How AP Automation Can Help Finance Teams Sleigh The Festive Season
The festive season is a time of joy and celebration, but it often comes with challenges for accounts teams managing bustling businesses' finances. A team that experiences heightened pressure during this time is the AP department. Coping with an increased payables workload, usually comprised of manual and time-consuming tasks, can be daunting.
Let's explore the added challenges that finance teams face during the festive period and how they can navigate them effectively with AP automation.
1. Increased Transaction Volumes
As the holiday season ushers in a flurry of shopping, dining out and other business activities, finance teams may find themselves grappling with a surge in transaction volumes, especially if they are operating in the retail or hospitality sector. Higher invoice volumes means processing demands extra human resources and attention to maintain accuracy and efficiency. This can leave finance teams feeling overwhelmed and struggling to cope as email inboxes explode with invoices, paper piles up, and hours spent flicking between spreadsheets take their toll.
However, digital invoices processed via automated approval workflows keep accounts payable processes running smoothly, no matter how many invoices there are. Finance teams no longer need to worry about keeping track of invoices as they are sent and stored in a cloud location, making it easy for the right people to approve or dispute them. With next to no manual intervention required, AP staff are liberated from manually entering invoice data into the ERP system when they're snowed under with work.
This is all thanks to automation software such as Lightyear, which uses AI-powered data extraction technology and various other features to help speed up and simplify processes.
2. Tight Deadlines
Year-end financial reporting and closing activities coincide with the festive season, imposing tight deadlines on finance teams. AP and bookkeeping professionals, in particular, must work diligently to process invoices in order to close their books on time. Manual processes only hinder efforts, adding to the headache of month end.
However, when accounts payable processes are automated, hitting deadlines is easy since manual tasks such as statement reconciliations, coding and matching are completed automatically. Financial data is live with 100% accurate and instant line item extraction. Having an AP automation software that offers a robust reporting function enables finance teams to pull granular, trustworthy, and up-to-date reports and helps them close the books much quicker.
For a complete guide on how to automate your accounts payable function, download a copy of our free ebook.
3. Extended Payment Terms
During the festive season, suppliers may alter their payment terms. Some might offer discounts for early payments, while others could extend their terms. Navigating these varied terms becomes crucial for finance teams to optimise cash flow effectively. However, when invoice volumes are high, and accounts payable teams are under pressure, taking advantage of these benefits can be a stretch.
With automation, approval workflows are streamlined and invoice processing status is transparent, thereby reducing processing times and enabling cost-savings. Suppliers may also be under extra pressure during Christmas, leading to increased invoice errors and communication challenges. Lightyear empowers finance teams to communicate with their suppliers in just one click, allowing them to solve issues and maintain positive vendor relationships.
4. Staffing Challenges
Holiday festivities often translate to employee holidays. A reduced workforce can strain the capacity of the accounts payable team, making it challenging to handle the increased workload efficiently. Whilst adequate staffing plans and clear communication are essential during this period, accounts payable automation helps your finance team do more with less. Technology can lighten the load on individuals by handling time-consuming tasks and reducing stress. In addition, by having all documents stored in an easily accessible location, no records are siloed to a staff member who may have gone on leave for the holidays!
5. Fraud Risks
The holiday season is, unfortunately, a prime time for fraudulent activities. Accounts payable teams must be vigilant against scams, phishing attempts, or dummy invoices that could compromise financial security and cause your business to lose money.
It's tough to remain vigilant against fraud when your team is under increased pressure and processes are manual. AP automation can help check for errors, discrepancies and irregularities throughout the AP process, serving as a business protection method. For example, in Lightyear, supplier bank details are stored on file and automatically checked against an invoice. If it's a dummy invoice and bank details do not match, Lightyear will flag it so you can investigate before paying.
Conclusion
Planning for adequate staffing, communicating proactively with vendors, and staying vigilant against potential risks are all integral parts of a comprehensive strategy to ensure smooth financial operations during the festive season. The key lies in being proactive and leveraging technology to alleviate some of the burdens associated with the increased demands on accounts payable processes. By doing so, finance teams can not only meet the challenges of the festive season head-on but also position themselves for a strong start in the upcoming year.
Consult our team of experts
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