In 2023, justifying an investment in process automation revolves around the potential to enhance productivity without requiring additional resources. As CFOs seek to reduce operational costs this year, workflow automation software presents an attractive option for generating return on investment and improving efficiency in the back-office.
- CFOs' top stressors for 2023 are inflation, labor, and monetary policies.
- Software solutions for back-office automation will be instrumental to CFOs looking to keep costs low and productivity high.
Conversations surrounding economic uncertainty, labor market volatility, and recession are top of mind for everyone this year, but no one is feeling this pressure more than finance executives.
This is evident when looking at the 2023 CFO survey published by the Federal Reserve Bank of Richmond. The study found that 31% of respondents project a negative GDP over the next four quarters, and an average revenue growth of just five percent (compared to a nine percent forecast for 2022).
Amid so much uncertainty, chief financial officers are seeking ways to establish stability and mitigate risk to keep their businesses on track and on budget.
To this end, CFOs in 2023 are most focused on addressing the following concerns:
- #1–Cost pressure and inflation
- #2–Availability and quality of labor
- #3–Tightening monetary policies
This article will examine the effects of these stressors and the importance of business process automation (BPA) in achieving digital resilience, optimizing productivity, and minimizing costs.
#1 – Cost pressure and inflation
As inflation continues to rise, CFOs must explore every possible avenue for savings.
Businesses are among the first to experience the effects of inflation, as price hikes impact the cost of many things they require to function (including raw materials, supplies, labor, and energy.)
Financial executives are then forced to make difficult strategic decisions, including whether those costs will be absorbed or passed on to their customers.
This is a problem with no clear-cut solution: Absorbing costs can narrow profit margins and hinder growth, while passing on costs can lead customers to opt for cheaper alternatives offered by competitors.
A survey conducted by Salesforce found that 46% of respondents reported an departments that prioritized automation technology were able to reduce costs by 11-30%. BPA solutions accomplish this by eliminating many often-overlooked expenses that impede business’ profitability.
First is the cost of materials. Printing physical copies of customer contracts and invoices is wasteful and expensive, so going digital is a simple way to cut down on costs and improve your bottom line.
By digitizing any of your workflows, BPA solutions eliminate the need for paper in any process including data collection, approvals and signatures, vendor payments, and invoice payment processing.
Automation also helps mitigate fees associated with past-due invoices. When your supplier payments are repeatedly getting stuck in approval bottlenecks, you may find that they miss payment deadlines, resulting in late fees or forgone opportunities for early payment discounts.
Through digital workflow management, these approval processes can initialize and route to approvers automatically. When your teams are empowered to submit approvals and issue vendor payments with a single click, you eliminate overpayments while greatly shortening the invoice lifecycle.
Lastly, there is the cost of mistakes. If you make a mistake and overpay or duplicate an invoice payment, there’s no guarantee that your vendors will take responsibility for rectifying the error.
Similarly, it’s extremely laborious to ask your AP teams to manually match every PO, invoice, and goods receipt; however, if they don’t, you might wind up paying for things you never received.
Automating your 3-way match process can help your teams verify that every line item is appropriately accounted for before issuing payment, and leveraging tools like AI-powered OCR for automatic data extraction can eliminate errors due to manual entry.
#2 – Availability/Quality of Labor
After a wake of uncertainty in the 2022 labor market, many employees are skeptical about taking on a new role in 2023.
As a result, companies whose bandwidth is stretched thin may find their recruitment efforts to be stifled by candidate fears.
Automating tasks can empower your existing teams to be more productive and efficient without adding to your headcount.
When your teams are overwhelmed, increasing your workforce won’t always solve the problem. Digital transformation with BPA can instead empower your existing teams, increasing their efficiency with tools like OCR and workflow automation.
“DocuPhase has supported our business by allowing us to grow without added stress on the corporate team. It allows us to take on more work without adding resources.”
- Cameron Wolfe, Corporate Controller
With OCR, data entry is automated–it eliminates the need for your accounting professionals to spend hours organizing, scanning, filing, and entering data from records.
Workflow automation offloads many time-consuming tasks, like creating and sending invoices. This frees up your existing teams and allows them to redirect their efforts toward things like complex problem solving, decision making, and interpersonal communications.
BPA also helps you eliminate process bottlenecks that stifle efficiency. By being able to understand workflow progress at a glance from analytics reports and dashboards, leaders can quickly identify and take steps to rectify areas where players and processes are blocking productivity.
#3 – Tightening monetary policy
As the Federal Reserve aims to combat hyperinflation, the amount of money in circulation is restricted. This results in limited buying power, for consumers and businesses alike.
Its impacts are further compounded by recession fears that have people saving rather than spending. Actions like these are inevitable, so businesses must prepare to navigate changes in the government’s monetary policies that impact the economy as a whole.
When on the cusp of economic uncertainty, businesses must rely on accurate cash flow visibility to make their decisions.
BPA helps manage this by:
- Integrating with disparate software platforms to create a single source of truth
- Automatically updating your GL
- Providing custom reporting tools to monitor things like past due invoices
- Offering KPI data visualization from an embedded dashboard
These features help businesses stay apprised of what’s happening in their organizations in real time, allowing them to quickly address issues and confidently make projections for the future.
Preparing for the Future
Businesses simply cannot afford to waste time and money on excess materials, data entry errors, non-essential headcount growth, and ill-informed forecast projections this year. With lean business growth top of mind, an investment in business process automation is the best way for CFOs to drive ROI and curtail excess spending in 2023.
Schedule a chat with an automation expert today to see how DocuPhase’s business process automation solutions can help you build your business’ digital resilience strategy for 2023.