Interruptions aren’t merely annoying — they’re the bane of workplace productivity. We’ve all experienced the frustration of being fully immersed in a task when someone interrupts us with a question or comment that breaks our concentration. Beyond the irritation that these distractions cause, they can also severely impact efficiency.
Consider the fact that it takes about 23 minutes following an interruption before an employee can regain focus on the initial task, according to University of California Irvine professor Gloria Mark. And that’s just the time it takes for one intrusion. The lost time can add up quickly when you factor in the multiple distractions a person gets throughout a day, and multiply it by the number of people who experience these interruptions.
Unfortunately, this scenario happens all too often when accounts-payable professionals are interrupted by vendors’ payment-related inquiries. Over 40% of finance leaders in MineralTree’s State of AP 2022 report say their teams spend six or more hours each month responding to these inquiries. Some dedicate more than 20 hours to the task.
Manual invoice and payment processing is outdated, time-consuming and error-prone, often leading to late payments and increased vendor inquiries. The pandemic only exacerbated the problem. An overwhelming number of AP teams (83%) report that supply chain disruptions from the pandemic have caused delays and challenges in invoice processing, payments and reconciliation. It’s become a vicious cycle, with delays inevitably leading to more inquiries — making a difficult situation worse.
The impact that interruptions have on productivity is particularly problematic for today’s lean AP teams as they struggle to hire and retain talent amid a shortage of quality candidates. But, the consequences of vendor interruptions can be felt beyond the organization. Unsurprisingly, vendors don’t like having to chase down payments any more than AP teams like getting asked about them. In fact, it’s the top pain point for vendors in the customer payment process, and many aren’t satisfied with buyers’ AP teams’ performance in addressing their needs. Only 56% of vendors rate AP teams highly on handling their inquiries quickly and effectively.
This creates an added concern for finance leaders. One of the key lessons that emerged from the pandemic is how much companies depend on their vendors to provide the goods and materials needed to run their businesses effectively. As a result, many AP teams are prioritizing strong vendor relationships and satisfaction to help ensure ongoing access to supplies. Timely payments go a long way in that regard.
To address the inherent inefficiencies and costs of manual AP processing, and avoid payment-related interruptions, many are turning to automation. By removing time-consuming manual tasks, invoice automation expedites processing, increases accuracy and frees up the AP team to focus on more important activities.
Similarly, electronic payments speed up the payment cycle, addressing vendors’ top priorities in the process while also improving cash flow. E-payments are also more secure, helping to protect both buyers and suppliers against fraud. Lastly, they increase visibility and efficiency, while reducing AP processing costs. In fact, the benefits that e-payments provide to AP teams and vendors make them attractive to both parties.
One major obstacle impeding e-payment adoption, however, is finance leaders’ concern that it’s too time-consuming for their overburdened AP teams to contact and onboard vendors. To overcome that concern, forward-thinking companies are turning to managed services from their payment services providers. Some handle all the enrollment, administrative tasks and ongoing vendor management of the payment process, including all payment inquiries. These services not only free up the AP team to focus on other activities, but they also ensure that vendors receive prompt and thorough responses from a dedicated managed payment services team.
While interruptions happen in the natural course of business, there’s no reason that we have to just accept them. Time-consuming vendor payment inquiries are a major cause of productivity loss and stress for overstretched AP teams. By embracing automation and engaging managed payment services, AP teams can gain real relief and efficiencies, while benefiting from a faster, efficient, cost-effective and transparent payment process. Additionally, prompt payments will not only reduce vendor inquiries, but also strengthen this critical relationship at a time when it’s needed most.
Jill Rosenthal is vice president of payment operations for MineralTree.
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