By Nathan Ollier, CEO, Open ECX
The responsibilities of the Chief Finance Officer (CFO) and other senior finance leaders go far beyond carefully managing spend and cash flow. Charged with steering the fiscal health of their organisations also means taking a critical role in wider decision making that affects all areas of the business. There is a ripple effect created by decisions rooted in finance that has the potential to make or break overall business success. Which is why, when we came to commissioning an independent survey of senior finance leaders recently, we were surprised to learn how many were still struggling to get on top of some of the fundamental processes at the heart of the function.
Chief among our findings was the revelation that over one-third (35%) of accounts payable (AP) professionals said they had to manually intervene in the processing of at least 60% of their supplier invoices. The process of paying suppliers accurately and on time is a requirement for maintaining good terms with suppliers to ensure a consistent, reliable supply chain, which in turn is necessary to ensure the flow of goods and/or services that serve an organisation’s customers. It became clear from this and other findings in our survey that many financial leaders are not actualising the benefits of effective, accurate invoice and financial management technology. Implementing modern touchless, vendor-friendly solutions that automate invoice payment processes can help ensure late payments are a thing of the past, and also reduce or even eradicate instances of errors, omissions, and other issues that lead to payment delays.
The potentially disastrous impact on supplier relationships aggravated by late and queried payments cannot be played down. When the government launched its new Fair Payments Code in 2024, research showed late payments were costing small and medium-sized businesses on average £22,000 per year each. This can spell the end for some suppliers, already operating on a knife edge. The government’s evidence shows that poor payment practice led to around 50,000 business closures annually. And while that is tough for those businesses, it is also potentially ruinous for others in the supply chain, particularly at times of shortages, transportation challenges, and for organisations that depend on specific suppliers of unusual or hard-to-source materials for their own business success. When the going gets tough, organisations want to know their suppliers have their back, and protecting supplier viability is crucial for facilitating a reliable supply chain that in turn, delivers output and income stream from customers further down the line.
But back to considering the broader strategic responsibilities of the CFO. The ripple effect of inefficient invoice management can have a detrimental impact on an organisation’s success in attracting and retaining finance talent – the individuals it relies upon to manage basic fiscal fitness. The well-documented skills gap is a real problem for many industries, and is a particular concern for businesses seeking to achieve optimum efficiency within their financial processes. These act as the engine room for many businesses, ensuring effective spend management and consistent cash flow, so that all responsibilities – to employees, suppliers, and customers, can confidently be met.
Yet the finance leaders we spoke to told us that attracting and retaining talent is the number one challenge they are seeking to overcome in the next 12 months, placing this above other pressing issues such as achieving cybersecurity and managing/achieving regulatory compliance. More than one-third (35%) also tell us their accounts payable (AP) team in particular is struggling with reducing its high staff turnover.
This concern is mirrored in the findings of other industry experts too, with the Institute of Chartered Accountants in England & Wales (ICAEW) sharing data last year showing 64% of finance teams struggled to recruit and retain sufficient talent to fulfil their internal control responsibilities, while just 35% said they had enough strategic thinking talent, and 34% had the talent to effectively analyse data.
Without getting on top of these crucial financial processes, how can businesses hope to survive and thrive in the ever-increasingly challenging economic environment? Technology is the key to an effective and sustainable solution. Skilled and experienced accounts professionals are worth their weight in gold and should not be relegated to fielding calls from disgruntled suppliers. That’s hardly a gratifying or rewarding experience for either party, and it certainly won’t mean your talent is going home happy at the end of the day.
When organisations implement the most effective and powerful technology solutions for processes such as AP, it not only leads to faster, error free output and higher productivity for teams, but also creates a more professionally satisfying and fulfilling environment for talent. The smartest accounts professionals want, and should be focusing on higher value, strategic tasks, instead of frequently having to intervene and correct poorly-automated payment processes using out-dated technology.
Transforming this one, fundamental financial process – paying supplier invoices, using effective, accurate, designed for purpose technology can therefore drive massive and multiplying benefits. It ensures the protection of supplier relationships, helps reduce the risks associated with the issues that can occur when those relationships are put under strain, such as supply chain disruption, and it helps organisations attract and retain the best finance talent to steer them towards business success. As a strategic decision, investing in the best technology is the crucial first step towards setting in motion a chain of events that can lead to a far more efficient and successful organisation, meeting the needs of suppliers, exceeding customer expectations, and positioning itself as an employer of choice with a competitive edge in all areas under the watch of the modern, strategic CFO.
Why AP technology is the strategic CFO’s secret weapon
