Finance executives in all organizations are being asked to look closely at their core processes. Two the main drivers for business process improvements are cost reduction and information security. Studies show there is great variation in the efficiency of financial processes. Bottom performers spend 2.13% of revenues on financial processes; top organizations only spend 0.57%. This cost disadvantage drops directly to the bottom line, making it difficult for organizations with paper-laden and inefficient financial processes to compete.
Organizations are beginning to realize that improved effectiveness and efficiency of finance and accounting processes are not only worthy goals within the finance department, but goals that have strategic benefits for the corporation as a whole. Chief financial officers must ask themselves – Are our financial processes world class or second class, and how does this impact our overall business process transformation initiatives?
Every business operates on a pretty thin line between success and failure, and technology disruption is making this line sharper every day. C-level executives struggle constantly with the following kinds of questions:
The drive to go digital is sometimes attributed to a want to remain competitive, and in a way, this is true.
But businesses usually choose to pursue invoice processing software because they’re tired of missing opportunities due to paper-based processes and people-based workflows.
Stress levels are high and there’s not enough time in the day.
Inside accounts receivable, there’s pressure from upper management to increase the collection period to bring more money into the business, while inside accounts payable, questions arise as to whether or not the department is optimizing discounts with suppliers and cutting costs where possible.
Your accounting staff is overburdened by paper.
So, how do you save them, and, in turn, strengthen your business?
Moving to an enterprise content management system (ECM) offers huge benefits for accounting departments, including improved efficiency, cost savings and — when correctly implemented — a great return on investment. But other departments may resist using an ECM system, often because they don’t see how ECM fits into their processes and ways of working.
Legal departments tend to resist ECM either due to compliance and regulations or to misconceptions about the validity of digital documents. People who have worked in legal for a long time often believe that for a contract to be enforceable they need to keep the original document with the wet (ink) signature. While that may be true in some situations, this environment is rapidly evolving, with a growing trend toward the electronic signatures provided by VeriSign and others.
For any organization, especially large ones, it’s always a challenge to maintain the necessary documentation for audits. If you don’t have an effective document management solution in place when you’re being audited, you’ll be scrambling to locate paper documents, electronic files and emails, typically stored in all sorts of different ways.
Mann Mortgage processes loans at three locations, but retains all associated documents at its central office. Each center receives up to 20 files a day consisting of over 300 pages each. Every file must be sent to the home office for filing and processing.
Before adopting digital document processing, stark workflow and cost inefficiencies existed. Specifically:
Accounting departments must contend with a constant influx of documents in both paper and electronic form. New invoices, purchase orders, checks and other documents arrive on a daily or even hourly basis.
Unless your department is highly organized from the start and using enterprise content management (ECM), you’re likely to lose productivity and trigger financial setbacks.