That role will only continue to grow as the remote-working trend becomes a long-term solution for many companies. Shifting to a hybrid work environment presents ongoing challenges – nevertheless challenges that must be addressed while businesses continue to look for ways to restore growth. That’s why technology will be essential to help companies work smarter in the year ahead, whether it’s to manage a dispersed workforce, onboard new clients or speed up processes.
There is good news as 2020 draws to close: According to our recent survey of 500 executives, most companies appear poised to rebound in 2021. Nearly 70 percent of respondents shared that their businesses are well-positioned for growth, despite some key hurdles.
Among those key hurdles is the need to integrate new technology solutions into geographically distributed workforces. This is where digital transformation comes in.
The promise of going digital
Digital transformation – when companies invest in new technologies like automation or machine learning – is one of many trends that have been accelerated by the pandemic. Forty-four percent of those in our survey have pursued digital transformation to improve their efficiency, cash flow visibility and security.
Contactless payments and banking, real-time payments and accounts payable / account receivable automation represent the most important and promising areas of fintech innovation next year, which will have a direct impact on digital transformation for finance and accounting teams in 2021.
This fintech innovation is with good reason: Since the pandemic began, more than half of executives report delays in processing the invoices they received from vendors, which poses significant ramifications for companies regardless of their industry.
Implications for finance professionals
Several factors can cause the processing of vendor payments to stall. The number one reason cited for invoice processing delays in our survey was difficulty securing approvals while working remotely (32 percent), followed by companies’ need to rely on courier services such as the U.S. Postal Service, UPS and FedEx (29 percent). Unexpected cash flow challenges and a lack of visibility into the invoice or payment status can also complicate invoice processing efforts.
However, the delays don’t end there. Thirty-one percent said that less than half of their customers pay them on time. Perhaps part of that can be explained by the fact that many companies represented in the survey do not use fully digital payment processes, and nearly 39 percent still have someone handling their physical mail in the office every day.
While this reality provides many opportunities for improvement and optimization, there are also consequences. Invoice processing delays can result in late payments and increased costs, which may negatively affect the bottom line. And companies need the ability to quickly understand the status of their invoices to provide the best services to their customers.
Digitizing for growth
The most heavily impacted companies during the pandemic are those whose operations were significantly disrupted because they rely on manual processes that require employees to be in the office. Some of that is inevitable depending on the nature of the business. But much of it can be done more efficiently, and virtually, with technology.
Companies seem to recognize the stakes and the opportunities. Forty-six percent of executives in our survey predict that more than half of their accounts payable and payment processes will go digital next year. Most leaders also said that the majority of their overall operations would be fully digital in 2021.
By efficiently automating manual processes, employees – a company’s most important asset – can focus more of their time and attention on higher value work that really drives business growth. That allows businesses to better serve another crucial asset for growth: their customers.
Denise Leleux is senior vice president of supplier network of AvidXchange.