Where to start your digital transformation?

This article first appeared in the Autumn 2017 issue of The Record.

Digitisation is upon us and it’s changing the way businesses in all industries work. Companies are exposed to constant pressure to reinvent themselves and to increase efficiencies and transparency. Automation and digitisation are becoming a need of the hour and a key differentiator for many companies across the globe. However, the main problem is knowing what to digitise and automate. It’s not just about a single process, and it’s most certainly not about the business goals alone.

Organisations, governments and society are increasingly being confronted with considerations that are not directly related to their actual business, such as regulatory compliance. Increasing regulations related to corporate data communication makes compliance a growing priority for companies and organisations. However, the laws are complicated and differ from country to country, making it especially hard for global corporations to comply and the penalties for non-compliance can be significant.

We are all aware that we need to transform our business processes and that the benefits of doing so are huge, but where do we start? Which are most suitable and profitable?

Accounts payable is one of the most unstructured of all financial processes in businesses today, making it the prime place to improve your organisation’s profitability by adopting an automation initiative. It is also one of the most resource-intensive administrative processes, as well as one of the most prone to human error. A misplaced invoice or duplicate payment takes several people a lot of time and effort to resolve.

Automating the accounts payable workflow is a guaranteed way to save your company both time and money. Processing a single invoice manually costs anything from €15 to €50 (US$18 to US$60), depending on the business and technology involved. Introducing an automated accounts payable solution can cut that figure by up to 50% per invoice. For an enterprise, the potential saving is substantial, and that’s without mentioning the number of resources that are freed up in the finance department.

Cost control is critical for any profitable business. Full visibility over the accounts payable workflow is essential, yet many companies still use a manual approach based on invoice copying and invoice searches. In these environments, companies can never achieve full transparency until the invoice is posted. When your organisation transitions to an electronic workflow, every invoice is registered upon arrival and administered electronically and you get full control of the costs and coding status in real time throughout the whole workflow.

In general, control is one of the most important factors for any finance department. When it comes to invoices, this primarily involves approval routines, amount limits and internal rules. An automated workflow will give you full visibility of the approval chain, including who previously approved the invoice, and any price/quantity differences. Naturally, you will also be able to access the invoice images and approval status from all relevant parts of the enterprise resource planning (ERP) system.

Accounts payable automation also ensures that your company meets all compliance regulations at all times. The automated system leverages the rules, validations and regulatory requirements already implemented and proven in your ERP solution. It also provides a complete digital history of every document, which gives you full transparency and makes audits easy.

Another key issue to consider when looking into digitally transforming the accounts payable process is the amount of time that can be freed up from business users, managers and senior decision makers. Manual two- and three-way matching processes – which ensure there are no discrepancies between an order, delivery and payment – are very labour intensive and it can be difficult for employees to accumulate the required information, making it a perfect process for digital transformation. By using rule sets such as agreements, purchase orders and delivery reports to match information on the invoice, the system will only forward the invoices with discrepancies to a business user for approval.

When choosing your accounts payable automation solution, it can be difficult to calculate exact costs and savings, but one thing is undeniable – system integrations are extremely expensive to maintain. Add to this the delays in information caused by data synchronisation, operational downtime resulting from systems being updated, increased support requirements and more expensive license costs and it leads to a major increase in the total cost of ownership. According to a Radar Group survey, system integration expenditures can reach up to €15,000 (US$18,000) per year for each standalone application that is integrated, compared to applications that are built into the ERP system.

Leading organisations have come to recognise that the traditional large-scale projects to migrate all current processes to a digital world often take a long time to deliver impact, and sometimes don’t work at all. Instead, successful companies are reinventing processes, challenging everything related to an existing process and rebuilding it using cutting-edge technology. So, ensure that your solution achieves the most out of your existing system with minimum effort and maximum benefits.

At SignUp Software, we have chosen specifically to offer solutions that are completely built into the Microsoft’s ERP systems: Dynamics AX, Dynamics 365 for Enterprise and Dynamics NAV. Having an accounts payable automation application built into the ERP significantly reduces the implementation costs, change management and integration issues. A built-in system such as SignUp Software’s ExFlow provides a proven low cost and rapid implementation that is a perfect starting point to automate your systems and provide a quick return on investment.

Our customers agree. “ExFlow, without any doubt is the best accounts payable automation solution for companies working in Dynamics AX because it is completely built into the ERP system,” says Fredrik Holmberg, CIO at BLS industries. “There are many pros to working with a built-in solution. Looking at it from a security perspective, you would not want anyone to pull data from the ERP system, process it and then push it back in again.”