4 Ways AP Process Transformation Strengthens the Office of the CFO

The Hackett Group defines process transformation as “a comprehensive approach to redesigning and optimising operational processes to improve efficiency, effectiveness and adaptability.” AI-driven automation is one of the engines that powers process transformation. In other words: sensible processes + AI-driven automation = mind-blowing results.

Your AP department is a powerhouse of unrealised potential. Unleashing that potential through process transformation brings both immediate and long-term benefits to your organisation. Read on to learn more!

1 Cost savings

Is there any company on this planet that doesn’t want to save money? Of course not. In fact, 44% of CFOs say increasing the use of tech to reduce costs is a key funding priority.¹ So if spending less on AP is on your wish list, consider process transformation your Santa Claus.

Integrating AI-driven automation into your AP function reduces costs by:

• Enabling faster, more efficient processing through touchless processing and dramatically reduced manual data entry (read how the Boston Red Sox optimised their AP process).
• Decreasing manual errors with automated data entry and 2-way or 3-way matching.
• Reducing loss from fraud attempts thanks to built-in controls and digital audit trails that make it harder for fraudulent invoices and duplicate payments to get through.
• Ensuring payments are made on time, reducing late payment penalties and lowering DPO via due date reminders and invoice prioritisation.

2 Better cashflow & more working capital

Saving money — even making money — in a process where money is leaving your company? Believe it. It’s possible when you view AP not as revenue or a cost centre but as a growth lever you can strategically manage. And strategically managing AP is do-able when you have an AI-driven, automated process.

Process transformation in AP leads to more cashflow and working capital by helping your team:

• Carefully time payments so your company can hold onto its cash longer, which can then be used to generate revenue or for other investments.
• Capture more early payment discounts with help from AI that keeps track of invoices eligible for discounts and alerts your team before the discount window closes.
• Negotiate more favourable terms from suppliers by leveraging your team’s history of on-time or early payments and clear communication with suppliers thanks to AI-driven automation tools.

3 Dependable data for decision-making

The AP department is a treasure trove of information — if only it could be organised, analysed, visualised and put in front of the right people. With a transformed AP process driven by AI and automation, you can thanks to:

• Real-time visibility into AP metrics and performance, enabling better strategic planning, cleaner reporting and more accurate cashflow forecasting.
• Centralised, digitised data and powerful analytics to identify cost-saving opportunities and analyse vendor performance.

4 Increased productivity & scalability

When you let AI and automation take over the mundane, repetitive tasks in your AP process, your human team can focus on more interesting, value-added activities. As a result, morale improves, productivity increases AND you can keep up with growing invoice volumes without needing to add tonnes of headcount.

AP process transformation brings:

• Consistent rule enforcement for approvals and payments, standardising your processes while reducing inconsistencies and exceptions.
• Enhanced collaboration on a central platform that allows different departments to work together more effectively on invoice information.

Want to see even more ways AI makes AP easier? Or curious to see the nuts and bolts of how AI improves specific aspects of the AP process? Check out 9 Actually Helpful Ways to Use AI in AP.

How to start digitally transforming your AP process with Esker

The two biggest pieces of advice we give any CFO interested in process transformation and AI-driven automation are 

1) Map out consistent, efficient processes that work for your business BEFORE you start automating, and 

2) Don’t take a piecemeal approach to automating your AP process.

The first step of any process transformation initiative must be to identify where your current process is failing you and determine how you want to change it. If you jump straight into automating a bad process, you’ll just keep struggling with the same problems you had before you began automating. 

A partner like Esker, with decades of experience helping hundreds of companies around the world transform their financial processes, can help step you through your automation journey.

And regarding our second piece of advice, when your processes are ready for AI-powered automation, a holistic approach is better than a piecemeal one. What does that mean? Automating only one or two specific parts of your AP workflow isn’t nearly as effective as thoughtfully automating your entire process. In fact, automating in dibs and dabs just leads to confusion and delays.

Here again, Esker can help. Our complete AI automation suite for the Office of the CFO:

• Automates all source-to-pay and order-to-cash processes in one, cohesive platform
• Integrates with any existing ERP environment
• Has a simple user interface that’s easy to learn so your team can get up to speed quickly

In other words, our solutions are designed for finance process transformation. To see what that looks like in AP, check out this 3-minute demo. 

^{1. PwC Pulse Survey, June 2024}