Companies now operate in an environment that requires them to be adaptable to changes and make the best use of opportunities. For example, being agile enough to be able to manage changes to supply availability, pricing, invoicing and payments, to name a few.
Agility is about being able to change direction with ease and adapt through continuous evolution, and agile spend management can be the driver of this adaptability. Forward-thinking, collaborative, data-driven and action-oriented organizations know this.
The glue to an agile operating model is technology. It enables efficiencies, engagement and control. An agile approach not only helps to manage change and solve problems, it also helps to maintain strong and positive buyer-supplier relationships. In the context of Accounts Payable, for example, agility is about being able to efficiently and effectively engage with suppliers of all sizes, capture all invoice types (from paper to PO Flip), move between remote and on-site working and to help optimize cashflow – all while balancing your suppliers’ needs with the needs of your organization.
Gary Simon, BSc, FCA, FBCS, CITP, Chief Executive of FSN & Leader of the Modern Finance Forum on LinkedIn, has recently stated that “less automated and agile AP functions put a strain on their operations due to the manual processing required to get invoices into ERP systems ready for approval – which is why it is so important to have an agile AP model
which can efficiently handle 100% of invoice formats.”
We have identified some further examples of how agile spend management can truly deliver results:
Obtaining best value is critical, not only to success, but in some cases to survival. An agile approach to spend management helps achieve this is by improving the effectiveness and transparency of both strategic and tactical sourcing processes, while reducing administrative time and effort. There are strategic tools available that provide flexible, collaborative, and efficient methods for conduct effective sourcing events
of all types.
Such tools also enable employees to find and buy what they need. Specific goods and services that are available from authorized suppliers can be easily accessed, and this capability is essential to achieving higher spend under management. Employees are far more likely to buy the right item from the right supplier when it’s easier to do so. Providing employees with the ability to search for, select and then order the item or service that best fits their needs and without long drawn out internal processes streamlines the purchase process for the employee and dramatically drives higher on-contract spend.
An agile system will enable you to work together with suppliers on how to reduce costs and understand cost structures. Look at options with suppliers, such as different ways of payment and different ways of managing inventory – don’t just keep doing the same thing, just because that's the way you've always done it.
Having the flexibility to proactively monitor which suppliers are at risk is also vital. There are tools available
to provide early warning of suppliers who might be in trouble. Contingency plans are essential, but you also need the tools to be able to support and manage these plans.
When automation across the whole Accounts Payable process comes into play, high levels of agility are unlocked. Invoices no longer end up stuck in offices if the team needs to switch to remote working. There is no need to trawl shared inboxes to locate related documents for approving invoice payments. Unstructured data is speedily converted into structured data. Clean, accurate invoice data is seamlessly integrated and “Matching/Approval” ready, with quick access to supporting approval documentation, e.g. timesheets.
Companies that successfully adopt agile spend management are better able to manage changing conditions and priorities. “The most relevant benefit in the midst of the Covid-19 situation is that we can access everything, in the same place, from anywhere,” stated Ian McKee, Assistant Director of Finance at the University of Sussex
. “The Proactis solutions have been hugely helpful during the situation. We moved off site very quickly but we were able to do this with confidence that none of our processes would suffer as a result. Supplier and contract management, eProcurement and all invoicing processes are digital.”
Agility supports resilience, it’s dynamic and is vital for managing change. It therefore makes sense that, as spend management is such a pivotal strategy within an organization, it should be agile. There has never been a better time to automate – or further optimize – your Source-to-Pay processes and ensure that business can continue under any circumstances