After years of sitting in the back-office with their files, calculators, and scanning machines, modern accountants are finally moving on up, way up – to the cloud. Surprisingly, almost 95% haven’t made any major upgrades, leaving them to compete against the next generation of finance leaders.
But first, what was wrong with the old way?
A survey conducted with 250+ CFOs during COVID-19 found that seven in ten accounting teams were spending 520 hours per year on manual accounts payable (AP). That’s two hours every day doing repetitive work like checking invoice accuracy, getting approvals, finishing data entry, and moving invoices through internal systems. CFOs recognize the limitations but are too preoccupied by the pandemic to bring change.
What does this mean for businesses? Companies that are starting to see a big revenue spike admit that they were previously behind in their use of technology.
Due to the late adoption of new tech, the financial stack has been largely unchanged.
transformation, but with a great big T
Digital transformation wasn’t considered a priority, but that view is changing fast. Before the pandemic, companies figured it would take at least one year to accommodate remote work. In reality, it only took 11 days; that’s 40 times faster than originally forecast.
As 2020 has proven, working from home isn’t just possible, but it’s also preferable. No longer tethered to the office, accountants have never been more eager to adopt SaaS (Software as a service) tools and to transform their AP.
By automating expenses, companies save employees a great amount of time filling out reports.
The whole process is quick and simple. For example with Beanworks, the employee can snap a picture of the receipt on the mobile app and submit it for approval to their line manager, who can then make the approval online or on their phone. From there, the AP team can electronically reimburse the employee.
A survey of 600 finance professionals showed that 46% of accounting teams don’t track the costs associated with manual expense management. Of those that do, almost a quarter say it costs more than $11 per report; for 8%, it’s an eye-watering $31 or more. Technology cuts that down to less than half. Still, the cost isn’t the main driver for automation. For most companies that have invested in or are planning to adopt expense automation, simplifying the process for employees and managers is one of the main reasons for the move.
Around the world with hasty payments
Making frazzled calls to vendors to negotiate extended payment terms or to explain why a transaction was delayed – tech-enabled teams don’t have time for that. A digital payments platform connects directly to the vendor’s bank account for easier reconciliations.
For most businesses, the first point of contact when paying an international vendor may be through a bank, which can require a lot of different pieces of information from a vendor before they will clear the payment: an extremely inefficient process. Beanworks AP automation will reduce the steps of reconciliation and make the process easier.
“There is almost nothing that can’t be accomplished with technology these days and it takes an open, creative CFO to understand that.” – Matt Putra, VP of Finance, New Market Funds
Finance leaders are investing in a strong understanding of technology that will allow them to scale their team and the business.
As well as old-style invoicing being slow and tiresome, approval delays are another reason for AP being too complex. With Beanworks, that problem is easily solved. A digital trail allows accountants to view the status of an invoice in the approval workflow, including whether or not the manager has logged on to the system; it’s easier to identify bottlenecks that cause such delays. Regardless of managers being in office or away, Beanworks keeps your approvals moving.
The need for speed
The most profound effect of automation on AP is the speed at which teams have access to financial insights. Forward-thinking CFOs replace disconnected systems with one solution that houses data from all segments. “We want to close the books faster. Every month of data we can get in this new normal will help us forecast.” Rob Goldenberg, CFO of customer engagement software company 6sense, tells CFO dive.
Beanworks is one of the few AP automation providers that integrates all AP workflows (purchase orders, invoices, payments, and expenses) in one system and syncs with the company’s financial system. This means a single, holistic view of all things AP.
Code and effect
Modern finance teams are moving away from makeshift models; leaning into futuristic avenues such as learning how to code, using data efficiently for financial planning and growth.
“The new CFO must be tech-savvy to help take a firm into the future. They cannot delegate this work and understanding to the tech team but must work hand-in-hand with them to get the best results for the business. There is almost nothing that can’t be accomplished with technology these days and it takes an open, creative CFO to understand that.” Matt Putra, VP of Finance, New Market Funds.