How does burnout affect business?
Inattentiveness, disengagement, low motivation and decreased productivity – these are just some of the many signs of employee fatigue organisations need to have on their radar. Too often, poor management and an increased workload are behind poor performance, according to the Harvard Business Review.
Most common causes of burnout
- Unclear expectations
- Poor communication
- Being overworked and underappreciated
- Feeling the need to constantly communicate
- Working in a toxic environment
- Lack of support from a manager and/or co-workers
- Micromanagement
Five signs of employee stress
- Regularly arriving late to work
- Absenteeism
- Emotional, mental, and physical exhaustion
- Disengagement
- Decreased productivity
In addition to causing dissatisfaction amongst employees, burnout also harms financial processes. A well-rested employee is more likely to deliver high-quality output than one who is struggling with a demanding workload. If a business wants to meet its financial and overall business goals, it must prioritise a healthy work-life balance.
Whether companies realise it or not, frustration from overtime carries a hefty price tag – it drives valuable talent away from the company. It’s why most companies feel short-staffed.
Employees experiencing exhaustion were six times more likely to report they intend to move to a new company.*
Overtired, overworked employees simply won’t perform as per their usual standards. If you’re frequently seeing symptoms like errors and missed deadlines within your processes, it may be a sign of stress.
Failure to take action against burnout in AP can lead to:
Delayed month-end
Late payments
Errors and risk of fraud
Slow reimbursements
Difficulty in tracking abuse
Time-consuming approvals
Complex and lengthy audit
Damaged vendor relationships
Why is my team suffering from burnout?
Recent research has found that 55% of finance professionals do not have enough time to complete routine tasks. When the majority of accounting processes are completed through makeshift or outdated solutions, it results in a time-consuming workflow. The research also reveals the average approval timeline is now extended to 11 days because of the remote-work-related constraints.
63% of respondents in a survey revealed that lack of visibility into accounting processes leads to overtime. *
Overlooking process enhancement means damaging the overall output of the finance department. For example, paying vendors by paper checks might cause delays due to waiting for them to arrive by regular mail, or a manual approval process, which in turn can upset your vendor and make them decide to move to a company that offers e-payments.
78% of finance professionals say tech-based solutions have freed up their time to focus on more high-level tasks, and no longer have to spend hours doing manual data entry
Common culprits forcing accounting teams overtime:
- Manual data entry
- Paperwork and filing
- Limited access to data
- Disconnected processes
- Delays in reporting
Why does AP take up so much time?
The whole cycle of the AP process includes invoice data capture, coding invoices, approvals, matching invoices to purchase orders, releasing payments, and reimbursing employees. Each of these workflows is an integral part of a company’s financial statements and a healthy cash flow.
To better understand how much time each process consumes and uncover areas of unnecessary time consumption, we’re going to break down each AP process.*
How much time does it take to process one purchase order (PO) manually?
There are too many documents required to manually process a single PO and it needs constant human intervention. Plus, an endless paper trail, missing POs,
hours of data entry, and emails between the finance staff, vendors, and approvers accentuates the problem of overtime.
To understand which areas of POs consume the most time, we need to breakdown the purchase order workflow.*
Without a properly structured PO system, it can take longer than normal for AP teams to conduct a three-way match, and record and archive the document.
Typically, the PO cycle starts with selecting goods and services, confirming a vendor, reviewing the requisition, securing budget approval, preparing and sending the PO, receiving the goods or services, conducting a 3-way match of the order, and then finally archiving.
The most laborious part of the workflow is three-way matching, taking up approximately 25% of the overall process. It’s where the purchase order, invoice and goods receipt are compared to make sure they match before an invoice is approved for payment. Without a robust matching process, a financial audit could be chaotic
When the AP team is manually assigned to these repetitive tasks, they end up spending less time on high-impact work, like cash flow forecasting. As a result, their job satisfaction and productivity also decrease.
How long does it take to manually process one invoice?
Not only does processing invoices manually drive high costs and delays, but it’s also an inefficient use of talent and resources. According to research, paper-based invoices were amongst the top three factors damaging productivity.
An average of 40% of invoices are still arriving on paper, a study found.*
Manually entering data, coding, and following up with approvers can significantly slow down the invoice processing timeline.
In order to begin processing an invoice, you’ll need to cross-check details like date and vendor — this step alone can take up to 10% of the workday. Once the invoice is verified, a further 40% of the workday is spent entering it into the system. Submitting for approval and following up can use up another 30%. The last 20% is quickly used up by sending the invoice off for payment and archiving the document.
