Top 10 Considerations For the Quintessential AP/AR Solution

Whether you are evaluating a new platform in Account Payable and Account Receivable automation, or simply performing a periodic health check to ensure you are staying competitive, you should consider these 10 factors for the quintessential AP/AR automation solution:

1. Is it locking you into a particular accounting, finance, or ERP package? Large monolithic platform can hold you hostage and limit your freedom to choose.
2. Does it integrate with what you have? Don’t accept rip-and-replace as the only option, it drives up the cost and risk, and you are bearing all of it.  The choice should be yours, not theirs.  Once you complete the conversion, it is very difficult, and often impossible, to revert to the previous state.  If your backend stays intact, you can simply turn it off if it does not meet your need.
3. What is the highest level of automation it provides? – this directly impact your savings and error rate. Even with complex approval logic and business rules, 100% is now possible with the latest technology.
4. Is it an AP/AR pure play, or is it a small add-on to a large package? Where they make money affects the pace of innovation and how much they care.
5. Is inbound/outbound payment processing part of the package? This last mile is often the most expensive and fragile part of your operation, it should provide an integrated option.  Again, there should be a choice, and it should be yours to make.
6. Are they providing both AP and AR automation? You will need both at some point.  Comprehensive cash management requires you to ultimately coordinate and orchestrate both the inflow and outflow operations in order to meet a cashflow, working capital, or cash conversion cycle objective.
7. Can your business users change the automation flow without IT involvement? Your operation will evolve over time, you cannot afford to wait for others outside of your control to make every little change.  When there is a wait, you are required to manually augment the processing until the change is implemented.  This is the element that are often overlooked when deciding on a solution, and it has the longest lasting impact.
8. How much do you have to maintain? Unless you have a business or legal requirement to keep the system and data in-house, you should run it in the cloud if it is certified and secure.  You will always be on the latest and greatest, and it can grow with your business without worrying about capacity.  It eliminates much of the initial sunk cost and on-going maintenance cost.
9. How much and how long does it take to implement? Time and money matter.
10. Is there a large up-front platform commitment? Avoid sunk cost – unless they are willing to guarantee the result.  Be smart, there is a reason they call it “sunk” cost.

In Juno Payments, we apply this set of criteria towards everything we do.  Whether you have an existing AP/AR automation solution, or still processing some activities manually, we hope these considerations will help you make better decisions.  Knowledge is power.

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Mitigating The Top Challenges Faced by Smaller Businesses

Those of us who also work with smaller businesses understand they face a unique set of obstacles.  There is a good recent article in Investopedia which highlighted the top competitive disadvantages, it discussed five key areas that are working against smaller companies and must be overcome to become successful:

1. Raising Capital
2. Efficiency
3. Purchasing Power
4. Talent Gap
5. Name Recognition

In tackling these challenges, do not make the mistake of trying to fix them all, as most smaller businesses simply do not have the resource to accomplish all at the same time.  It is best to prioritize them, start with those with the largest impact, fastest results, and easiest to implement.

We believe the top candidate is in improving your cashflow and liquidity, which are paramount for smaller businesses.  You can initiate a set of limited, quick, and simple activities to mitigate some of these challenges within your cash management operation. 

• Start with Efficiency – Labor accounts for over 62% of the operation cost in Invoice Processing, it is also the root cause for much of the errors and frauds. By minimizing human intervention through automation, you can cut your cost by 90%, and most importantly – removing labor resource-imposed bottlenecks in your peak seasons.  Invoice can be processed and issued on-time regardless of volume variations, you no longer have to staff based on the peak season, and just to have them idle on slow days.  This removes the efficiency gap in cash management inherent to smaller companies and allowing you to better compete with others.
• Eliminate Talent Gap – Employee turnover and hiring creates a particularly difficult challenge to smaller businesses for several reasons:
  • Tasks are often performed by a small number, or in some cases, one individual. So any turnover, or temporary staffing gaps, can be keenly felt across the entire company.
  • We rarely see knowledge management system, or formal training, in place for most roles. Often, knowledge and best practice stays with the employee, when they leave, the prized optimization achieved throughout their employment goes with them.  You are left with restarting from square 2, or worse, square 1.  AP/AR is an external facing function, your customers and suppliers will see every disruption and billing error, it can do great damage to your reputation, brand recognition, and customer loyalty.  All these damages are easily avoidable, there is no reason for non-action.
  • With today’s low unemployment and competition for skilled talents from other employers, you face two choices:
    • Raise wages and benefits to retain talent – both drive up your cost and escalate the wage spiral.
    • Accept frequent talent drain as a norm – this is often a losing strategy. You will never get ahead of the pack to become successful, especially when you are dealing with skilled resource.

