4 steps to digitalizing your AP and AR process
There’s a lot of pressure on digitalizing the AP and AR process in your finance, both for the efficiency and accuracy gains, as well as for the cost savings. When speaking about it, it seems like a no-brainer. But the reality may be a little more complicated.
Many organizations struggle with multiple systems, several service providers, and partially manual processes. But digitalizing the AP and AR process doesn’t happen with old technology. Start with AP automation, then maximize the share of e-invoices, interlink those to the order and delivery processes, and continuously analyze and optimize. It may sound like a lot, but you can proceed in small, manageable portions.
Step 1: Automate your invoice processing
If you’re still handling a lot of invoices manually in your accounts payable, there’s a quick win you can start with: invoice processing automation. AP automation has been around for a while, but few realize how quickly you can go from a very low automation level to 70%, 80%, even 95% of touchless processing with next-generation AP automation and artificial intelligence.
Invoice automation not only affects how efficient you can be in the approval flow of your purchase invoices, but also adds to accuracy and brings significant savings.
Step 2: Send & receive all invoices electronically
For a digital AP and AR process, you need your invoices in an electronic format. In the accounts payable, having all your purchase invoices in one electronic format in your workflow system enables invoice automation in full-scale – and this can be done regardless of whether your suppliers send you e-invoices, PDFs or paper invoices. For the accounts receivable, then, implementation of e-invoicing means significantly lower costs than printing out paper invoices and sending them via landmail.
You get a fast start to your accounts payable and accounts receivable digital transformation by implementing all-in-one invoice sending and invoice receiving solutions. A proper solution helps you constantly reduce the amount of paper and PDFs, digitalizing your AP and AR process on the side.
Build up your O2C/P2P piece by piece
Electronic order, delivery and invoice exchange with all your suppliers, customers and other partners.
Top that with AP and AR automation.
Step 3: Exchange all supply chain messages electronically
Evidently, the efficiency of your AP and AR process is also affected by your order and delivery processes. To be able to automatically match orders to your invoices in the accounts payable, or to ensure you invoice what you delivered in the accounts receivable, you need also the orders in an electronic format. The same goes for all message types: orders, order confirmations, despatch advices, goods receipts and finally, the invoice.
It may sound like a big chunk, but you can go step-by-step. Getting even some portion of your orders into an electronic format will already benefit you greatly.
Step 4: Analyze & optimize
Once you’ve started your digitalization journey of the AP and AR process, you should look for constant improvement, step by step. Analyze the portions of your electronic, PDF and paper invoice ratios and take actions to increase the portion of e-invoices. Do the same for e-orders wherever possible.
For example, OpusCapita’s Track & Trace and reporting tools show you which suppliers are not sending electronic invoices to you, and you can take action with them. With larger suppliers, implementation of e-invoicing is usually a no-brainer, but you can easily get also small suppliers to receive your e-orders and send you e-invoices with free supplier tools.
Digitalizing your AP and AR process with the implementation of e-invoicing and automation, as well as interlinking the accounts payable and accounts receivable to the order and delivery processes, will get your costs down in a secure manner and ensure invoices get paid on time.
The old technology won’t bring you the change, though. So maybe it’s high time you looked into some future-proof Business Network solutions?
Do you find this interesting and perhaps want to look into digitalizing your AP and AR processes? Contact us and we’ll be happy to discuss your special case!
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