financial records like purchase orders
- Eliminate manual and time-consuming tasks leading to fewer invoice exceptions.
- It helps detect fraudulent transactions in the business.
- Making accounts payable management more effective
5 KPIs in Account Payables Worth Tracking
Key performance indicators are something business managers and finance professionals are familiar KPIs should be SMART (Specific, measurable, attainable, relevant, and time-bound). Monitoring KPIs should be regular and has a significant role in the strategy’s success. Here are some metrics to track with account payable automation;
- Invoice Processing cost
The metric is the total expense of the AP team o process one invoice and varies amongst firms based on the variables taken into account when calculating the costs,
If organizations do not factor in the hidden expenses, they may seem low and will not know what could harm a company’s profitability. When a business processes invoices manually, it is critical to factor in the personnel and operational expenses of labor-intensive, prolonged procedures and the higher possibility of human mistakes, which affects the cost per invoice.
Other factors that affect the invoice processing costs include:
- Processing mechanisms and infrastructure
- Invoice printing and delivering
- Mistakes, overpayments, and payment delays
- Lost discounts from suppliers
- Auditing fees
Organizations need to consider the goals when automating the accounts payable procedure as they seek to improve productivity and eliminate human mistakes.
- Payment Processing Lead time
The metric measures the time for receiving, processing, validating, and completing a payment request. It is a great technique to gauge the effectiveness of the entire AP process even if some steps take place beyond the system functionality and considers the duration for:
- Making an invoice into an electronic format or saving it into a standard data form.
- Comparing the invoice to any accompanying documents, such as an agreement, a receipt, or a purchase order.
- Assessing and approving any variations.
- Tagging expense invoices and distributing them to the appropriate personnel
AP automation is the secret to reducing invoicing lead times. It saves time by eliminating manual procedures and AP staff can concentrate on other tasks. Digitization aids in tracking the KPI and executives can accurately determine the lifecycle of invoices before payment completion.
- Amount of invoices Staff Process
AP automation ensures the team has less work and more time for other tasks. However, it doesn’t always entail firing employees: businesses view this as a chance to employ skilled AP personnel for advanced jobs like data analysis and reporting.
Although it may not come to mind as a key performance indicator when considering important metrics in accounts payable management, businesses need to measure the number of invoices full-time workers handle, offering insights into efficiency and productivity.
The figures vary across organizations depending on how often they count invoices as you calculate the total number by the period. Companies must be keen when analyzing the metric as it can be complicated: They must look at many factors before comparing the result to industry standards or other companies.
- Rate of Invoice Exceptions
Billing mistakes can harm ties to vendors and impact credit terms on supplies. Since payment errors are a frequent blunder, enterprises must track the occurrences. We derive the rate of invoice exceptions by dividing the number of outgoing payments by the total at the start of the processing pipeline.
Another KPI to focus on against these issues is the duplication of payments and it is common among firms that look to prevent fraudulent payments. With AP automation, it is not necessary to do the calculations manually as the system can provide the information and executives can get data in real-time. Still automating AP operations will significantly reduce mistakes by eliminating manual data entry and invoice processing.
- The percentage of Invoices distributed automatically
In addition to diverting AP workers from their crucial jobs, delivering the relevant billing information to the right authority can lead to lost or forgotten bills. Use an efficient AP automation technology that transmits the invoices swiftly to the proper recipient to avoid delays or strained relationships with suppliers.
It would be best to monitor the KPI because it shows the proportion of all invoices that get to the appropriate personnel with no user input. The most advanced technologies can redirect invoices and add precise tags for easy monitoring.
A company can program the logic into the system to help the AP department evaluate the effectiveness of their automation systems and company performance.
Conclusion
Regardless of the technology you integrate into your business, the people who will be using the systems largely determine success with the initiative. Therefore, it is essential to engage the AP team about automation in operations from the start.
Involve all project participants in implementing AP automation to ensure they embrace technology integration at the workplace. In addition, enterprises would achieve their desired results by having experts help in system development.
Qualified and experienced personnel will ensure your accounts payable process complies with the industry regulations and can pinpoint opportunities for development,
by Sophia Riley | Jun 20, 2023 | Artificial Intelligence
Businesses are looking for technological advancements that will enhance their specific operations. Particularly, a few technological choices attract a lot of interest. Although they are sometimes mistaken for rival technologies, they are all distinct and offer various advantages and results.
With rising customer demands and expectations, sales order automation is a valuable strategy to ensure customer satisfaction. Due to numerous system and software developers, you have options for transforming operations.
Smart Automation Elements
Artificial intelligence, machine learning, and robotic process automation are key technological advancements that may help businesses automate and simplify operations. It is critical to invest in advanced technology to gain a competitive advantage over firms with standard systems or none at all.
