Like most other verticals, the retail industry has experienced a slew of challenges since the beginning of the COVID-19 pandemic. Unfortunately industry issues show no sign of stopping as today’s growing inflation, supply chain issues, and staff shortages add more fuel to the fire.
These hurdles have prompted retail organizations to pay close attention to the financial health of their businesses. Many finance teams now find themselves tasked with a tall order: identifying new ways to cut costs, protect margins, and improve business efficiencies without damaging the customer experience. This is no easy feat, especially for the 74% of retailers expecting staff shortages in customer facing positions.
AP Automation: A Necessary Stop for Retailers on the Road to Recovery
So what tools are today’s retailers using to stay afloat? In a recent webinar, the MineralTree team shared how savvy retailers are using AP automation to cut costs, improve efficiencies, and boost profitability–all while maintaining strong relationships with their vendors and suppliers. Today’s blog summarizes key points from the presentation including:
- Retail Industry Trends for 2022
- The Benefits of AP Automation for Retailers
- How to Choose an AP Automation System
- An AP Automation Case Study from a national beauty brand sold in retailers across the country
2022 Industry Trends for Retail
Amidst depressed in-store sales and a mass exodus of front-line workers – not to mention supply chain and sourcing constraints – retailers have demonstrated a keen resiliency by shifting their business models to accommodate new consumer behaviors, expectations, and purchasing powers. Research shows their efforts haven’t been made in vain. Retail as a whole bounced back in 2021, with higher consumer spending, more hiring, and more store openings compared with 2020.
Initially the National Retail Federation projected retail growth would remain strong at 6-8% in 2022. Although forecasters recently began tempering their outlook due to emerging COVID-19 variants, experts are still cautiously optimistic about the sector’s potential for growth, with the caveat that many retail and e-commerce brands must further automate and integrate technology into their operations to strengthen their business.
Retailers seem to agree. According to Deloitte’s 2022 Retail Industry Outlook, 82% of surveyed retail leaders acknowledged automation wherever possible as a priority. So with the majority of retailers focused on automation, what are their top digitization priorities in 2022?
AP Automation’s Time to Shine
Serving as a valuable tool for modern finance teams, AP automation is on the rise as more companies digitize their back office. 81% of companies who use it report simplified auditing procedures of their balance sheets and 71% fewer errors than peers relying on paper-based methods.
AP Automation boasts a laundry list of other benefits: streamlined processing with increased accuracy; real-time monitoring; reliable record keeping; more visibility and transparency; stronger vendor relationships; and the ability to capture more early-pay discounts. But what does that look like for retailers? Read through the following client success story to see for yourself.
AP Automation in Action: House of Cheatham Case Study
One of the oldest beauty care lines in America, House of Cheatham’s skin and hair care products are sold by retailers across the country. As a national brand with only one AP staff member, House of Cheatham’s manual AP processes were no longer sustainable with their growing volume of invoices and checks. Their previous system lacked any sort of real-time visibility and failed to provide the team with control over invoice approvals and payment status.
With MineralTree’s solution, House of Cheatham is now taking advantage of automated approval workflows with routing logic to efficiently route and approve their invoices. As a result, their AP staff member estimates that MineralTree saves him 20 hours weekly as payment runs that used to take six hours now happen in five minutes.
Beyond these efficiency improvements, House of Cheatham has gained key visibility by eliminating paper and using real-time analytics. The organization also boasts better cash flow management thanks to their ability to schedule invoices right before payment deadlines to maximize working capital or to take advantage of early-pay discounts to lower their costs. Best of all, by using MineralTree’s virtual card option, House of Cheatham recently hit a milestone where their payment rebates have fully funded the cost of implementing MineralTree.
Learn More about AP Automation for Retailers
Wondering what capabilities to look for in an AP automation system for retailers? Access the full webinar recording to find the answer, along with other insights like:
- Detailed Consumer Trends in Retail for 2022
- How AP Automation fits with Procurement
- What You Need for an AP Platform to Suit Buyers and Suppliers Alike
- The Benefits of Payment Optimization and ePayments