According to the Australian Bureau of Statistics, two thirds of Australian businesses reported revenue had decreased during the COVID-19 pandemic in comparison to the same period the previous year. The recession caused by COVID-19 will create further financial challenges for Australian businesses, and Australia’s gross domestic product (GDP) is estimated to be reduced by $34.2 billion over the course of the year. This creates an immediate and urgent need for Australian business owners to reduce costs and improve processes for the future through digital transformation, according to MessageXchange.
John Delaney, managing director, MessageXchange, 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.”
Automating areas of the business that would otherwise involve mundane, repetitive tasks, such as data entry, can provide the business with a better value for operational costs and employee productivity. Artificial intelligence (AI) technology has made it possible to streamline duties and provide faster turn around times for customers and suppliers.
MessageXchange has identified three areas that automation can improve:
1. 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 both businesses time and money.
Automating these processes makes both companies more efficient. 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 and building credibility with suppliers.
2. 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. In fact, the Australian Taxation Office (ATO) estimates e-invoicing can save up to $21.69 per invoice. Automating some of the checks and verifications across invoices, purchase orders, and deliveries, can also help reduce labour-intensive processes.
This means employees can focus on more valuable tasks, and reduce the time and work needed to crosscheck all the information.
3. Goods receipting
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. This can create unnecessary costs. 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 lets businesses allocate staff members to process deliveries, making the process of receiving goods much cheaper and more efficient.
E-invoicing offers businesses another avenue to reduce costs. E-invoicing means invoices can be shared directly between buyers’ and suppliers’ software. This delivers significant benefits such as:
- reducing the labour required to send invoices, letting employees get on with more important tasks
- improving the invoicing process through streamlined preparation and issuing of invoices
- increasing cashflow for suppliers, letting buyers make faster payments, which can also provide them with discounts from suppliers for early payments.
John Delaney said, “Being smart about investments and company spending will be the key to businesses surviving in an unstable operating environment. 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. Businesses should work with an e-invoicing supplier with a strong reputation and robust offering to ensure they can fully leverage the technology.”