Some common features in modern sales automation applications are robotic process automation, artificial intelligence, and machine learning. Many people think they are one thing, but each is independent and accomplishes a particular automation goal.
Take the processing of invoices as an example.
Suppliers will send invoices electronically via mail or other channels like an ERP system, which you then save into a folder, retrieve the necessary data from it, and then connect with an accounting application for payment processing.
According to our example: RPA aids automation of tedious tasks of locating invoices from channels and will retrieve the mail according to the subject heading. With holistic sales order automation, RPA gathers the documents in a particular folder, extracts information and links with the accounting software for payment.
However, to accurately go through the bills and extract the necessary details, like product description, supplier name, invoice number, supplier name, payment period, and balances, it is possible via AI.
Let us help you understand their difference by looking at each of them.
Robotic Process Automation
Robotic process automation is a technique that uses bots to replicate human behavior in systems. It is capable of performing a broad range of predefined tasks, including understanding the information displayed on a screen, making the appropriate actions, navigating systems, and extracting and identifying data. The technology completes tasks with greater accuracy and speed than humans.
RPA helps with monotonous and basic duties like login into programs and frameworks, transferring documents and folders, acquiring, copying, inputting data, completing forms, and generating regular reports rather than by actual humans.
RPA is altering the history of the workplace with its application enhancing production and efficiency. Technology frees human resources to concentrate on other important tasks. It can undertake cognitive tasks like language interpretation, conversational interaction, processing of unorganized information, and using modern algorithms in making complicated judgments.
Although there has been great progress in technology, the majority of sales teams dedicate a lot of time to entering information, managing it, syncing data, updating systems, and fixing issues with client orders. Since RPA handles time-consuming duties, it will increase income significantly for the whole company.
Artificial Intelligence
AI streamlines operations, releases resources, and increases efficiency. It is viewed as a technical “brain.” which is sometimes mistaken for an innovation to extract data.
On the contrary, it is only a tool for managing information and data. AI consists of algorithms that assist enterprises in making informed selections by considering existing patterns and earlier choices. However, they differ depending on your system or software; some are basic, while others are complicated. We can accurately categorize technology as artificial intelligence if it assists in making a choice without being forced or programmed to do so by a user.
There has been significant acceleration in digital transformation in the past years and artificial intelligence aids companies navigate through an uncertain business environment. AI may help with a variety of sales-related tasks, such as:
- Responding fast to customer requirements: Businesses can adjust to evolving customer demands and expectations more swiftly.
- Gathering and analyzing numerous pieces of data before reaching conclusions.
- Obtaining info in real time. Everyone in the organization has immediate access to data thanks to AI.
- Offering a reliable source for accurate business data.
- Collecting data from several channels.
Executives can view all deals in the pipeline and assist them in choosing by forecasting to increase deal prediction accuracy. AI uses historical data to provide incredibly accurate forecasts, accelerates sales order processing, and reduces the possibility of error by establishing authorized pricing.
Machine Learning
It is a type of robotics that users input commands to a computer manually and program the system to take specific actions. These choices are compelled or automated in response to user recommendations.
Sometimes it is necessary to tell the computer what to do even though you may have RPA and Ai integrations. Algorithms are logical structures designed to aid computers in resolving issues. They are essential in the way computers understand data and use it.
Machine learning utilizes data sets to aid computers in acquiring the ability to complete particular jobs without having those duties coded into them. The algorithms are complex, and every time the computer receives new data, it spots trends and generates precise forecasts.
Besides identifying patterns and forecasting, through machine learning a computer may execute a variety of other activities provided to it. What distinguishes machine learning algorithms from other contenders is their computational correctness.
Deep learning is a technique that seeks to emulate the capabilities of the mind of humans, while machine learning tries to tackle complicated issues. The former models frequently use big data sets, whereas the latter works with smaller or medium-sized data sets.
The Final Words
Due to the ever-changing business environment, it is necessary for enterprises to adopt the most advanced technology to keep up with industry leaders. Thanks to robotic process automation and artificial intelligence the workforce can achieve more.
When choosing the best automation software, it would help to evaluate the available features and the service provider’s reputation. Working with experts in digital transformation implementation is beneficial and offers value for money. They can help develop a fitting framework for your business needs and provide support after its rollout whenever necessary.
Remember that human beings are still critical elements in business success, and change management is essential when digitizing business operations.
by Sophia Riley | Jun 15, 2023 | Vendor Management
Efficient corporate management is crucial to ensure that your organization turns over profit year on year. Among other things, the key managerial positions are also entrusted with the task of maintaining healthy relations with the business partners. Vendors are one such business partners that cannot go unnoticed in the scheme of things. If your company relies on software and app development outsourcing, you must have a good relationship with your service provider in the SaaS space.
