01 Dec Smart accounts payable technology helps Integral reduce late payments by 17%
Businesses across the UK are applying smart digital solutions to address inefficiencies in accounts payable.
Jamie Radford, CEO of the Accounts Payable Association highlighted this trend when he sighted several emerging technologies that can help accounts payable remain competitive and relevant in a constantly changing business landscape.
The first identified trend is the rise of automation, long heralded as a great enabler of efficiency in business. Already evident in accounts payable it automates tasks such as form filling, invoice management, invoice reviews, approvals, and record keeping. Used intelligently, automating key tasks in accounts payable frees up staff to perform additional duties and helps to streamline processes.
Alongside automating accounts payable, there is also the ongoing transition to cloud-based solutions. These give the advantage of less costly infrastructure and the ability to access the system from anywhere. This taps into a trend in the hybrid workplace and the rise of remote working.
These benefits are certainly not exclusive to accounts payable professionals. But certainly indicative of a more liberated view of home working and achieving a more productive work-life balance. The business might also benefit from a reduction in office space costs and lower staff turnover.
Another aspect of cloud-based solutions is the collaborative nature of many digital solutions. This helps to improve communication within teams and between departments, enabling everyone to work together more effectively. Helping to streamline processes such as approvals for key business activities.
Data is another major factor. Digitisation has many positive implications for enterprises, but it is critical that data security standards are strong enough to protect against the malevolent designs of cyber criminals. In his article, Jamie Radford commented that Accounts Payable teams can strengthen data security by adopting software that incorporates security measures, such as two-factor authentication or KYC (Know Your Customer) procedures. All members of finance teams should be trained with a strong understanding of cybersecurity principles, he added.
The data itself can be incredibly useful for Accounts Payable teams, and the tools introduced by automating accounts payable, such as intuitive online dashboards, allows a greater degree of intelligent, automated analysis. This information makes both finance reporting and spotting emerging trends in the data much simpler.
The final trend observed in the Association’s article was one that is probably close to any long-serving accounts payable professional’s heart: the ability to quickly set up digital payments. This makes the weekly cheque run a thing of the past, giving customers, suppliers, and employees confidence that cleared funds will be paid on time.
Delivering for customers
Many of these trends ring true for how Ricoh’s accounts payable solution delivers for customers. Integral UK Ltd, a JLL company, has talked recently about this impact. The building services firm employs 3,000 people in the UK. This includes suppliers and subcontractors who invoice for the products and services which enable Integral to meet its customers’ demands. The busy accounts payable department at Integral is consequently dealing with around 250,000 digital invoices every year.
Processing some 20,000 invoices each month using manual processes had become an increasingly complex and labor-intensive task. Arriving as PDFs they needed to be manually sorted into different folders for onward processing. But problems would arise from emails arriving without the invoice attached, or with multiple invoices and additional documents attached. There were concerns that invoices were going missing amidst the sheer volume, as well as some emails going straight into spam because suppliers were sending multiple emails simultaneously.
Smart accounts payable
Integral, therefore, needed a smart AP processing solution that was flexible and intelligent. Able to recognise an invoice and its content, and automatically route it to the appropriate next action. The solution needed to be able to identify different invoice outcomes and create a single document repository for validation and control.
At the same time, Integral was implementing a new ERP system, so the accounts payable system needed to be able to automatically populate the ERP with data from the processed invoices. This complication also necessitated a phased implementation approach.
As well as improving efficiency, reducing waste, and streamlining processes, a further driver for Integral was a desire to be less reliant on paper workflows in order to improve its sustainability.
Direct benefits of a smart accounts payable solution
Ricoh’s DocuWare-based accounts payable solution is now making a profound difference to the way that Integral processes its incoming invoices. As well as the improvements in efficiency, productivity, business agility, and customer service, this is reducing the incidence of late payments by some 17%.
Acting as a central repository for all supplier invoices and statements and associated documents, the solution reads incoming emails by using parameters such as the supplier’s name, to automatically categorise them. It also applies intelligence to document sorting, For example, a higher value or urgent invoice is prioritised. It has defined workflows to deal with inconclusive or exceptional invoices. Again, for example, those with invalid or incorrect details, those with high values that need secondary approvals, and those that do not require a Purchase Order number, such as utility bills.
Using DocuWare’s OCR capabilities Integral is now able to transpose data automatically from invoices into its accounting and ERP systems. Ricoh has been working with Integral all the way, to support some of its bespoke needs. One example of this has been the customisation of DocuWare to handle DRC VAT, a construction industry VAT treatment, specific to Integral needs.
Integral’s future plans
Integral plans to roll out its new smart accounts payable solution across the business, unlocking more and more benefits as it does so. As well as more efficient responses to queries there are fewer data input errors, payment errors, email rules, addresses, and document folders. And, of course, the significant reduction in late payments as already mentioned. This all helps to enhance customer service.
In addition, the company says that it is benefiting from greater visibility of its accounts payable process, with easier and improved reporting. Integral’s Head of Finance Transactions and Controls, Sarah Pearson, refers to a “single source of truth” which has been established by the DocuWare solution. Enabling the firm to manage its once labour-heavy invoice processes more accurately and effectively.
For Sarah Pearson “the beauty of DocuWare is that it’s incredibly flexible and works with us and at our pace as we develop and improve how we operate. Our smarter accounts payable solution is core to enabling us to move to a paperless, automated process. Fundamentally, it is changing the way our accounts payable system operates and improving on-time payments.”
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The direction of travel is clear. Accounts payable, alongside other finance functions, is becoming increasingly digitised. And businesses such as Integral are already learning that customers and suppliers appreciate enhanced levels of service and certainty. Whilst their own organisation also stands to gain a wealth of benefits around efficiency, staff productivity, and sustainability.