The last two years have had a profound effect on businesses in all industries, including power generation. Looking into the future, it’s evident that even more change is on the horizon.
To accommodate these changes, one thing has become clear within the realm of finance: Digital transformation is no longer optional. Instead, it’s a necessary step that organizations need to be agile, lower labor costs, and control the flow of cash.
Simply put, organizations that prioritize digital transformation are able to keep pace with changing markets, competition, and human capital. On the flip side, those that delay such investments will put themselves at a severe disadvantage.
With all this in mind, let’s take a look at three key reasons why forward-thinking CFOs are bringing digital transformation to their finance departments in the guise of accounts payable (AP) automation.
Hedge Against Inflation and Labor Shortages.
Automating AP can help power generation companies offset rising inflation and overcome labor shortages that are popping up in the wake of the Great Resignation. Instead of dealing with invoices by hand, organizations that invest in AP automation can achieve straight-through processing and let technology take care of all the heavy lifting instead of bogging their teams down with the task. With the right solution in place, finance teams can rest comfortably knowing that AP automation technology will eliminate invoice exceptions and the manual processing required with legacy scanning and optical character recognition (OCR) approaches.
This, in turn, means that power generation companies need fewer people to manage AP—which translates into fewer people you’ll have to give raises to in order to keep around. Plus, thanks to the scalable nature of the technology, you also won’t have to worry about hiring more people as you continue to grow.
At the same time, AP automation helps protect you against employee turnover. While a talented AP professional might not remain with your company permanently, a software solution won’t leave.
If your power generation company is new to digital transformation, AP automation is a great place to start. This is a tried-and-true area for automation and one that most of your competitors are likely already doing.
With the business climate so inconsistent and uncertain right now—and a lot of change happening in the power generation industry in particular—it’s important to build your operations on top of a strong foundation and control what you can. In this light, AP automation is one mechanism you can use to manage the unpredictability we’re all dealing with.
Get More Control Over Your Cash Flow
By shortening invoice processing cycle time, AP automation tools also enable you to exert total control over your cash situation. Not only can you pay early when your finances warrant it to take advantage of available discounts, but you can also pay at the last minute to optimize your cash flow.
In today’s unpredictable market, cash is king. Thanks to AP automation, you can control your cash flow to meet your unique requirements—whatever they might be.
Stabilize Your Supply Chain and Keep Your Partners Happy
Unless you’ve been living under a rock, you’ve no doubt heard about the massive supply chain problems that are impacting markets all over the globe. In order to keep your operations humming along as smoothly as you can, it’s imperative to do everything within your power to keep your suppliers happy. Otherwise, in an era of limited goods and resources, you might find out the hard way that suppliers only like to work with power generation companies that treat them well.
AP automation can save the day here too. Modern solutions enable you to create direct digital connections with your suppliers, giving all parties complete visibility into payment statuses, which enhances the supplier experience.
Rather than pestering your AP team to find out when they will get paid and waiting for a response, suppliers can simply log into a portal and self-serve that information. This helps them ensure they’re getting paid on time and in a predictable way while also reducing the human resources your organization needs to invest in accommodating “Where’s my money?” updates.
Put yourself in your suppliers’ shoes: In today’s business environment, would you rather work with an organization that might pay you at some point or one that gives you complete visibility into payment statuses? In this light, AP automation can reduce the chances of suppliers issuing credit holds against you, or, in extreme scenarios, opt to stop doing business with you altogether.
Build a More Resilient Operation with Digital Transformation and AP Automation
It’s no secret that power generation companies have their work cut out for them. In these inflationary times, many are going to be forced to increase prices to keep business humming along. Of course, those increases are unlikely to be met with open arms from the customers that need to absorb them who likely have cash crunch issues of their own.
The good news is that by making smart investments in digital transformation initiatives and, more specifically, AP automation technologies, CFOs can bake more resiliency into their organizations while leveraging real-time financial information to make better decisions. At the same time, they can also use the efficiency gains from technology to offset some of their cost increases. Add it all up, and that’s the ticket to a happier team, happier customers, and a healthier bottom line.
—Shan Haq is vice president of corporate strategy and development with Transcepta, a cloud-based procure-to-pay platform that enables AP and procurement teams to achieve 100% straight-through invoice processing across their supply chains without scanning or OCR imaging.