The economic situation for 2014 is looking more positive with organisations now gearing up for growth, planning investment and proactively exploring new markets. But at the same time, finance departments are under increasing pressure to spend time analysing performance to minimise the risk associated with post-recession expansion.
With technology evolving at great speed, finance departments should by now be well placed to provide such insight using streamlined accounts processing with real time financial information. Yet the reality is different, with very few achieving automated end-to-end invoice processing.
So why are finance departments still overwhelmed by tedious transactions? After nearly two decades of scanning technology and the push away from paper towards electronic documentation, why are almost one fifth of companies reporting an actual increase in paper, according to research from AIIM?
Sadly, while most organisations encourage suppliers to provide invoices electronically, and scan any that are still paper based, information is still manually uploaded to the finance system.
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'Paperless office' remains a fantasy
Even worse, many electronically delivered invoices are actually printed out, physically time stamped and then manually distributed around the business for approval.
So while organisations have to some degree reduced the costs associated with paper – especially if they have added Bacs payment and remittance, and removed the need to post cheques - the overall invoice management process is still fundamentally inefficient.
If done well, invoice processing is not just about imposing good operational control: it is about demonstrating that control to customers and suppliers; and releasing finance from its administrative burden to effectively manage risk in a rapidly changing economic environment.
The fact that so many finance teams are still spending the majority of their time on manual processing is, quite frankly, extraordinary, not to mention expensive. According to PwC's Unlocking Potential: Finance effectiveness benchmark study 2013, the cost of finance at average firms is more than 60% higher than at top quartile firms.
Unlocking your finance team's potential
However, there is hope. By creating a seamless, end-to-end invoice process organisations not only cut costs, but add scalability, creating the ability to handle invoice growth without adding to the finance team.
The day-to-day working environment will also change. Finance staff can spend the majority of time delivering insight, rather than transaction processing and, having captured invoice data as it enters the organisation, can provide fast, accurate information regarding commitments and cash flow.
With truly effective invoice processing, organisations will be far better placed to maximise the opportunities and minimise the risk associated with managing the changing business environment in 2014.
- Stuart Evans is Chief Technical Officer at Invu and has been instrumental in developing the company's suite of products that can automate processes, provide real-time information and offer security and compliance of critical data.