How Solving Invoice Delays Can Increase Employee Retention

A little AR automation can go a long way

After a year in which everything has changed, businesses are facing numerous challenges trying to keep up with new innovations. As companies work to keep pace with emerging trends, one process sticks out for being plagued by a lack of digitalization: invoicing and accounts receivable (AR). 

Many organizations still rely on manually processing invoices or outdated legacy systems to manage their AR process, which is responsible for maintaining incoming cash flow. Such practices often hold back businesses, preventing them from truly growing and thriving. I think we can all agree, managing a single invoice should neither take upwards of 11 hours, nor should it require as many as 15 different people to complete the process. But sadly, our survey recently revealed that this is what goes into manual invoice processing, which is more prevalent than it needs to be.
 

By manually processing payments, employees are wasting their time and energy on practices that can easily be replaced by digital solutions. When an employee feels like their days are being wasted, they are prone to looking for other opportunities that will make better use of their skills and work. Digitally transforming the invoicing process doesn’t eliminate real jobs, rather, it actually better utilizes employees and gives them the opportunity to achieve even greater performance – helping your organization’s overall business outcomes. 

More often than many realize, AR delays can lead to a breaking point for employee retention – slowing raises, straining resources, impacting morale, and ultimately leading employees to seek job opportunities elsewhere. Strengthening cash flow with a more automated, tech-driven AR system not only enhances financial management, but can also have lasting effects on retaining top talent.

Businesses Are Wasting Potential on Manual Processing

By relying on legacy systems and manually processing invoices, companies are risking their cash flow, customer retention, required innovation and the overall strength of their workforce. According to BlueSnap’s Progressing Payments report, which examined the current state of global accounts receivable and the impact automation could have on a company’s productivity, many business leaders say their companies as a whole have been threatened by late payments throughout the pandemic – in fact, 28% of businesses were unable to process paper checks because no one could be in the office. This issue and its impact are largely avoidable.

Beyond the impacts on cash flow, many of those surveyed found manual AR processes had a significant negative effect on their employees, ranging from those involved in the manual processes themselves to those deterred by their impact on operations. In the same report, senior decision makers – from department managers to CEOs – estimated that, on average, employees spend 11 working hours managing a single invoice, with 67% reporting that up to 15 people were involved in the process. Some companies reported even higher numbers, clearly showing how time-consuming invoice processing procedures have remained, despite the rapid innovation and adoption of technology for other payments.

This laborious process takes a real toll on the employees responsible for these tasks, with 27% of respondents reporting they’ve had difficulty retaining good employees as a direct result of poor accounts receivable processing. With offices remaining closed (whether temporary or permanent), resulting in large numbers of talent working remotely, the impact of Covid only amplified how exhausting this process has become for employees and shone a light on why these processes should be changed during our collective economic recovery. For instance, due to the Covid-19 pandemic, 50% of respondents that still accept paper checks for invoices want to offer more electronic payments types and 41% want to reduce the number of payments they receive physically altogether.

Boost Productivity and Morale

Who doesn’t want a happy workplace? In BlueSnap’s report, businesses that wanted to invest more in accounts receivable automation technology pointed to improved productivity (32%) and employee morale (18%) as key drivers behind the decision. Every human resources team knows well the cost and time resources that come along with hiring and ramping up new staff when a member of the team leaves. Suffice to say, it’s difficult and can further tax the resources and energy of employees at large, who personally absorb the true fallout of turnover.

Businesses have been reluctant to make the change to digital practices for years, worried about how it would impact their day-to-day, often missing the positive impacts the technology could have on both their bottom line and their employees. Investing in AR automation does so much more than help your cash flow, it’s an investment into what your employees desperately need to function properly and remain productive. If businesses continue to resist changing with the times, there will be clear impacts on their staff. Then, in addition to cash flow and inefficiencies, companies will also have to deal with the painful, yet avoidable issue of recruitment. All of this presents a legitimate threat to the health of any organization, but fortunately, a little AR automation can go a long way to keep businesses running smoothly.

Author Bio

Ralph Dangelmaier is Chief Executive Officer at BlueSnap Inc, which offers an all-in-one payment platform that seamlessly integrates with an organization’s existing business applications and processes – whether operating domestically or globally. Ralph draws on over 30 years’ experience running fintech and financial services companies, ultimately helping businesses benefit from the power of digital payments.  Visit https://home.bluesnap.com/ Connect Ralph Dangelmaier