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Financial Automation Should Become a Top Focus for Remote Companies – ReadWrite

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Deanna Ritchie


Financial automation is not a top focus right now with remote companies. Your accounts payable people are almost certainly struggling.

Isolation from other employees in the organization often occurs with the Accounts Payable department. On top of that, while businesses put AP teams in charge of paying invoices and managing expenditures, the AP teams often struggle with various complexities associated with that process.

One contributing factor to making life difficult for your AP people is that, all too often, every business unit has its own system of expense approvals. That being the case, the purpose of the invoice, the expenditure approval, and vendor payment clearance, were all unclear to the AP departments.

Work-from-Home (WFH) Adds Another Layer of Complexity

Existing difficulties associated with the smooth functioning of your AP department became even more pronounced during the pandemic of 2020. The sudden, unforeseen wave of “going remote” led to less communication between business units and AP. It became even more apparent that other business units do not see their relationship with AP as mission-critical.

Fortunately, there is a solution to be found in AP automation services such as Stampli. However, the key for business owners is that any AP financial automation system must do more than simply automate the payment of digitally approved invoices.

“That’s the easiest part of the process,” according to Stampli CEO Eyal Feldman. Feldman responded to a question about the challenges companies face when trying to get their approved vendors paid on time. “Most AP tools focus on the payment component of the Procure to Pay (P2P) Process, but issuing a payment is the final step,” he said. “Ninety-percent of the challenges associated with getting vendors paid on time happens during the process preceding the payment, which includes verifying and getting the proper approvals to pay the invoice.”

Instead, financial automation should focus on providing a solution for the collaborative effort required between AP and the rest of the organization. Business owners should keep looking until they find an AP automation system with built-in collaboration and streamlined access to all necessary information. Things like documentation, purchase orders, invoice history, and whatever else necessary all contributed to businesses making informed decisions. In addition, solving AP communication issues makes for a faster, more accurate approval process. This helps businesses pay their vendors on time.

Using Financial Automation to Address the WFH Impact on Accounts Payable

According to Feldman, the accelerated rush to WFH in the wake of the global Covid-19 pandemic has impacted AP departments significantly. “Finance departments that relied on manual, paper-based processes suffered during the pandemic and had to urgently resolve this to be productive and effective in this remote environment,” he said.

For starters, businesses needed to rapidly digitize manual processes. CFOs and finance leaders everywhere were forced to push the priority for digital transformation to the top of the list. They needed to find remote-friendly tools that provided collaboration and integrated with their existing finance and accounting systems.

At the time, businesses focused on solving important everyday tasks. For example, businesses focused on approving and paying invoices. As a result, resolving communication and collaboration issues that were already in place prior to vacating office space wasn’t necessarily on the radar.

How Businesses Can Effectively Assess Current AP Systems

Many businesses remain hyper-focused on the payment and approval process as a measure of success, and of course, that’s completely understandable. However, there’s no denying the importance and relevance of these key financial indicators for gauging business performance.

In truth, however, there are many metrics to consider. If your AP team doesn’t know or have time to understand other key metrics because they’re just too busy getting invoices approved and paid, it’s probably time to automate.

Listed below are four additional metrics your AP people need to be aware of as they make the transition to a business model that includes an increase in WFH employees and vendors. You should make each of these metrics available. Additionally, you should clearly communicate to not only your AP team but key stakeholders across your entire organization. Finally, if you are looking at an AP financial automation system that does not offer this level of transparency and granularity, ask your AP folks for input.

1. Tracking, Reporting, and Leveraging Vendor Discounts

What percentage of discounts does your AP team currently capture for on-time payments or early pay each reporting period? Is your business leaving money on the table simply because an invoice sat on someone’s desk a few days too many? Rooting out and eliminating these oversights can add up quickly.

Being aware of discount payment opportunities is likely to highlight additional ways to achieve savings and reduce your overall AP costs. Taking even a small percentage off an invoice for prompt payment can add up over the course of time. AP automation can free time for your AP team to focus on increasing prompt-payment savings exponentially through negotiations with other vendors in your supply chain.

2. Increased Focus on Supplier Relationships 

How many supplier-side inquiries, discrepancies, and disputes are your AP team dealing with? Unfortunately, in far too many cases, businesses are just trying to stay ahead of the invoice stack and approve payments just to keep the business operational. Ask your AP people if they’ve ever had misgivings about paying a specific invoice and they might list several.

If there is a specific issue, you need to address with regard to a particular invoice? Additionally, is there an ongoing problem with a vendor? Automating AP paperwork will give your people the “breathing room” they need to do a better job. Specifically, they will do a better job of following up on any questionable transactions.

3. Spotting Inaccurate and/or Duplicate Payments

What percentage of monthly payments are incorrect? Who made them, and why did they make them? These are vital statistics for assessing where your business might be leaking cash unnecessarily. Most often, inaccurate payments are the result of simple mistakes, but not always. AP financial automation brings both clarity and increased accountability.

Having a better understanding of inaccurate or duplicate invoicing very often leads to uncovering further training needs. This could also lead to process problems or software issues. Understanding the rate of duplicate payments can identify two things. First, they can identify whether a vendor is double billing, in addition to whether there are other potential risks of fraud.

4. Tracking Team Efficiencies

Which team members process the most invoices? Automation can show you who is using their time efficiently and who is struggling. It’s good to hone in on the team members experiencing problems. This can help you identify whether or not you need to resolve an issue of better training methods. Other issues you may need to look into could include process improvements or distribution of workload.

The AP roadblocks and complications created by an increased need for remote work aren’t going away any time soon. Unchecked, these issues can cause additional friction and distancing between AP and other business units. To smooth things over, many businesses would benefit by partnering with AP automation services. It’s okay if you haven’t yet considered this option. It’s helpful to start with a little research simply by asking your AP employees for feedback.

Image credit: nataliya vaitkevich; pexels; thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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Google eyed for $2 billion Anthropic deal after major Amazon play


London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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