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Identifying Opportunities for Operational Improvement – Keystone Habits for Financial Controllers
Financial controllers are looking at a host of ways they can drive operational efficiency within their accounting teams.
This article is part 3 of a 4-part series focused on “Keystone Habits for Financial Controllers.”
While the responsibility to invest in new and disruptive technology ultimately falls on the shoulders of the CFO, financial controllers can make their boss look great by presenting them with opportunities that drive operational improvement.
Many of the everyday processes followed by accounting teams today are outdated and manual, representing low-hanging fruit for financial controllers to improve and drive operational efficiency. By driving operational efficiencies through improvement within these processes, accounting teams can make broad impacts across the entire organization. Here are a few starting points for financial controllers looking to make improvements that benefit their entire company.
Look for opportunities to increase the level of service provided by vendors
Accounts payable serves as the key liaison between a company and its vendors. A company that has built relationships of trust with all of its vendors benefits from high-quality service, greater discounts, and more flexibility in payments that enable working capital optimization.
Paying invoices on time is the most surefire way to solidify a relationship of trust with your vendors, and glean all of the benefits that come with that. Understandably, it can be a huge challenge for growing businesses with a growing list of vendors to ensure that every invoice deadline is met. However, by failing to pay your vendors on their terms, you are passing up a lot of opportunity to gain working capital benefits, and in some cases, early-pay discounts that will boost your bottom line.
For that reason, thinking strategically about how you process and pay invoices can help you establish, build, and maintain strong relationships with vendors that can move your business forward.
Look for opportunities to improve command over short-term cash flow
The process of capturing, coding, approving, and paying invoices requires a lot of time. In some cases, it can take over 12 days to get an invoice paid. Juggling hundreds of invoices every month can easily keep accounting teams on their heels. However, by shaving off the amount of time required to pay invoices, these teams can establish a more proactive approach with the capacity to consider every deadline as an opportunity to maximize the amount of cash their company has on hand for operations and capital expenditures.
Greater control of vendor payments ultimately allows teams to maximize the use of its trade credit by using every dollar in its cash flow as much as possible. Thus, the company is effectively able to borrow money from its vendors – for free.
Look for opportunities to simplify the company-wide audit process
Audits are a necessary part of every accounting team’s fiscal calendar. As you are well aware, audits can go in a variety of different ways. It is often the case that audits lead to employees getting pulled away from their core competencies to hunt down misplaced documents, setting a business’s day-to-day operations back.
The ease of the audit experience has a lot to do with how the accounts payable team records and maintains their vendor invoice data over the course of a year. The easier it is to quickly locate required documentation, the less disrupted your company’s employees will be from focusing on their core responsibilities during an audit.
Capitalize by Automating
Financial controllers can capitalize on all of these opportunities by automating the end-to-end accounts payable process.
By automating accounts payable, companies can drastically reduce the time required to pay invoices, and free up their team to take a more proactive approach that considers the optimal timing and payment methods for every vendor. Additionally, accounts payable automation solutions store complete audit trails for quick reference in the future.
A key to maximizing your ROI in automation is choosing a solution that automates the entire accounts payable process, and not just an individual component within that process.
Curious to see what your accounts payable process can look like with automation? Contact MineralTree for a personalized demo.
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