Dan Drees, Chief Growth Officer, AvidXchange
Optimizing operational efficiency is a priority for all businesses. Who isn’t looking for ways to cut costs while saving time and increasing job satisfaction, especially in these uncertain economic times?
Technology can play a significant role in creating time and cost savings in almost every business function. In fact, an Atlantic IT survey found that workers spend an average of 520 hours per year on repetitive tasks that could easily be automated. This echoes a similar recent finding that 67% of workers feel like they constantly repeat the same tasks and that the average worker feels like they spend four and a half hours a week on such mundane activities.
Financial services is a business area particularly ripe for digital transformation. Many key aspects of accounting and finance, including invoicing and payments, are intrinsically tied to old ways of working. Cumbersome, paper-based manual processes monopolize and consume valuable time and resources, disrupting the efficiency of Accounts Receivable (AR) and Accounts Payable (AP). As a result, talented professionals are pushed away from the more value-added, strategic work they could do for their business.
Advanced technologies, especially application programming interfaces (APIs), machine learning, and robotic process automation (RPA), are increasingly being used in automating accounting processes. All of these solutions go a long way to making life easier for finance professionals. As a disclosure, my company AvidXchange is a provider of all three solutions.
Here’s a look at the roles these three technologies will play in the future of accounting and how finance teams can start leveraging them today to start reaping the benefits.
1. Enable technology communication via APIs
APIs are a type of software that allow computer programs to communicate with each other. They are perhaps considered one of the most important technologies in finance today because, without them, other technologies cannot reach their full potential.
In finance and accounting, APIs unlock data in software-based computer applications. They then facilitate transfers between software, applications and computer systems. For example, in AP automation, APIs are able to unlock payment and billing data and allow AP software, accounting software, and enterprise resource planning (ERP) software to exchange these information quickly and without user intervention.
APIs help unlock operational efficiency by transforming an accounting software system into a more capable financial management platform. This platform can help teams generate more business while improving productivity and customer experience.
They facilitate, accelerate and make more reliable the exchange of data and functions, such as the transfer of payments and invoices between companies. As more and more API integrations are established, financial services gain more versatility to conduct financial transactions efficiently and affordably, making the enterprise global more attractive to potential customers.
2. Take data to the next level with machine learning
Data is a powerful asset, and financial services have a lot of it, including payments, invoices, cash flow, and customer data. As companies realize the value of their data, they are looking to find new ways to use it to generate more value for their customers.
When harnessed, data can generate valuable insights that can be used to guide important decision-making and better serve customers through more personalized services and faster payments.
Machine learning, a type of artificial intelligence (AI), can move this information to the next value. By analyzing historical data, machine learning is able to not only detect patterns of behavior in supplier payments and invoices, but also predict the likelihood that these behaviors will continue.
In accounts payable automation, machine learning can be leveraged to make predictions about the market as well as supplier payment risks. It can also be used to detect possible future increases or decreases in expenses as well as the statistical probability of occurrences such as billing anomalies or fraudulent checks.
3. Reduce manual tasks with RPA
Finally, RPA is a software tool for automating repetitive work processes that cost companies time and money. Think about tasks that require entering raw data over and over again. RPA essentially allows computers to take care of these repetitive and large tasks so that your team is not constantly distracted by them.
But RPA goes beyond eliminating repetitive tasks. With the time saved, members can fully concentrate on higher value-added responsibilities. They are able to think strategically, identify new opportunities to forge change and strengthen and grow their organizations.
For example, the task of matching invoices to purchase orders or receipts is one of the most time-consuming and frustrating components of accounting work for many finance professionals. Using a three-way matching system in an automated AP solution, employees can easily confirm that the information on the purchase order, invoice, and receipt are all aligned.
Triple matching doesn’t just have the power to save time and convenience for your professionals. It’s also good for business, as it greatly reduces the risk of human error in such situations, which can damage relationships over time, and allows for easier audits. This solution also offers protection against overpayments, duplicate payments and fraudulent invoices.
Leverage technology to improve operational efficiency
Even more important than understanding these revolutionary accounting tools is realizing how they can benefit an organization. To achieve this level of awareness, finance departments must first begin by examining what is eating up their time and budget. In doing so, teams can identify where pain points lie and identify appropriate technology solutions to solve, streamline, or even eliminate recurring employee challenges.
By modernizing the accounting department with tools such as accounts payable automation, APIs, three-way matching, and RPA, organizations can reduce costs, save time, and lighten staff workloads so that they can perform at their best, providing a particularly powerful new competitive advantage in difficult times like these.
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