How Intelligent Data Capture Helps To Preserve Your Cashflow

As the economic downturn has negatively impacted revenues and profitability, cash management has taken on greater importance. The problem is most organizations cannot access the invoice data they need to get a true picture of their cash position. Read how accounts payable automation can help. 

The economic environment has been challenging for businesses this year. But for many businesses, the biggest economic challenge lies ahead: how to return to growth. Putting the business in a position for growth when the recovery arrives will require businesses to muster as must cash as possible. Poor cash management is one of the biggest reasons that businesses fail. But in the post-pandemic recovery, cash will be critical to:

• Replenishing inventories and restocking raw materials
• Navigating economic volatility
• Reinvesting in staff and infrastructure
• Ramping up product development
• Reducing crippling bank borrowing

With revenues hard to come by, many businesses will have to find ways to better manage their cash. Maneuvering in turbulent times requires businesses to know where their cashflow stands.  Getting a handle on cashflow will not be easy for many businesses. 

The reason that many businesses cannot manage their cash tightly is that they cannot access the information they need to make informed financial decisions. In these businesses:

• Data is inaccurate or incomplete
• Information is not timely
• Data is poorly organized
• Systems are not integrated

About one-third of finance departments do not have analytical tools, the Association for Financial Professionals (AFP) finds. Fewer departments have a reporting infrastructure. Some businesses mistakenly believe that the information in their enterprise resource planning (ERP) application is all they need to manage their working capital. Many organizations rely on spreadsheets for reporting. Some do not reconcile data between their line-of-business applications and ERP frequently enough.   

The larger the business, the harder it is to get visibility into cashflows. 

There are lots of businesses with international divisions, acquisitions, subsidiaries, brands, or entities. Many of these businesses have disparate financial processes that they must manage. In some businesses, it requires hundreds of spreadsheets to reconcile financial transactions at the entity level, and then again at the headquarters level. And many businesses do not have complete integration from each entity to the headquarters to roll up values for financial reporting and close the books. All this leaves decision-makers in the dark. 

But it also creates processes that are very time-intensive, increase audit risk.

Cashflow management starts with invoice capture

Effective financial analysis and planning begins with having the tools in place for compiling financial data. That is where accounts payment automation comes in.   

The technology scans supplier invoices and extracts all the information on the documents. The extracted data is then validated against master and line-item data in the buyer’s enterprise resource planning (ERP) application to ensure accuracy and completeness. Approved invoices are released, and the invoice images and related data are transferred to the ERP. Images of the invoices and any other payables documents are securely archived and instantly accessible by authorized users. 

Intelligent data capture puts smart cash controls at the fingertips of decision-makers.

Financial decision-makers can immediately get a full picture of their cashflow. No more sorting through all their transactions or a jumble of spreadsheets to know their financial status.  

• Real-time data around accruals informs and accelerates decision-making. 
• Invoice data makes it easy to spot parts of the business that are struggling with cashflow and those parts of the business to watch. 
• The information from an intelligent data capture solution can feed dashboards. 
• Finance leaders can leverage accounts payable data to quickly model financial plans that reflect changing scenarios. 
• Up-to-date visibility into outstanding liabilities helps senior management stay on top of costs.
• Purchase order matching helps businesses curb spending. 

Once invoice data has been captured, decision makers can act quickly and confidently to:

• Manage liquidity based on current and historical data
• Understand cash obligations
• Model cashflow needs 

With intelligent data capture, decision-makers always know the pulse of the business. To think, this information used to be trapped on paper invoices and stuck in siloes.

Manual, outdated invoice processes could never match this level of data and analysis.

Want to learn more about leveraging accounts payable to improve cashflow visibility?

Contact me anytime to arrange a time for a call.