A new survey shows that CFO’s feel they are losing out on the most important contributions their finance teams can make as a result of too much time spent on low value-added tasks.
One of the major benefits that result from automating financial processes like accounts payable and accounts receivable is the freeing up of staff time to work on more strategic initiatives. Now, a new survey actually measures what this could mean to CFOs. Each month, CFO.com publishes the “Metric of the Month,” that measures findings from APQC’s Open Standards Benchmarking database. This month, the article covers “How Finance People Spend Their Time.”
What APQC, a member-based non-profit that offers benchmarking, best practices, process and performance improvement, found that in companies of all sizes, finance teams spend about half of their time on transaction processing (49%). But what companies need most from their finance teams is a focus on initiatives that will increase company revenues and profitability. When asked directly by APQC what specific things should get attention, finance executives said, “They want their teams thinking about the changing customer base and effectively analyzing the risks inherent in company growth strategies.”
But the bills still need to be paid, and transaction processing needs to occur. How these processes are handled makes the difference. Companies that have automated their P2P processes have eliminated the inefficiencies and errors inherent in manual processing of paper invoices. The survey noted that many companies still receive 60% or more of their invoices as paper or PDFs and processing these documents takes precious time away from other necessary, value-added tasks.
Companies that have increased productivity through workflow automation are able to process more invoices in less time while reducing costs. The Aberdeen Group estimates that when it comes to finance team performance, best-in-class companies that have deployed workflow automation can process an invoice in 3.7 days vs. 8.8 days for average companies and 14.3 days for those on the lower end of the business spectrum. The cost to process that invoice is $4 for best-in-class companies vs. and average of $9.60. The companies that have initiated no new processes spend over $23 to process that same invoice. It’s clear that utilizing the right technology and automating your financial processes can quickly transform your AP team.
And this streamlining of processes affects the entire P2P continuum, positively impacting procurement teams as well as AP and AR teams. Everyone benefits when companies can reduce transaction processing time (this includes POs and ASNs, as well as invoices) and reallocate talent towards decision-making, supply chain improvements, and cash flow management.
The CFO article makes it very clear that companies really need to measure the amount of time and cost spent on low value-added, but necessary tasks and then assess how automating these tasks will help the company’s growth.
Learn how automation can streamline your P2P processes.