by Valérie Colin, VP Finance and Document Automation at Quadient Accounts Payable
If an organisation hasn’t digitally transformed its finance function yet, there’s a high chance it will in 2024 – as technology advances, new legislation, and rapidly evolving markets make the need crystal clear. One of the biggest drivers, particularly in the UK, is the rise of e-invoicing. While EU member states have transformed quickly in line with clear legal obligations, making Europe the fastest adopter of e-invoicing around the world, there is a growing realisation that the UK needs to catch up. UK businesses who want to know, maintain and build trading partnerships with EU countries recognise they need to keep pace, and adoption now will mean enterprises are prepared for the UK itself to follow suit.
That said, UK legislation is already driving digital transformation across finance teams. For instance, the recent updates to the Prompt Payment Code mean it’s now Government policy to do business with organisations that meet its obligations. Guaranteeing businesses can meet the terms of the code – whether to win Government contracts, or protect their reputation – will drive growing numbers of finance departments to digitalise this year.
Whatever the driver, when digitising businesses need to guard against the dangers of getting stuck at first base: they must ensure they are unlocking the true potential digital technologies can bring.
Striking out, or stuck at first base?
The greatest risk in a digital transformation is focusing on digitisation, not transformation. Focusing only on the initial driver for the move may produce short-term results, but it will miss the bigger picture. For instance, adding an e-invoicing capability may help maintain trade with EU partners. But there are far more rewards available by examining the processes in place behind that invoicing, and analysing the new streams of data this produces to drive further operational efficiency.
Crucially, moving from paper to digital won’t automatically solve issues with an organisation’s invoicing – they will simply continue in a new medium. For example, transforming invoicing should be treated as an opportunity to consider the entire process; from how invoices are received, signed off and processed, to how the business guarantees accuracy, efficiency and reduces the risk of fraud. By missing an opportunity to intervene and review tried and tested processes, finance teams’ digital transformation won’t move beyond past first base. They may even make a damaging mistake and ‘strike out’ with no real benefits.
Moving round the bases
Instead, finance departments need to treat digital transformation as an opportunity to make a wider impact, not just meeting the letter of regulations but future-proofing the whole organisation. This means taking the time to plan a more strategic, wide-reaching approach that goes beyond playing it safe and stopping at first base, instead moving round and heading for home.
When doing this, they should consider seeking advice from a trusted partner. An outsider’s perspective is invaluable in times of change – as well as offering expertise that might not exist within the business. An expert in technology and finance will be well-positioned to identify bigger benefits that could be unlocked as part of the project.
Part of either the business’s or trusted partner’s task will be stepping back to take an objective look at the organisation’s technology. As well as making sure it is as streamlined and solid as possible, they should also be looking for ways to capitalise on the capabilities that could be brought by emerging technologies.
This starts with drawing on the power of cloud services to cut the complexity and cost involved in implementing digital change. Beyond this, automation and Machine Learning can be used to not only cut out manual processes such as form filling and passing along invoices for approval, lightening the load on finance teams while also cutting the risk of human error. They can also increase accountability – by identifying non-viable invoices, or those that show the telltale signs of fraud. Businesses can even consider using AI to prioritise which bills to pay first; to ensure late payments are chased and settled as quickly as possible; and to identify which of their partners are the most financially stable.
Hitting a home run
It may seem like a daunting year ahead for finance teams that are going to digitally transform, but they can unlock huge rewards if they approach it in the right way. They need to look beyond the initial driver for the change and question how they could go further and what else could change, from processes to additional technologies. By doing this they will be perfectly positioned to hit a home run straight off the bat, putting the finance team on course to emerge victorious from the digital transformation ball game.