Today, we have ushered into the third industrial revolution, which is centered around digital technology. The companies that have adapted to this change are moving forward exponentially. From providing best-in-class customer service to database management, your organization cannot function without robust technological support.
Additionally, your company’s quarterly performance will heavily depend on the performance of the software you deploy. Therefore, you must ensure that your SaaS vendors understand your organization’s core values and deliver on time. Also, the vendor should understand the needs and requirements and offer maintenance services accordingly.
A good vendor relationship will help you save tremendously in expenses because you won’t have to maintain an in-house software development team. This will help maximize profit, and you can direct the resources to a supply-chain management system for better output. In this article, we will talk extensively about vendor relationship management, what it is and why it matters.
Vendor or Supplier, what’s the right term?
Before we start our virtual session on vendor relationship management, we must clear some of our basics so there is no confusion midway. The organizations that have been around before the advent of digital space hardly differentiate between the two terms. In such corporations, you will often notice both these terms being used interchangeably, which is correct.
If you occupy a managerial post in your company, you will first have to figure out how your company defines vendor and supplier. Once you are clear on this, we can move forward easily. Now, the companies that are operating extensively in the digital space use vendors and suppliers for two different types of service providers.
Here, vendors are the ones who act as ombudsman and are third-party sellers of the software and applications, whereas a seller is the one who is a first-hand developer of the technology.
What is vendor relationship management (VRM)?
We have already covered what we mean by suppliers or vendors. Now, let’s address the elephant in the room. What is VRM? From a company’s perspective, which is also the buyer of products and services, a VRM means managing healthy relations with the business vendors.
A company establishes vendor relationships by executing contracts or implementing efficient business strategies. Therefore, vendors form a crucial part of the core business operations. VRM essentially means that a buyer should ensure a healthy collaborative atmosphere for its vendors to ensure seamless business conduct. To this extent, companies deploy programs to ensure mutual benefit.
Additionally, if your company is planning to avail the service of a supplier for a long period, and you are responsible for vendor management, it is your duty to devise strategies to ensure consistent and prosperous business relations. In a much more technical sense, Gartner defines vendor relationship management as a “ discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal lifecycle.”
So, as a vendor manager, you must start by quantifying the impact that every vendor and the service provided by them have on the profit of the organization. You must also note the risk exposure each vendor has on the organization.
This will help you categorize the vendors in order of relevance. You can use this segregated list to devise different strategies. This will help you develop plans to mitigate risk, increase profits, and add value to the organization.
Why is Vendor Relationship Management Important?
A buyer and a supplier in a B2B setup are co-dependent on each other. However, for a buyer (the company) operating in the digital space, vendor relation is much more crucial because of the centrality of vendors in the company’s profit and risk factors. Therefore, as an organization, maintaining healthy vendor relations should be your priority.
Good business relationships with vendors will unlock a lot of benefits, which will improve the profits and mitigate risks. Additionally, your organization’s smooth functioning will be ensured when the goals are achieved on time. A healthy collaboration will mean that the vendor will allow you to work closely with them so you can communicate your needs and requirements efficiently.
Good vendor relations will also ensure long-term collaborations, saving your time on market research for new projects. You can also improve your consumer service by maintaining good relations with your vendors. The quality of the product is also related to the kind of relationship you maintain with your vendor.
Now, there are deeper benefits to this too. If you have availed the services of a vendor for a long time (which will be a result of efficient VRM strategies), the vendor will start to closely understand your organization’s operations and come up with solutions to beat the market competition.
You may also get access to some [remium services, which can help in cost reduction and profit maximization. Therefore, VRM is quite important to boost the company’s overall performance.
How to have efficient VRM practices?
If you are working in a well-established organization, chances are they will have a VRM system already in place. However, this does not mean that the system is working as efficiently as it should. Most companies have older people in key managerial positions who are quite traditionalists.
Therefore, you can notice an orthodox approach toward vendor relations, which may be obsolete according to the current trends. Therefore, you can fine-tune the system to ensure a better collaborative environment for your vendors.
But you should remember that every company is different because they are built on different values and principles. Also, the core operations concerning vendors are different for each organization.
So, you can take some of our generic ideas and customize them according to your corporation’s needs. Here are some practices to ensure efficient vendor relationship management.
Adding a VRM solution may go a long way
In layman’s terms, we cannot ignore the relevance of technology in today’s fast-moving world. You can streamline almost any of your business operations and strategies by deploying efficient tools. Now, vendor relationship management using spreadsheets to manage an extensive list of vendors can be physically and mentally challenging.
