Why, in an age where information, transactions, and engagement are almost instant, do so many organisations still lag behind when it comes to B2B financial processes?
Can B2B Learn From B2C Practices?
As we know, B2C engagement has long been the primary focus of business, and rightly so, this is what pays the bills. Offering your customers multiple channels to interact with your product or service has become critical, companies that fail in this often end up failing completely. We have seen this happen time again, from Blockbuster Video, to Toys R Us.
For most organisations though, their interactions with other business, normally via the Finance function, are often slow, out of date and out of touch. Why?
A lot of the technology that organisations already leverage, could very easily be replicated into back office functions, from HR to Finance and Banking.
This is especially the case within Finance. Speed, transparency and agility are often the words that are bandied about, in fact they are often key targets for FD’s and CFO’s. In a recent ITESOFT survey* 77% of respondents said that automation was important, or very important, to their organisation.
In the same survey, 44% of respondents stated that they are not yet automated, so why is there such a gap?
Why Is Back Office Still Just A Cost?
Often, organisations consider their back office functions as a pure cost to them. The functions are often paper and people heavy, drawing on a lot of resource, to effectively pay more money out. During the last 10 to 15 years, this has driven decision makers to look at outsourcing the services.
This does a fantastic job of reducing the associated overheads, but doesn’t give any benefit to suppliers. They are still waiting for payments, have little to no visibility of what is happening, and can often struggle to get clear communication. It can have a similarly negative impact on the organisation themselves as they also often find that visibility and trace-ability becomes an issue.
Retaining these processes in house, and making use of the latest technologies can drive enormous business benefit. Benefits from early capture and payment discounts through to improved supplier relations and ultimately governance, guidance and audit-ability.
Digitalisation On Receipt
If you are able to capture and process the information from an incoming invoice almost instantly, and have this information fed into your finance system in real time, you can then offer faster payment to your suppliers.
If this is a digital process then you can even give your suppliers more ways to reduce their costs. They no longer need to worry about sending a physical invoice in, or multiples of! They can interact with your organisation via a portal, checking on the status of a given invoice, or payment cycle.
Over the last few years we have seen an ever growing number of applications and technologies that are being made available to businesses of all sizes.
In 2017, disruptive technologies was the term, making use of omnichannel capture, RPA (Robotic Process Automation), and block-chain making headlines for all sorts of reasons.
As we look into 2018, what will the focus be on? We are already seeing a lot of noise in the market around AI (Artificial Intelligence), AR (Augmented Reality) etc. what remains to be seen, of course, is how much of an impact these will have on back office function. Or will companies still continue to talk big, but fail to deliver?