When the pandemic drove professionals to work from home, business leaders began accelerating their digitization roadmaps. Accounts payable (AP) and accounts receivable (AR) personnel could no longer be in the office to handle paper, giving rise to the discussion of migrating away from physical invoices and other documents in favor of digital, automated solutions.
In theory, the pandemic has pushed corporates to make significant progress on their modernization efforts. In reality, however, paper continues to circulate in AP and AR departments. According to the November Back-Office Optimization Playbook, a collaboration with Coupa and TransferMate, 51 percent of AP professionals continue to cite manual invoicing as their biggest pain point resulting from the COVID-19 crisis.
In the first half, organizations faced an immediate need to keep business flowing in a remote work environment and to navigate the sudden disruption. It wasn’t until the second half of the year, she said, that organizations were truly able to prioritize the acceleration of their digitization journeys. Now, with 2021 underway, organizations will begin to demonstrate the progress they’ve made as they move from digitizing workflows to optimizing payments and finance.
Fitzmaurice, along with Coupa Executive Vice President Ravi Thakur, discussed how businesses have made further progress into the new year — and what’s next for organizations as their solution providers drive up value by fostering an ecosystem of integrated functionality.
Accelerating An Existing Change
Though remote working kicked off nearly a year ago, it’s only in recent months that organizations have been able to consider how to implement digital tools to drive long-term efficiencies. According to Thakur, it took some time for businesses to figure out how to execute digitization projects that hadn’t initially been planned in corporate roadmaps.
At the same time, noted Fitzmaurice, the pandemic offered the opportunity for finance leaders to take action on concepts they had been considering for years.
“The need to remove friction points is not just a 2020, pandemic-driven need,” she said. “This has been around for decades.”
Now that financial technology is available to businesses, chief financial officers (CFOs) have more options in their toolkits to take action. With invoice processing and paper documents still a source of immense friction, AP is a logical focus for many digitization efforts today.
To demonstrate the pervasiveness of this pain point, Thakur pointed to one example of a Coupa client. This public-sector firm had historically been manually extracting invoices from their enterprise resource planning (ERP) system, plugging that information into a spreadsheet, and then manually remitting that data for each supplier and uploading information into various banking portals.
When an organization is operating with several different ERPs, dozens of banking relationships and thousands of suppliers, the paper-based workflow is simply unsustainable, with a major opportunity for fraud and human error.
The Platform Approach
As both Thakur and Fitzmaurice explained, however, the pain point of manual AP processes cannot be solved by the mere digitization of paper invoices. Indeed, transforming key financial workflows like AP must involve a data-driven approach that includes the seamless integration of information across systems.
Centralizing data into a single system across a range of functions — including invoicing, payments, spend management and more — means faster access to the vital information necessary to make decisions. For this reason, FinTech platforms — and collaboration between solution providers like TransferMate and Coupa — are proving to be increasingly valuable to CFOs along their modernization journeys, thanks to their data connectivity capabilities.
“When you can improve the speed at which you can access information, decisions based on that information can be much more real-time,” noted Fitzmaurice.
Connecting transaction data from B2B payments with spend management technology means not only moving money faster, said Thakur, but also obtaining greater agility in the management of financial data that can provide a clearer picture into how organizations can (and should) manage their assets.
“When you look at the benefits and value that an organization needs, it’s companies like ours coming together to combine innovations across very different processes to create unique workflows,” said Thakur.
Finding The New Normal
In the immediate wake of remote working requirements, CFOs’ first priority was to keep business operating. As the months passed, finance leaders had the opportunity to take full advantage of the technologies available to them to optimize the way finances are managed — not only to facilitate professionals working from home, but to future-proof the enterprise.
As organizations continue to make progress, there are other key opportunities in which integrated technology and data connectivity can break down silos and pain points. One of the biggest, said Fitzmaurice, is in cross-border payments. The lack of transparency and efficiency in the legacy interbanking system is giving way to closed-loop workflows that bridge the gap between buyer and supplier, further fostering an ecosystem of interconnected data.
According to Thakur, the future of B2B payments and corporate finance workflows will gradually migrate from a paradigm in which such technologies are beneficial to one in which such tools are a necessity. Just as the ERP went from a “nice-to-have” option to a “need-to-have” tool, optimized business payment technologies will be the standard of the future.
“The way we’re going to look at how companies move money five or 10 years from now, it’s not going to be a differentiator or an exception,” he said. “Right now, we’re providing a differentiator for organizations in terms of how they want to operate. But that’s evolving. That’s how businesses should operate.”