Also, the margin of error is quite high. An error in the vendor management system can multiply in the long run and cost your company a fortune. Therefore, this is high time to deploy automation tools to manage the grunt work for you.
SaaS vendors already use CRM or customer relationship management tools to ensure closer engagements. Similarly, you can deploy VRM solution applications in the stack to improve vendor relations. With the help of vendor management applications, you can simplify the complex procedures of management.
Additionally, it will help you streamline the process and keep real-time track of the vendors. This is especially beneficial for organizations that have a long list of vendors. Some key benefits of automation tools include data-driven decision-making, elimination of hefty spreadsheets, efficient cost-tracking, etc.
Performance mapping can be useful
As discussed earlier, one of the best practices to ensure efficient VRM is to categorize each vendor according to their impact on profits and risk exposure. Now, it is also important to track the performance of each of these vendors so you can bring necessary changes in operations and negotiate your terms of the deal accordingly. Vendors are like contractual employees for an organization.
Therefore, just like your score your employees on their performance, you should score your vendors too. This is where VRM applications bring another utility. You can use these applications to track the feedback given by the stakeholders in real-time. You should keep a database of this feedback and analyze it annually to develop Key Performance Indicators (KPI).
KPIs will help you quantify the performance of every vendor, which will help you in strategy building. However, do not address all the issues annually. If you think some issues are critical, address them immediately.
To ensure a healthy working relationship, you can ask your vendor to maintain a KPI score for your company too. This way, you can come up with programs that are mutually beneficial and leads to better collaborative output.
Take an interest in the vendor’s business
Traditionalists just concern themselves with the final product and the deadline. They hardly understand the internal operations of the vendor’s organization. It is high time for us to change that.
Knowing the vendors’ business and operations inside out can give you a complete idea of their core business values, which will give you a better position when negotiating a deal. Also, it will give an idea that you are serious about your organization and won’t compromise on vendor quality.
Also, visiting the vendor’s organization will give you a complete insight into how a product is developed from scratch, what are the testing methods, what all teams are deployed in the task, etc.
This will help you when making negotiation strategies. Also, when you get deeply involved in the product development process, you develop efficient strategies to maintain long-term vendor relations.
While visiting the facility, interact actively with the vendor representative to give an idea that your organization believes in core human values. This will strengthen your foundation with the vendor, and you may get best-in-class service for the same cost.
Choosing the right vendor is important
Different vendors have different business and development strategies. Therefore, all of these strategies may not align with your organization’s model. It is crucial to carefully choose vendors that will prove to be strategically beneficial for your company. Hence, it is the vendor manager’s responsibility to pick out the ones that are a perfect fit for the organization.
You can only forge a stable and profitable relationship with those suppliers who are compatible with your organization. For this reason, it is important that you keep a checklist of indispensable factors that you seek in your vendor.
For example, when settling on a vendor, take note of how he will be received by your customers. Also, see if the vendor’s business model is ideal for forging a long-term strategic partnership.
Lastly, you cannot move forward without the assurance of pricing flexibility. A company’s performance is directly affected by market patterns, so it is crucial to have some room for negotiation in the future. If all these prerequisites are met, you can form a healthy relationship with your vendor.
Convey your expectations clearly
When establishing a relationship with a vendor, it is crucial to convey your long-term goals and expectations. This will help the vendor in proceeding according to your needs and requirements. Also, if you think that there may be some challenges when working with a vendor, you should convey them early on so the vendor can make the required changes in time.
It is best to incorporate your expectations and challenges in the contract to settle all future disputes seamlessly. If, at some point in the course of business, you realize that the vendor is unable to meet your expectations, which is hurting the company’s performance, you can execute a document with actionable requirements to clearly convey your company’s objectives to the vendor.
Communication is the key
Effective communication has been at the helm of affairs when deploying a vendor management program for quite some time now. It is important to communicate with your vendors one-on-one and talk about your annual goals. You can also hold quarterly meetings to discuss performance requirements and feedback from the stakeholders.
Use this opportunity to get a scorecard from the vendor too. This way, the vendor will understand his value in the collaboration and feel like an equal partner. Frequent communication will help your organization move on from formal needs and establish a deeper connection with the vendors.
by Sophia Riley | Jun 15, 2023 | Artificial Intelligence
The Oracle Cloud Infrastructure (OCI) Document Understanding service allows you to perform sophisticated document extraction at scale without any data science background. Read about how oAppsNET Order Management application uses cutting-edge Oracle Cloud technology to greatly simplify and automate mundane tasks, allowing oAppsNET offer an enterprise sales order automation solution with minimum time and effort.
https://blogs.oracle.com/ai-and-datascience/post/oci-document-understanding-custom-model-support
