The Revolution of Finance Departments
Technology has a tendency to change everything. What used to take of labor hours now takes minutes and that trend is prominent in finance. Automating and outsourcing accounts payable is revolutionizing finance departments around the world and many of the advancements are so easy to implement that even the smallest companies are able to reap the benefits. While the scale of the transformation each finance department experiences will vary between companies and transaction volume, some changes are universal.
Staffing reduction has been one of the biggest areas of change for finance departments. As little as five years ago, it would take a large staff thousands of hours every week to track orders, process accounts payable invoices, enter payroll, and distribute employee checks. Today, with automation integrated into these steps, it takes just a fraction of that time. One company, Pilot Travel Centers, with its many gas stations and truck stops, dropped from 80 employees spending 3,200 hours a week to just 10 employees working a combined total of 400 hours.
When you are able to reduce that much manpower while accomplishing the same tasks, the cost savings are significant. On top of the staffing costs companies save from automating and outsourcing accounts payable, there are technology, paper, and storage costs eliminated. All that paper adds up! Using paper in the office costs anywhere from 13 to 31 times as much as the paper itself between the shipping, printing, disposal, and postage. For example, when Citigroup took a look at how much it was spending on paper processes, it found that if each employee saved one sheet of paper per week the company would save around $700,000 per year.
Accounts payable tasks, from paying suppliers to employees, can become part of an integrated whole, with one system informing the others. A valuable technology tool will provide high level overviews and granular detail in one place. For example, a manager can review spend over their locations or all the expenses related to a task can be associated with a larger Project for quick access to analyze and gauge profitability.
There is also the issue of business intelligence. When accounts payable processes are automated or outsourced, there is a lot of data collected. With the right tools, this can lead to insights that companies just couldn’t get before without a great deal of time and effort. By being able to quantify actual costs and tie those expenses directly to projects, employees, and outcomes, companies are able to improve forecasting.
Companies that automate or outsource their accounts payable are able to guarantee accuracy like never before. This means that forecasts are accurate and financial reporting and compliance are much easier. Financial statements can be generated at the touch of a button, along with reports about project profitability and even employee efficiency.
The technological revolution of finance departments is leading to big changes in manpower, costs, and intelligence. Together, these differences lead to improved accuracy amongst systems and greater efficiency as departments become integrated like never before.