In the midst of the COVID-19 pandemic, employees are working remotely in record numbers. Meanwhile, companies are recognizing that they need to put processes in place that sustain business operations from anywhere. More specifically, financial services organizations are seizing opportunities to improve their processes for making and receiving payments.
Accounts payable (AP) teams have historically invested a substantial amount of their time and resources into performing manual tasks like mailing checks, chasing invoices, and improving profits. This is no longer just inefficient; in the new workplace normal, it’s completely unsustainable.
Knowing this, AvidXchange teamed up with the Institute of Finance & Management (IOFM) to produce a report, titled Finance Leaders Adjust Strategies to Come Out Stronger in Extraordinary Economic Times. The report explores how companies are rethinking the way they handle AP functions and investing in technologies to improve processes. Here are some of its key findings.
Remote work is here to stay…
When the pandemic emerged in the United States, state officials quickly mandated social distancing and stay-at-home orders in an attempt to prevent the spread of the disease. This forced entire workforces to shift remote with little to no notice.
While traditional employers were largely wary of the change, their opinions toward remote work are shifting as they realize how effective it can really be. As a result, many are now reconsidering their traditional in-office work requirements.
In fact, a recent Gartner report found that 82% of companies plan to allow employees to work remotely at least some of the time after COVID-19 ends; 47% will allow their employees to work remotely full-time.
…Which has underscored the need to upgrade manual AP processes
While inefficient manual processes have long needed fine-tuning, the unprecedented and likely permanent shift of the workforce has made the need to upgrade even more urgent.
In addition to needing tools and technologies that enable them to do all functions of their job no matter where they are, workers need better protection from the cybersecurity threats that come with working on insecure personal devices and unprotected home networks.
Payment fraud is up 20% and credit fraud has increased by more than one-third since COVID-19 began.
These lapses in security caused by the pandemic are already taking a toll on AP teams. AvidXchange found that two-thirds of AP employees are more stressed than usual, with most reporting working longer hours, losing sleep, or being woken up for work communications.
Many AP workers in organizations unprepared to meet stay-at-home orders had to drive into the office to collect invoices and print checks, take them to the home of whoever had signature authority, and drive to the post office to mail payments.
Simply put, this isn’t working. IOFM’s recent study of more than 400 AP departments found that a mere 40% of all AP groups are paying their invoices on time in 2020. The good news is that there are better options out there for companies looking to automate.
Electronic payments solve the challenges that arise from manual AP processes
Companies looking to embrace AP automation and improve cybersecurity are increasingly turning to electronic payments. Unlike paper checks, electronic payments enable same-day funds transfers, give teams more security and control over cash flow, and streamline processes by removing unnecessary steps like having an employee drive into the office.
Automated electronic payments are also cheaper than paper checks. Goldman Sachs has estimated that businesses in North America spend an average of $22 to pay a single invoice with a paper check, adding up to a staggering $187 billion per year on payment processing costs.
In other words, automated invoice processing is more economical, convenient, and effective than manual processing. To make this shift—and to be successful in the new world—organizations must make investments in automated AP technology.
AvidXchange and the IOFM’s report goes into significantly more depth about how finance professionals are seizing COVID-19 to make improvements, rebuild, and come out stronger than before.
Fill out the form below to access the report: Finance Leaders Adjust Strategies to Come Out Stronger in Extraordinary Economic Times.