By Brian Greehan.
As we approach the end of Q3, economic uncertainty continues to dominate the news. The lingering (although receding) risk of a recession, stubborn inflation trends, economic policy debates, and geopolitical instability all create challenges for businesses and their finance teams.
These circumstances require finance professionals to be agile and proactive about optimizing operations and informing the business with accurate and timely financial data. With that in mind, I see four key areas that deserve their attention for the rest of 2023:
- AR and AP Efficiency
While inflationary trends have lessened, concerns remain. This unpredictability requires businesses to ensure maximum efficiency in their finance operations. Accounts Receivable (AR) processes need to encourage on-time customer payments to optimize cash flow and enable businesses to take advantage of opportunities that emerge. At the same time, Accounts Payable (AP) teams need to be able to manage vendor payments with an eye on managing cash positions, maintaining strategic supply relationships, and taking advantage of available payment discounts.
This can be a daunting task without the right tools in place. AR and AP automation solutions are one way to simplify this process. They empower teams to make better decisions by taking friction out of customer payment processes, providing more transparency into the flow of funds, and making it easy to identify which vendor invoices to pay and when, for maximum benefit.
- Talent Acquisition & Retention
Low unemployment rates continue to surprise economic analysts. This fact also makes it difficult for anyone looking to attract and retain accounting and finance professionals. According to recruiting firm Robert Half, AP staff were one of the finance jobs highest in demand in 2022 and this has continued into 2023. The rise in salaries and the shortage of quality AP staff compound the issue, making the fight for talent fiercer than ever.
70% of employers expect their hiring problems to persist throughout 2023. This dilemma, along with budget cuts, forces finance departments to rely less on adding headcount and explore other methods to achieve their goals without burning out existing team members. To do this, many finance teams are turning to AP automation. According to a 2022 MineralTree survey, 61% of teams who have implemented AP automation now process more invoices with the same size team. Embracing AP automation helps teams achieve their output goals faster, despite common setbacks like limited headcount or budget. It also provides a valuable opportunity to upskill existing talent to more strategic work.
- Executing on Finance Modernization
As business look to digitize their operations, finance is typically near the top of the list. The focus is on reimagining manual, paper-based workflows and retraining the workforce to assume higher-value responsibilities in their day-to-day tasks. However, executives are appropriately concerned with ensuring value for their investments in new technologies.
Executed well, digitizing finance processes can unlock incredible efficiencies and benefits for the business. Executed poorly, it can cost the business a lot of time and money. In order to achieve their goals, finance leaders must have a clear understanding of the gaps in their current processes and prioritize those that can deliver the greatest value the fastest. AP is one area to consider. It provides immediate workflow efficiencies while helping teams get control over spend, accelerate cash flow, and improve supplier relationships.
- Accurate Data Analysis
Most every area of the business today can leverage data to improve the way they manage their operations and increase their profitability. Finance is no exception and AP in particular offers valuable insights. Digitizing and automating the AP process gives businesses easy access to a rich dataset about invoicing and payments that can make a big difference in how the business operates.
AP data can show which payment methods cause the most or least problems with suppliers; forecast spending and cash flow more accurately based on historical data; and predict potential fraud based on common characteristics. Finance teams that prioritize data and intelligence can turn AP into an important intelligence hub, making the role more valuable by providing strategic insights into cash flow and operations.
Finishing 2023 Strong
In order to continue to move their businesses forward, finance teams need to take a proactive approach by investing in the right technologies and automation tools to minimize process inefficiencies and free up staff time. These technologies will also provide timely and easily accessible financial data that can provide a clearer view of their financial position and help guide business decision-making. Accounts Payable is a great place to start.
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About the Author
Brian Greehan’s professional experience includes fintechs, card networks, and large financial institutions. As head of B2B Solutions at Global Payments, he is responsible for driving a cohesive growth strategy across the organization’s B2B capabilities, including both MineralTree and TSYS. Prior to joining Global Payments, Brian was the Chief Revenue Officer at DadeSystems (acquired by Versapay). He’s held leadership positions at Bottomline Technologies (Paymode-X), Bank of America Global Transaction Services, and was previously at Mastercard.
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Tags: Accounting, Benefits, Firm Management, Small Business
