Corporate interest in implementing automated solutions will not only streamline and optimize payment operations, but will also create new issues of risk of which management and staff remain unaware.
Organizations are continually striving to address inefficiencies in financial supply chain processes. These firms are exploring innovative ways to leverage automation not only to contain costs from a tactical perspective, but also strategically to enhance control, improve visibility and manage spend. This effort will reduce the process cycle time and thereby reduce working capital requirements. Accounts Payable Automation is emerging as one of the key components of this financial supply chain strategy.
The payables landscape is being changed by emerging financial solutions that enable trading partners – buyers, suppliers, and banks – to seamlessly exchange transaction-related information as well as money. These changes have increased the inherent risk.
Financial Supply Chain Automation is gaining broad acceptance within accounts payable and accounts receivable managers. Web-based tools, best-of-breed systems, integrated supplier portals, and automated workflow applications are finally beginning to deliver on promises of process improvement and associated cost reduction. The by-product is a much improved process which offers real-time collaboration between buyers, suppliers, and banks. Managers need to be aware of the areas of risk that have emerged and may be undetected during this transition.
Since 2008/2009, the emphasis on cost containment and productivity enhancement has forced organizations to seek new ways to automate traditionally paper-based, labor-intensive AP processes. The realization that current payments processes are a roadblock to achieving these goals has been intensified by the need for improvements in data integrity and greater visibility as a result of Sarbanes-Oxley (SOX) and other corporate legislation.
The recession and need for further cost containment has led to targeting payments automation. The jury is still out on the potential for generating bottom-line improvements, but it may see a greater impact on monitoring and managing cash flow.
Ray Graber has a deep and thorough understanding of banking, technology, and finance. His experience includes banking technology research at TowerGroup; best practices internet policies at FleetBoston, wire transfer operations and product launches at Citibank and BankBoston; and treasury operations for a $325 million public company.
Mr. Graber was an adjunct professor at the Carroll Graduate School of Management at Boston College where he taught E-Banking, the MBA Leadership Course, Corporate Finance, and the Financial Management of Commercial Banks. He also taught Working Capital and Cash Management at the Bentley College Graduate Business Program.
Ray holds a Bachelor of Arts degree in Mathematics and an MBA in Finance and Computer Science from Boston College.View all trainings by this speaker