With businesses of all kinds being squeezed by rising wages and decreased consumer spending, they need to cut costs without cutting essential functions. PYMNTS explains why AP and AR automation can give companies the visibility and control they need for managing cash flow in tough times.
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There are plenty of opportunities to use artificial intelligence (AI) in automating the work that CFOs oversee, but a lot of that has not happened yet. The biggest role of automation in company finances is helping to make data more visible to the people who need to see it, Katz said. While there are also applications such as forecasting, in which AI can help to make better sense of the information that is available, where the technology has its greatest potential is in making otherwise opaque data points visible to decision-makers.
The more data a company has and the better it is sharing it, the greater a concern security becomes. In the midst of making data more transparent, businesses need to be just as mindful of not oversharing to the wrong people. As companies’ data sets become more useful due to automation and integration, those businesses are not the only ones for whom that information could be useful. The software used and how it is implemented can have a significant impact on how secure a company’s data is.
A great product is still only as good as its implementation. Katz said that how well automation software works still depends a lot on the organization deploying it. Simply implementing a system without diligent and deliberate testing can even make the situation worse for working capital transparency. On the other hand, if teams are connected and everyone understands the software, automation can be a significant boon for productivity. Just as with any system, it comes down to ensuring that data is shared rather than siloed and that the people on the ground are invested in and understand the tools they are using.
Better connectivity and integration, such as through out-of-the-box application programming interfaces (APIs), would help with successful automation implementation. Friction is an issue whether dealing with business-to-consumer (B2C), business-to-business (B2B) or even internal data sharing. However, the strides that have been made in reducing friction for B2C transactions have not been seen in other aspects of business digitization. Katz said that B2B companies in particular have a lot of ground to make up in this regard. If companies want to be able to move at speed in the digital age, they will need to focus on reducing or eliminating friction points in their digital implementations at every level.
Legacy systems can create bottlenecks, and even new systems can force information into silos, but the right architecture can help. Katz said he has seen narrow uses of data and lack of information transparency create problems across businesses. One solution is an enterprise data warehouse built on uniform architecture and using a common vernacular throughout the organization. With the ability to access data across a company’s internal systems both intelligently and quickly, businesses can unlock a previously unrealized set of possibilities for leveraging data.
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