Back Office Is Front And Center In Optimization Wave

How big of a problem is manual data entry and processing? Too big.

“Fifty-one percent of participants in a recent study identified manual data entry and inefficient procedures as the biggest pain point they faced, with manual invoice routing, lost or missing invoices and invoice-to-payment matching taking second, third and fourth places at 37 percent, 33 percent and 31 percent, respectively,’” according to the new Back-Office Optimization Playbook done in collaboration with Coupa and TransferMate. Clearly, there are issues.

The Playbook also calls out “three-way invoice matching — in which staff must compare invoices to purchase orders and goods received notes,” and the frustrations that brings, but automation can reduce these stresses by matching these invoices automatically.

Back office modernization is in the spotlight like never before, and solutions that streamline accounts payable (AP) and accounts receivable (AR) functions are in high demand.

PYMNTS’ new Back-Office Optimization Playbook done in collaboration with Coupa and TransferMate brings together the latest news and developments in back-office optimization technology and practice, and makes a valuable resource for accounting pros.

Capital Management Leans Into Digital

Noting, “The COVID-19 pandemic has been a game-changer in the capital management field, turning what was once a strictly financial matter into one of managing personal relationships and leverage,” the Back-Office Optimization Playbook states, “It can be exceedingly difficult for businesses to cope with the new normal, but advanced data analytics methods are being developed to give them the edge.”

Into that void steps artificial intelligence (AI)-powered liquidity management systems. As the Playbook observes, these are “similar to automated inventory systems in that they can predict when cash will be necessary to have on hand and in what amounts. Many changes in liquidity demands are seasonal, such as around the holidays, when businesses see higher sales and inventory reordering. Automating capital management can keep organizations from scrambling for last-minute funding from banks to ensure there is enough cash on hand, thus limiting stress on treasury professionals and preventing excessive employee turnover.”

AP and AR automation are also integrating with corporates’ enterprise resource planning systems and “seamlessly processing supplier and customer invoices with minimal human intervention. A recent survey found that 74.2 percent of finance leaders are evaluating or investing in AP and AR automations, with 67 percent focusing specifically on AI- and ML-powered systems,” per the new Playbook.

Platforms Streamlining Mass Payables

Give that a 63 percent of U.K. businesses in a recent survey reported receiving duplicate invoices, that’s just the tip of the manual and paper iceberg. Avoiding such mistakes requires advanced automation technologies and the various AI-driven platforms that companies are employing to strengthen capital management.

“With the introduction of automation, companies can control cash flow while eliminating errors and the time spent with reconciliation,” TransferMate CEO Sinead Fitzmaurice told PYMNTS. “Companies are able to increase transparency and create stronger capital management through mass payables platforms … which remove the need for manual processes and paper checks. This allows companies to get back into the driver’s seat when it comes to the payables process.”

Sometimes there are pros and cons to weigh in new integrations, and sometimes these decisions almost make themselves. There’s a lot of that in the year of COVID.

As the new Back-Office Optimization Playbook concludes, “No part of the business world is easy to navigate, and there will no doubt continue to be challenges in the capital management space. Automation could go a long way toward streamlining some of these problems, however, freeing up treasury professionals to focus on more pressing duties.”