With Australia’s gross domestic product (GDP) estimated to be reduced by $34.2 billion over the course of the year, there is an immediate need for business owners to reduce costs and improve processes for the future through digital transformation, according to MessageXchange.
Automating areas of the business that would otherwise involve mundane, repetitive tasks, such as data entry, can provide better value for operational costs and employee productivity. For example, Artificial intelligence (AI) technology has made it possible to streamline duties and provide faster turnaround times for customers and suppliers.
MessageXchange managing director, John Delaney said, “For business leaders, navigating successfully through a crisis means focusing not just on short-term survival but on pivoting the business and processes to reduce unnecessary costs, optimise team performance, and be prepared for the long-term future of business. Automation and digitalised processing tools, such as e-invoicing can deliver these benefits and help protect small and medium businesses from the negative effects of a recession.”
MessageXchange has identified three areas that automation can improve:
Supply chain management
Typically, managing the supply chain involves emailing orders and invoices, and then manually entering the data into systems and spreadsheets. This is the same process for buyers and suppliers, and costs time and money.
Enterprise resource planning (ERP) and accounting software uses electronic data interchange (EDI) to streamline supply chain management. For example, when a buyer’s inventory decreases to a predefined level, its ERP software can automatically raise and send a purchase order through EDI to the supplier’s system. The supplier can then easily action the order by creating and sending the invoice, which will automatically appear in the buyer’s ERP system.
This process can create a faster payment cycle and improve cashflow for suppliers, while giving the buyers the advantage of processing invoices faster.
Accounts payable processes
Automating the exchange of invoices reduces the errors associated with manual data entry, which means companies don’t incur costs to fix these mistakes. Automating some of the checks and verifications across invoices, purchase orders, and deliveries, can also help reduce labour-intensive processes.
When businesses are waiting to receive goods from suppliers with no precise knowledge of when the goods will be delivered, they can’t plan ahead effectively.
Suppliers can send advanced shipping notices (ASNs), with information about what is being sent, how it’s packed, when it will arrive, and more, using EDI. This information makes the process of receiving goods cheaper and more efficient.
E-invoicing means invoices can be shared directly between buyers’ and suppliers’ software. This reduces the labour required to send invoices, streamlines preparation and issuing of invoices, and increases cashflow for suppliers, letting buyers make faster payments.
“Being smart about investments and company spending will be the key to businesses surviving in an unstable operating environment,” Delaney added.
“Automation technology is an important factor for business success and will be pivotal in businesses overcoming challenging times. E-invoicing is a good place to start because it delivers strong visibility and control, both of which are essential to running a sustainable business that remains viable in the long term.”