One of the biggest challenges that every organization faces is becoming too busy to change.
The mantra of Learn, Innovate, Execute and Repeat enables business to continually evolve, to continually move forward step by step. But this mantra has one important caveat – DON’T STOP!
This is the cornerstone of every successful business because if you are not improving, you are losing ground to your competitors. In today’s world of technological innovation, that is a race you can’t afford to lose.
Often, businesses revert to the old adage of “if it ain’t broke, don’t fix It”; or put another way, “it’s OK to stagnate”.
As a result, too many businesses are clinging to old methodologies that burn everyone’s time.
They’re rife with clumsy, painfully slow manual processes that keep everyone in the intellectual dark. But here’s the question:
How do you get smarter if you have no idea what is actually happening?
A manual accounts payable process is a classic example.
With more people working from home than ever, accounts payable staff have been forced to innovate with workarounds to enable this.
A common example is using emails for invoice approvals, which is a band-aid approach to a manual methodology that hasn’t changed in centuries.
Automation of the accounts payable process delivers a 65% – 90% productivity gain for everyone involved, whilst providing key stakeholders with real-time status updates.
This frees a huge amount of time for more productive activities that drive your business forward.
Many senior financial managers are reluctant to change, yet are all-too willing to continually highlight inefficiencies in other departments.
These professionals should look in the mirror; because from the business’s perspective, their reliance on paper in 2020 is simply embarrassing.
Too many accounts payable staff see change as a threat and not an opportunity.
Their role is critical, but they are so busy doing the basics that there’s no opportunity to learn new skills and grow – neither individually nor in the value they could, and would, bring to the business. If only they had time.
The Covid-19 impact
Covid-19 has accelerated many changes that impact the accounts payable process.
Every business has worked out that sending a paper invoice to an empty office will result in delayed payment.
As a result, everyone is adopting standard accounting / ERP functionality that automatically generates a PDF invoice and emails it to their customers.
Their invoices are delivered almost instantly, 100% of the time – it’s free, and it’s green.
A recent survey highlights that the adoption of emailed PDF invoices is over 90% in Europe and has grown to over 70% in the USA in just a few months.
No one is going to go back to paper invoices.
The second change is that we are all buying more online – a lot more.
The Sunday Times survey in November estimated online spend to have grown by 40% in the past 6 months – a huge increase on what was already a significant amount.
Businesses have contributed to this change, but again, they have done it in a totally disconnected way: usually through personal or corporate credit cards, adding yet more work for accounts payable.
Online buying can be included as a fully integrated component of accounts payable automation.
This means everyone external to finance can enjoy the best buying experience, and finance gains total control over the spend before it takes place.
This is followed by a fully automated invoice capture, GL coding and approval process.
Compleat’s detailed procurement review of $200k of spend across 5 organizations' general purchasing from their usual suppliers highlights that they could have saved, on average, 32% by buying the same item or equivalent from Amazon Business. (Link)
So not only is the old methodology lacking any visibility or control over the purchasing process, wasting the time of everyone doing those purchases both inside and outside the finance department, it is also wasting money.
So here’s the issue:
Most small businesses could change to a fully automated accounts payable process, with integrated online buying from Amazon Business and other vendors – and go live in literally a day or two. What’s stopping them? Poor excuses.
- The excuse of being “too busy to change” is why the change is needed in the first place.
- The excuse of not being able to afford it is the perfect financial justification for making the change.
- The excuse of “the current process works” simply highlights management stagnation.
And from the business’s perspective, finance has become a corporate brake.
Learn / Innovate / Execute / Repeat is the foundation of every successful business
Senior finance management should take note and do something about it. Compleat recently undertook a cost optimization exercise to identify where businesses can save money on what they already buy, download the free report below to see the results for yourself: