Imagine: you’re a treasurer and you’ve built a rock solid financial forecast for the month to lead your company to further growth for the year. You’ve got your funds allocated and budgets approved. Then you discover a large invoice right before payment. It’s huge. Like, a trainload of aluminum. There goes your plan.
Or maybe you’re an AP professional and you’ve scheduled a payment. Your forecast for the month has ample funds to pay. Treasury comes in and tells you to hold off on that invoice because it’s not aligned with the cash management strategy. Now you have an angry supplier calling nonstop looking for payment.
Your job is changing in a rapidly automating world. Companies are pushing for faster-processed invoices and robust financial growth plans yet, 50% of businesses are still using paper and spreadsheet systems. The traditional roles of finance are expanding, but antiquated processes are making it harder to do the strategic planning you were hired to do. Automation is the future, and it can be used collaboratively. To fully utilize its potential in your finance department, build automation into your buy and payments processes so you can branch out of your departmental silos and collaborate across the whole finance team.
Here are four ways you can use automation collaboratively to achieve your financial growth goals.
Early payment investment
The financial department takes care of cash management, and naturally, AP is a cash distribution part of the department. When the manual processes that slow down the AP department are automated, AP can process invoices in a fraction of the time. The faster payments are sent to your suppliers, the more potential you have for early pay discounts. This is great news for the whole finance team. With AP Automation, accounts payable can share data across all areas of cash management. AP can instantly show the whole finance team early payment returns, giving more flexibility into company cash flow strategy. All that information helps the finance team plan how the company can use early pay discounts to fund growth.
To manage cash effectively, finance needs as much visibility into cash management as possible to make strategic decisions for company growth. A fully digitized AP department has instant visibility into all business documents, including items like invoices, purchase orders, and credit notes, to share with Treasury. So the entire finance department will have more input into payment terms, get a better understanding of when payments are made and will be able to make strategic decisions with AP on when to pay whom. Treasury gets insight into valuable data, and AP grows into a strategic role as they align their work with the larger company working capital goals.
Traditionally, Treasury has focused heavily on risk management, but that job has become a lot harder after regulatory changes and further globalization. But Treasury and AP can leverage their data to more quickly implement ‘know your customer’ procedures. Fully visible data across the finance team allows you to not just look for the cheapest suppliers, but look for the safest suppliers. That’s a win-win because you can choose a cost-effective option, and achieve corporate social responsibility goals.
Allies for a strong company
Maybe both departments are fully digitized. Maybe they aren’t. In either case, Treasury and AP can work together to recommend technology to make both jobs more nimble and less reliant on hand gathering disparate data. Treasury can take AP’s data to the executive board and recommend more resources to foster investment in a robust automated workflow for all your buying and spending.
Take these tips and transform your finance team into ar new quick-stepping, intelligent, and transparent collaborative department!
See how ADM transformed their manual processes to streamline their supply chain finance strategy.