For treasury professionals across the globe, regardless of the size and type of organisation, two words are likely to be high on the agenda – sustainability and efficiency, says Owen Balloch, Marketing Manager at Alaris, a Kodak Alaris business.
The business landscape remains challenging, to say the least, which means enterprises are constantly striving for better financial performance. At the same time, sustainability is clearly no longer a nice-to-have, but an essential facet of any business. Happily, the two work in harmony, with sustainable practices driving improved treasury performance.
Going paperless is a good example. While managers are introducing sustainable practices across every treasury function, many are achieving measurable results by taking aim at the paper-intensive receivables process. As they work to build green receivables operations that reduce their carbon footprints, they are also finding that their initiatives are driving operational efficiencies and improving their financial results on many levels. By moving toward a ‘zero return’ environment, where they send and receive information electronically with no paper returned, they can reduce transaction costs, lower indirect business costs, save time, improve transparency and increase document security.
What’s more, banking productivity improves 39% when electronic forms replace paper and workflows are used to streamline processes, according to AIIM research.
Slowly but surely
It was June 30th, 1975 when Bloomberg Businessweek first proposed the digital, paperless, office. More than 40 years later, we’re clearly not there. Despite the optimism in the 70s and the abundance of ways to cut down on paper use, most organisations still have a long way to go.
Our every day is still so permeated with paper – and there’s a clear resistance from businesses to the thought of digitisation. Research firm Keypoint Intelligence explored the status of business going paperless in a December 2016 survey. When asked if they thought it was possible to move towards a paperless office, only 15% of the respondents thought it was something they could achieve and another 23% thought it was impossible.
However, thanks to developments in technology, those reasons no longer stack up. Formats like JPEG and PDF are well on their way to outlasting many of the different businesses that refuse to digitise their operations, simply because they streamline businesses. It is true that some older computer records can be difficult to access for now, but with standard migration efforts and long-term preservation processes, they can be handled as part of the document lifecycle management.
Regulations have moved on to the point where many now include requirements that can only be met by digital processes, so that a complete chain of custody is maintained. Meanwhile, those businesses that follow the false belief that paper-based processes are cheaper, do so with a heavy price tag. The total cost of operating a primarily paper focused office comes with a list of externalities including printers, network connections, ink, toner, the paper itself, and the maintenance of all of these. As businesses grow, so do these costs. At enterprise level, these costs are scaled up only to culminate in waste.
The human cost
When paper is a part of a business input, as it is in so many treasury departments, there are significant labour costs needed to manually process information coming into the business.
Forward thinking organisations are looking to reduce the amount of paper flowing in and out of their treasury departments on a daily basis. Deploying solutions to automate and digitise the treasury function, saves paper and the planet, cuts costs as well as freeing up employees to do more meaningful tasks and reduce the average time taken for both incoming and outgoing transactions.
Going paperless is one of the most obvious and wide-reaching ways of embedding sustainability right at the heart of the treasury function. After all, invoicing costs money; eliminating paper from the process reduces the overhead. The good news for treasurers is that invoice processing is one of the most advanced applications, with digital solutions available to handle end-to-end processing, in many cases without any human interaction.
The benefits of digitising paper inputs in an accounts payable process include:
- Faster processing and easier control of payment timing to take advantage of discounts or avoid penalties
- Avoid costly and time-consuming effort to match invoices and purchase orders
- Reduce time consuming manual efforts involved in tracking and chasing approvals
And finally, here’s a stat for you to conjure with. The US Treasury Department estimates it is saving $450m annually by reducing the cost of manually entering invoices and responding to invoice inquiries. These government wide savings equal roughly one quarter of the $2.1 billion of the efficiency savings that the President’s 2012 budget called upon agencies to identify.
While it’s clear your treasury department won’t be able to save anywhere near this sum, scale it down and the efficiency savings are still well worth having. And you’ll be driving sustainability too, making everyone a winner!