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Frictionless accounts payable – happy customer, happy employee

March 18, 2021

Here’s a philosophical question for you – well, sort of. Is business all about money?

Let’s take the accounts payable (AP) function. Data discrepancies or errors can be costly – but they are also bad in other ways. For instance, they can be damaging to supplier relationships, and to brand image. They can take up time, too, because those errors are going to need rectifying.

So, it’s not just about money, then. Except, well, maybe it is. Because damage to supplier relationships and to brand image can affect demand, as well as supply – and damage to either can affect sales. Which means money. And fixing those errors isn’t free, either, because as we all know, time is money, too. So, yes. At least as far as AP is concerned, maybe it really is all about money.

Sources of AP friction…

If businesses want to save that money, they’ll need to know where to look for potential problems, so they can stop them happening. Here are some possible areas of friction:

  • Supplier onboarding – manual updating of master data is a request-driven process that can involve many people, many steps, and often unsatisfactory results, leading to a high lead time – and to unhappy suppliers
  • Invoice processing – manual, paper-based invoicing systems or manual-driven exception processes can lead to late payments, errors, internal process issues, disputes, and strained relationships with suppliers, in addition to added costs from multiple areas. In a word, friction
  • Payment – erroneous payments and duplicate payments are cripplers to the invoice-to-pay process. Inconsistencies in manually entered supplier information, invoice amounts, or coding, can cause a single invoice to be paid twice. Companies may also accidentally make double payments if they use multiple financial applications, instead of a single integrated system.

… and the Frictionless Enterprise

In short, what’s needed in AP is an approach that we at Capgemini unsurprisingly call the Frictionless Enterprise.

The Frictionless Enterprise enables a smooth and seamless flow of information and collaboration between employees, their departments, and those with whom they work. It also encompasses their relationship with customers, with partners, and in the case of AP, obviously with suppliers, too.

Achieving the Frictionless Enterprise doesn’t mean the arbitrary application of technology, rules, or processes. It entails whole new, digital ways of thinking and working, combined with the capacity to adapt constantly to new contexts.

Frictionless AP benefits

There are several benefits when the AP function is part of a smart, seamless operation.

For example, supplier onboarding becomes a smooth process, with AI-enabled zero touch validations. Businesses can also set up supplier portals with self-service voicebot and chatbot options, thereby removing the hassle from invoice submission, making it possible to automate the exchange of certain kinds of data, and enabling suppliers to get a sneak-peek of the status of their invoices.

Invoice processing can become paperless, and frictionless, with a seamless integration of workflow from procurement through to accounts payable. Machine learning (ML) pattern matching systems can automate approvals, and process controls can be automated, too.

Fraud detection can be improved. This is another area in which ML pattern matching can help. Companies can also set up autonomous data set scans to identify patterns, and detection of discrete error types that bypass traditional controls and audits can be automated.

The payment process is also improved, with automated alerts for early or dynamic discounting; automated pay schedules that are integrated into the ERP system; automated remittance advice; and protection of working capital by automating the identification of overpayments and fraud before the pay run.

Finally, artificial intelligence (AI) can be brought to key AP processes. Service desk functions can be automated, using natural language processing (NLP), ML, and other smart technologies to resolve supplier queries automatically. Also, AI can be incorporated into an AP Control Tower that can, among other things, measure performance efficiency benchmarks, provide prescriptive analytics and strategic analysis, and enable real-time insights on payables data, including retrospective reporting, spend analytics, and data modeling.

The pursuit of happiness

So, then – to return to the question with which I started. Is business all about money?

Well, it’s true that in accounts payable, everything could indeed be interpreted that way, and it’s equally true that a Frictionless Enterprise approach to finance can help to lower costs, protect sales, and so, ultimately, maintain and even boost margins.

But in fact, and in spite of what I said at the outset, it’s not just about money. Sure, you could measure supplier and customer goodwill in purely financial terms – but this goodwill also has emotional value. It’s good for a business to know it’s doing things right, and it’s good to know that it’s treating people well. It’s good, too, to know that by streamlining processes and removing hassle, it’s also making life better for employees.

Business is about more than money. And the Frictionless Enterprise is about more than efficient processes. It’s about making, and keeping, people happy.

To learn more about how Capgemini’s Frictionless Finance can help you start your frictionless journey towards enhanced accounts payable processes and improved customer satisfaction, contact:

Mahalakshmi Ramakrishnan leads multi-national multi-cultural teams and transformation projects across the accounts payable.