In 2008, an economic meltdown occurred all around the world. It has been almost a decade since the onset of this recession and the first attempts to kick start recovery. While the financial markets have now bounced back and enterprises are catering to rising demand, its lessons are clear.
To stay financially adept is imperative. Financial departments can pore over balance sheets, operating costs, and quarterly profits, but if they don’t have the necessary visibility and control, their efforts will be largely ineffectual. As long as there is uncertainty surrounding any part of the transaction or invoicing channels, there is a lack of control.
If there’s no control, there’s no way to ensure that supplier payments and other transactions are completed efficiently. This is why the most successful companies in the world are the ones with sophisticated AP automation tools and a high level of Purchase to Pay (P2P) development.
Rescuing Capital from Paper Based Systems
The reality is that unpredictable markets encourage organizations to anxiously hoard capital that they could otherwise be investing on growth and development. This is a natural response to unstable and seemingly unsafe conditions. The problem, however, is that most businesses are hedging far too often and with far too much.
Without transparent, efficient EIPP and dynamic discounting resources, they have no real way to assess how much free capital is floating around. This causes uncertainty and leads to unhealthy, unnecessary actions like borrowing to make up for shortfalls that haven’t happened yet or lowering expenditures.
With the support of responsive accounts payable automation solutions, AP departments become entirely visible. They can be tracked and monitored in real time. Sophisticated AP automation reveals the intricacies of the P2P rotation and makes it clear where, when, and how money is moving through the business.
Making Positive Changes for the Future
According to a recent study published by the Hackett Group, a mere 22% of businesses are able to predict midterm cash flows within a 5% accuracy margin. However, for most organizations, it represents a valuable opportunity. If you can be part of this small percentage, you’ll get the chance to dominate market rivals. With transparent, efficient cash flows and dynamic discounting, it is possible to streamline your whole operation. If you complete transactions faster, you’ll have the time and resources needed to secure more. If you reduce errors and keep vendors and suppliers in the loop, you’ll strengthen your ties and boost your reputation.
The first place to start is with your existing P2P channels. Kickstart positive change by automating your Accounts Payable systems and increasing efficiency overall. Then, reach out to your main trading affiliates via the use of a robust commerce network, including a vendor portal. This is a great way to strengthen your relationships and make room for the application of sophisticated payment methods.
In the long run AP automation is the future of commerce, it will make sure that your future is guaranteed by embracing financial transparency and transforming your ROI into a proficient resource.