Technology taking on a life of it’s own in accounts payable
I often recall the image of the Dickensian bookkeeper when I look at an AP department. In the 19th century, ledgers were hand written with quill and ink, sometimes in triplicate, which meant doing the same things, literally, again and again. Today, we still have pieces of paper to record the details of a business transaction. In an age when we can trade coffee, oil and pork bellies in the blink of an eye – in an age when even pre-school kids are computer literate – what place is there for paper?
Business process automation isn’t just about eliminating the paper. It’s about what can be done once it’s eliminated – once the ties of Dickensian methods are removed. Get rid of the manual process and you can do some serious business improvements. Today, it takes most businesses about 3 weeks to be in a position to pay an invoice. That’s because of manual processes. Using AP automation an AP team can pay, theoretically, in a day. And fast payment has a value. Why not extract that value for commercial benefit? It isn’t rocket science.
It used to be that people would watch the technical marvels of business and dream – “if only we could do that”. From steam locomotives to the spinning jenny, business benefited from technical innovation first then we all benefited later as the innovations were slimmed down for personal use. But that’s all changed, at least when it coms to computing innovation. Increasingly consumers are beating business to it. Perhaps because people individually can be more agile (or fickle) they can embrace new technology on a small scale more quickly than business can on a large scale so we see things like social media and smart phones gaining critical mass amongst consumer before business has even taken notice and now we’re seeing BYO technology and social media forcing change in many businesses. Increasingly, people are coming to expect that leading edge technology is deployed universally in business.
What used to be a good idea in theory is now a good idea in practice. In AP, thanks to the now widely accepted technology of electronic invoicing, “Wouldn’t it be a good idea if we paid early” has become “We can now pay early. Why aren’t we doing it?”.
The old fashioned way – the paper way – had costs built into it. There were delays and manual process do take time. For a supplier, the time to get paid needed to be funded. In the modern world where payments can be authorized and paid quickly, that’s a waste of money. Businesses that resist change in the face of the rapidly evolving technology landscape will continue to waste money and will lose out in a big way.
Pete Loughlin can be found on twitter @peteloughlin