Education institutions are forced to do more with less, putting extra stress on employees. Without realizing it, schools often have processes that create even more work, particularly in the business office. Fortunately, accounts payable (AP) automation can cure fatigue from overwhelming manual workloads and give AP staff more time to focus on something much more important: the students.
Challenges in the business office:
Without the help of automation, AP specialists spend several hours each day on tedious, repetitive tasks such as keying invoice data, pushing paper, fixing typos, chasing down information, and responding to calls and emails from suppliers and stakeholders about the status of invoices and payments. All the while, school business officers also juggle additional responsibilities impacting their institution and student outcomes.
Many AP departments still use manual, paper-based AP processes, resulting in massive amounts of time allocations during a typical work week. You might be surprised to learn that as much as 17 hours per week – which is equal to 42 percent of a full-time employee’s workload – is spent on non-payroll spending.
Unfortunately, antiquated processes like those above lead to extreme fatigue in education AP staff. As a result, back-office departments can’t progress and suffer from high turnover rates, inefficiency, late payments, increased risk of fraud, and strained relationships with vendors.
In a July 2022 survey of 226 Chief Financial Officers (CFOs) conducted by Gartner, Inc., digital acceleration was the top spending priority for CFOs over the next 12 months and that most all of them planned to protect their digital investments as they cut costs elsewhere in the business. In fact, 98 percent of respondents said they will protect digital investments and of those, 66 percent stating they plan to increase their investments in the category. Among technology priorities, CFOs have particularly prioritized back-office automation as a key to driving down costs in the face of ongoing inflation.
Here are 7 factors causing burnout in education finance departments–and 7 reasons AP automation is the antidote:
1. Antiquated processes and manual workarounds:
Outdated processes are making finance teams less efficient and secure. According to the BakerHostetler 2021 Data Security Incident Response Report, the education sector is the highest-targeted industry for payment fraud. Additionally, the FBI predicts ransomware attacks will become an even bigger threat to the industry, according to a news article published last September.
Streamlined invoice and payment automation saves finance departments thousands of hours annually by eliminating tedious manual tasks and increasing efficiency. Simultaneously, users benefit from enhanced security as best-in-class providers have internal security teams that help them mitigate the risk of fraud. This means that users save 80 percent of their time on invoice and payment processing while benefitting from more protection against fraudulent attempts.
2. Wasted staff time on manually sorting and handling paper invoices:
The average education AP department processes between 6,000 to 20,000 invoices a year, which can be exhausting for finance teams with only 1-2 employees.
Invoice automation eliminates manual data entry and creates faster invoice approvals, allowing you to take advantage of early pay discounts. Also, with invoice automation implemented, users can process invoices 5 times faster than manual processing.
3. Lack of modern software:
If you’re suffering from heavy turnover, staffing shortages, or staff burnout, a lack of automation software may be why.
Automation eliminates the manual, repetitive tasks like cutting checks and stuffing envelopes that overwhelm AP staff. With these eliminated, staff can focus on more student-facing activities and projects while exploring new ways to run their schools more strategically and profitably. Automation also enables AP departments to efficiently scale their operations without the need to hire and train additional staff. Employees also benefit from career advancement.
4. Minimal attention workflow management:
Process management is critical to an organization’s success, especially regarding accounts payable. Take the invoice-to-pay cycle, for example. Many moving parts with lots of involvement make it challenging to track who has an invoice or where it is in the approval process.
Tiered approval is one of the many great features of invoice automation. Invoices are electronically routed through all required approvers, eliminating invoices getting lost in the shuffle and removing any guess work on who an invoice is sitting with.
5. Lack of data insights:
Without access to real-time reporting and on-demand data, businesses lack valuable insights into finance operations. That’s risky because organizations could quickly go under if finances are mishandled.
AP automation solutions provide enhanced reporting capabilities that are easy to use and navigate, meaning you can instantly tell how your organization is performing. Additionally, users can better monitor cash flow, which is critical for success.
6. Lack of effective exception reporting:
There are several scenarios where mismatches occur in accounts payable, called ‘exceptions.’ These exceptions range from errors in coding, duplicate payments, vendor error, and more. Humans aren’t perfect, and there’s always a chance of mistakes or discrepancies when one or more people are involved.
Leading invoice and payment automation platforms help with exceptions since they speed up processing time, reduce errors by 80 percent, and create a virtual filing cabinet. With paperless document management, users can access invoices, payment history reports, archived documents, and payment status reports.
7. Poorly defined workflows
Manual processes make it challenging to divide tasks in the invoice-to-pay cycle. This can be even more of a challenge for departments suffering from severe staffing shortages and heavy turnover.
Workflow automation is one of the ways your finance department can streamline its accounting office. Implementing a best-in-class AP automation solution simplifies workflows because the software creates digital layers of approval, paperless document management, and role-based controls.
In conclusion, business offices play a critical role in education and enhance student experiences. However, manual processing makes it challenging for them to effectively manage time and resources. With automation in place, schools benefit from increased efficiency, security, reduced costs, and, most importantly, more fulfilled employees. With more time and resources, your employees can better focus on serving your faculty, your vendors, and your students.
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