Human is great for creative tasks, no matter what people say about artificial intelligence, at least for now, human innovates better than any technology or machine.  However, in invoice processing, there is little room for creativity, much of tasks are repetitive and codified.  Therefore, we believe there is a third option for dealing with the talent gap challenge – by automating the process.  The knowledge and skills are now kept within the automation, it becomes an asset which cannot be lured away by higher pay or better benefits, you can dramatically reduce your talent gap headache.  Your invoice processing and billing will always be consistent, accurate, and timely.  It improves your #5 challenge – name recognition, by increasing customer/supplier satisfaction and cultivating loyalty.

These initiatives ultimately benefit key financial metrics such as reducing Days-Sales-Outstanding, optimizing Days-Payable-Outstanding, and reduces your Cash-Conversion-Cycle.  In conjunction with a stronger cashflow statement, they will improve your #1 challenge – Ability to raise new capital regardless of the funding channel.

In Juno Payments, we are eager to work with you and start this journey.  We provide an invoice processing automation solution that delivers all the benefits we discussed above.  It is a cloud-based pay-for-what-you-use platform, there is no hardware to buy or software to maintain.  You can easily start a small pilot to experience the benefits and grow your usage if you like what you see.  It allows you to reap the benefits while preserving your precious capital.

We hope this article resonates with you.  Please visit the key information links below and we would appreciate an opportunity to sharing more and design a solution that is right for you. 

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1-888-514-8118

[email protected]

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www.junopayments.com

THE FASCINATING HISTORY OF AP/AR

While accounts payable and accounts receivable processes seem to be progressing into a new age, the origin of invoicing dates back all the way to the stone age.  It is always interesting to learn where and how this process began and how much it differs from processes today.

It is not surprising that the earliest records of transactions and their details comes from the first clay tablets of the ancient Sumerians.  The earliest records of sale on these tablets were discovered with references to the most important daily needs, beer and bread.  The physical act of transcribing and recording sales records remained relatively unchanged until the time of the Romans.  Tedious calculations became easier with the arrival of the abacus, often referred to as the first calculator.  It allowed for simple calculations using beads and provided a visual confirmation of calculations and pricing for both parties involved.

The middle ages brought us the next generation of financial and transactional record keeping – the invoice book.  The use of books for record keeping by merchants gave birth to the double entry bookkeeping system.  What does this mean?  This was the first time that a transaction was recorded twice, once as a debit and once as a credit.  Transactional details started emerging around this time as well such as pricing, dates, names of customers, and product descriptions.  Once the specifics and details of transactions started becoming the standard, the path was set for modern invoicing and accounting basics.

The method of manually recording transaction details soon became obsolete with the rise of modern mechanics and industrialism.  Increasing complexity of transactions as well as the sheer number of them rendered this process useless.  This gave birth to the first “mechanical” solution to invoicing and record keeping, “loose leaf accounting.”  This technique allowed for records to be added and removed at will from an organizational “binder” type device.  As innovative as this new system was, many believe it gave birth to the first instances of fraud.

As some say the birth of modern invoicing and accounting came from loose leaf processes, others say modern techniques share a birthday with the first computer developed in 1941.  However, early computing software involved a lot of manual processes that left room for errors and miscalculations.  The evolution of floppy and compact disks allowed for more advanced programs to be installed directly onto computers.

1982 witnessed the birth of the internet and with it, opportunities to advance invoicing technologies.  The ultimate goal of advancement of these programs is to do more in less time.  There have been an abundance of workflow tools developed, many of which are still used today.  While workflow tools are useful, they still allow for errors that true automation systems eliminate.

Juno Payments, we offer a fully automated invoice-to-pay and order-to-cash platform that utilizes machine learning to increase productivity and efficiencies, reduce fraud and errors, and pave the way for the newest generation of AP/AR platforms. If you would like to learn more about what sets us apart and how we can help you evolve your invoicing processes, please let us know and we look forward to working with you to help you out of the old and into the new!

Want to Learn More?

1-888-514-8118

[email protected]

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Learn More

www.junopayments.com