Year-End Planning: 4 AP Goals to Aim for in 2021
From increasing efficiency to saving time and money, automating AP can help financial institutions achieve four milestone goals in the new year.
What financial institution doesn’t want to save time and money? Or streamline cumbersome back-office processes? There’s no better time to make these goals a reality than at the start of a fresh new year. Good news — it doesn’t have to be difficult.
Automating AP can help FIs achieve several key goals that can dramatically impact operations. This is no longer a trend to look out for in the distant future. In fact, the adoption of automation has become crucial for FIs that want to stay relevant and keep pace in an increasingly competitive (and digital) landscape.
The COVID-19 pandemic is not the only reason that FIs are turning to automation en masse, but it certainly provided strong impetus, especially for those who had not begun their digital transformation to that point. FIs that were already leveraging automation found that they were able to weather the storm of coronavirus-related disruptions with far greater ease.
Right now, it’s more important than ever for FIs to take a hard look at the cost benefit analysis of automation, with many banks still working remotely, and many AP teams not slated to return onsite for the foreseeable future.
Here are four key goals that automating AP can help FIs achieve in 2021:
Eliminate Paper & Manual Processes
What exactly are we eliminating? In a word, paper. The old way of doing things in the world of AP is slow, cumbersome and redundant, and involves paper-heavy processes that keep hard-working AP professionals from being able to get ahead of the curve.
Many FIs looking to meet the demands placed on them by remote working are eyeing the elimination of paper checks and invoices as a critical starting point. This move is borne of necessity. A huge number of banks are just now sending a handful of employees back to work, and every time someone has to go into a branch for the express purpose of managing paper checks or invoices, is one more time that an employee is needlessly sent into harm’s way.
Branches are here to stay, but they will need to learn to operate within a new framework brought on by unexpected disruption, changing consumer demands and an increased reliance on digital customer service. FIs that want to optimize efficiency will start by eliminating paper, especially paper checks and invoices, as the first priority for the AP department in 2021.
Imagine the impact on your AP department if you could completely automate your approvals process and ensure efficiency with total control over tracking and auditing. Just think of how much more you could get done in the course of your day if you didn’t have to track down invoice approvals and could instead rely on a user-defined workflow that easily automates approvals for everything from invoices and vendors to expense reimbursements and requisitions.
Welcome to the new reality that is automated accounts payable. It may sound too good to be true for AP departments stuck in the dark ages, still slogging through loads of paper and chasing down approvals for every invoice that comes down the pike. But there is a better way. Automating AP enables a streamlined approvals process with the ability to assign customized rule criteria, based on inputs such as user, vendor, vendor type and minimum/maximum amount entered, to name just a few.
By eliminating paper-heavy, redundant AP tasks, and streamlining approvals, you can turn your focus to more strategic objectives.
Cut Costs While Improving Productivity
Manual AP workflow doesn’t just cost FIs a bundle of money. It’s also a time-intensive process rife with redundancies, such as writing and signing checks, stuffing envelopes, and all too often chasing down checks or invoices that may be inaccurate or missing altogether.
Steering away from the outdated, traditional way of processing AP allows FIs to save money, not just on the cost of all of that paper and postage, but critically, on the numerous hours saved that you will now be able to leverage toward more strategic goals.
With automated AP, you can rest assured that your GL is accurate and up-to-date, and that your financial reporting is comprehensive and trackable. With this level of organization, you can actually dedicate time to strategic planning, such as how to take the greatest advantage of early payment discounts, volume rebates and other vendor incentives.
Automating AP makes possible a distinct shift away from mechanical accounting functions, to a strategic management mindset where employees are empowered to improve efficiencies and advance their own careers in the process.
Prevent Accounts Payable Fraud
AP fraud is a matter of serious concern for FIs both large and small. Preventing fraud is undoubtedly at the top of the 2021 priorities list for banks and credit unions, and for good reason.
Consider that the Association of Financial Professionals (AFP) found that over 80% of organizations were targets of payments fraud in 2019. Cybercrime became even more prevalent in 2020, as sophisticated scammers sought to take advantage of huge numbers of people turning to online banking, with limited to no access to branches or personal bankers.
Perhaps an even more relevant statistic for AP departments to consider is that 74% of businesses that experienced AP fraud in 2019 were targeted via check, up from 70% in 2018, according to the same AFP survey.
The bottom line is that even scammers know where the weaknesses in the AP department lie: in those stacks of paper, envelopes and invoices. Most fraud within FIs can be linked directly to how much time it takes to manually process AP, and the inefficient workflow this uncovers. With no centralized repository through which all payments can be safely and securely processed, fraud is much easier to perpetrate, and avoidable mistakes are too often committed.
Contact us today to learn more about how BankTEL is helping credit unions and banks position for success and growth in 2021.