AP Automation for retailers: a priority in 2020
The holidays are coming to a close - and as a retailer, you may be feeling a sense of relief. After the busy season of frenzied December shopping is over, most companies see a lull before the pace picks back up again in the spring. While a slow-down may seem like a welcome break and chance to kick up your feet, it’s actually the perfect time to address an incredibly important area for your business - your accounts payable department and adopting AP automation for retailers, such as AP automation for Microsoft Dynamics and other industry leaders.
This coming January, the NRF Big Show for retailers will likely break all existing attendance records, with tens of thousands of retail professionals and vendors coming together to learn more about the latest advancements for their industry. No doubt there will be vendors with solutions for everything from POS systems to marketing services, but the key focus for companies, whether attending the show or not, should fall on addressing the crux of their financial process with AP automation for retailers.
Streamline your direct spend with AP automation
Retailers deal with a multitude of invoices from a vast array of suppliers. This crush of invoices, particularly around their busy seasons, can be unmanageable without the right systems in place. Direct spend matching in a manual or semi-automated system is messy; complex invoices with multiple line items make it a time-consuming procedure to match line-by-line or get to the bottom of deviations.
In an industry where success depends on remaining agile and innovative, every hour freed up translates to more creative thinking and progress toward the next great product. AP automation is key to making this a reality. The cutting edge technologies used by leading retailers allows organizations to reach genuinely touchless levels of direct spend processing, by using dynamic line and header level matching from the invoice to the corresponding purchase order or goods receipt. As a result, AP staff gets back much of their time, and purchasers in the business spend less time approving invoices, only getting involved when identifying a deviation.
As a retailer, your relationships with your suppliers are critical to the business. For every product sold, likely multiple suppliers contribute one or more elements to the complete package. If a slow, manual AP process is preventing you from paying these suppliers on time, you could face a situation where one burned bridge turns into an industry-wide reputation; the last thing you want is to have a blacklist situation on your hands. The ease of AP automation for retailers guarantees fast and accurate invoice approvals and makes working with suppliers more streamlined and enjoyable.
Handling non-merchandise invoices
For brick-and-mortar business, multiple locations can translate to maverick spend that catches the AP department off-guard. Indirect spend is an already tricky category to master, and while it usually is essential to the business, your AP department needs a better way to handle it and keep an eye on the spend taking place across locations.
Modern retailers are looking to AP automation to provide a digital workflow and invoice capture, which in turn provides their AP team with the platform to efficiently manage invoices, accelerate lead times and reduce the risk of fraud or erroneous payments. AP automation for retailers makes it easy to automatically route invoices to the appropriate approver without involving the AP staff, eliminating the age-old problem of invoices getting buried on desks and saving the AP team the trouble of hunting down the appropriate person, who likely works in an alternate location.
AP Automation for Dynamics (and other ERPs)
It’s important to note here that not all automation systems are created equally. Static workflows and OCR technology can provide some efficiency boost, but will never match the capabilities of an authentic accounts payable automation system, particularly in the category of non-merch spend. For example, many organizations mistakenly believe that the built-in solutions for their ERP, such as those for Microsoft Dynamics, qualify as AP automation - but struggle to understand why they still have manual steps in their AP process and regularly fail to pay their suppliers on time.
The answer is simple. These built-in solutions were not designed to provide sophisticated technology like that of genuine AP automation for Dynamics. For built-in solutions to offer comparable benefits, it would require massive amounts of IT resources to customize or build from scratch the functionality for matching, routing, coding, capture, and much more that already comes pre-packaged in a best-of-breed solution.
Microsoft Dynamics is the most commonly used ERP among retailers, and there is a significant opportunity for automating accounts payable to great success using one of the stand-alone, best-of-breed cloud solutions in the marketplace. Some of these systems even have pre-packaged connectors to easily link to the Dynamics environment, giving retailers all of the benefits of a modern, best-in-class AP process.
20/20 Vision into important KPIs
Focusing on developing front-end systems that impact and measure the customer experience is important - but so is improving business-critical systems. Without insight into the financial processes that create the working engine of the business (such as AP automation), it can be nearly impossible for retailers to make any improvement, let alone understand which areas need to improve in the first place.
Your business needs to be able to identify and track complex factors impacting the invoice workflow, in order to increase the efficiency of the accounts payable department. A genuinely robust AP automation system for retailers offers the technology capable of providing insight into KPIs over time and varying across suppliers, employees, and business departments. Retail Info Systems predicted that the second most significant trend to watch for in 2019 was data analytics systems, which proved that it’s no longer an IT-only venture that’s key to becoming a data-driven business. Retailers should expect to see that trend continue into 2020.
What’s equally as important to the data itself is a backdrop to compare against, accurate data-based benchmarks. Not based on surveys or broad data with no correlation to your industry, but real-time statistics consolidated from a pool of organizations using the same system and standardized process. That way, you know exactly what is achievable and where you fall among the below average, standard or the industry leaders.
The future of AP automation is bright
While many retailers are only beginning to venture into the world of automation, the automation industry has been booming with innovations every year for the past decade. The term Artificial Intelligence (AI) may conjure up a far distant futuristic scene. The truth is that the leading automation solution providers are already utilizing AI functionality at the core of their products.
For accounts payable automation, perhaps the biggest attraction and opportunity for AI is its ability to provide more automated intelligence of everyday functions in the AP process. By combining powerful invoice automation to eliminate manual processing and machine learning techniques to “understand” and replicate what the AP team is doing as part of their normal routine, AP automation systems will be able to deliver even better insight into the status of the most crucial financial operations.
The retail industry leaders who set the pace for the rest of 2019 are constantly exploring new technologies and products that help them compete and deliver better products and services to the consumer. More and more retailers understand that improvements in the heart of the business will ultimately translate to better customer-facing operation. Making the investment in true AP automation for retailers will better prepare companies for the challenges of the new year - and years to come.