Overall, approvals and follow-ups take a hefty toll on the AP team. Mostly these are through emails or other informal routes, meaning someone in accounting must continuously work on moving the invoice to the next stage.
It takes 11 days to approve an invoice, on average. *
How long does it take to process one payment?
In a traditional vendor payment system, an AP team member receives an invoice, they pass it forward for approval, source vendor payment details, prepare a check, get it signed, and then finally mails it to the vendor. The bulk of the process is spent going back and forth with vendors, approvers, and check signees causing major delays. 72% of CFOs say staff spends about 10 hours per week handling new vendor registration, supplier queries, issuing payments, and other related tasks.
About 80% of all invoices are paid by writing a check, and one payment can take up to five days to settle, using traditional methods.*
Like invoice approvals, payments also consume a great deal of time and effort to reach the finish line in the AP department.
On average it takes about 30 days to complete one payment. Common constraints contributing to this lengthy timeline include:
- A massive volume to process on a daily basis.
- Reduced productivity due to attention to other tasks, limited staff or time, mental fatigue, etc.
- Manual errors arising from issues like typos and duplicate data entry
How long does it take to process one expense receipt?
Sifting through stacks of paper receipts to verify reports is extremely time-consuming. This takes a significant toll on productivity considering expense receipts are often wrought with discrepancies – according to a report one in five expense reports contain errors.
On average, it takes approximately 33 minutes to complete one expense report
To make matters even more complicated, expense violations rocketed by 292% during the pandemic. Why? The simple answer is that more staff were working from home. This meant that some started putting items such as office equipment and meals on expenses even when these items were not supposed to be bought with company funds. There was a lack of clarity over some items, and all too often it was left to AP teams to try and clear up the confusion.*
Processing paper-based expense reports takes a hefty toll on employees, as we see in the first stage, resulting in constant back and forth between staff and the AP team.
The simple act of gathering receipts and files from employees can take up to 35% of an accountant’s day. Another 20% is spent entering the data, submitting the expense report and sending it to the manager and finance team for review. Once signed off, the employee has to enter data once again, and then finally complete the reimbursement. On average, it takes about 33 minutes overall to process one expense report.
How can you boost AP efficiency?
When choosing a solution for your AP, it’s important to highlight any manual processes that can benefit from automation. By identifying your most pressing pain points, you can adopt a solution that can eliminate repetitive tasks and free up capacity for more strategic work. Let’s examine the pros and cons of the most common tools available today.
- Data Entry Tools Document
- Management Systems
- AP Automation
Data Entry Tools
Using OCR technology, data entry tools eliminate tedious and labor-intensive manual entry by providing solutions for data extraction, verification, and cloud
migration.
Most pre-pandemic accounting departments were not set up to accommodate a remote work environment, leading to confusion and haphazard fixes to AP processes that have resulted in frequent errors. In fact, 88% of finance professionals say most payment errors are caused by manual data entry.*
Document Management Software
Document management software (DMS) allows you to receive, store, manage, and retrieve documents electronically. Physical copies of documents can be uploaded directly into the system with a scanner or imported online. The solution makes storing, organising, and retrieving documents a smooth and easy process.
It costs about £25,000 to fill a 4-drawer file cabinet and £2,100 per year to maintain it.*
AP Automation
An AP automation solution digitises the accounts payable part of your business. It uses cloud-based technology to manage invoices and other financial transactions between a business and its vendors. This reduces manual work and avoids human errors, as well as improves the efficiency and accuracy of the AP department. Automated AP platforms present a series of features.
84% of AP professionals say that automation has helped them significantly during the pandemic. *
The limitation with AP automation, however, is that finding the right fit can be challenging because most providers don’t automate all AP workflows (purchase orders, invoices, payments, and expenses). This is something you should keep in mind — otherwise, you could still end up managing some areas manually.
How can automation reduce AP burnout?
Well-being at the workplace is a two-way street. It’s just as important for individuals to take active steps for their own mental health as it is for employers to encourage and instill it through various practices. Automation can support this journey by providing the following benefits:
- Reduce hours spent on data entry
- Provide a digital audit trail for smooth audits and tracking
- Automate approvals and reminders to eliminate manual follow-ups
- Mobile-based expense submission for paperless expense management
- Multiple payment options for timely vendor payments
- Remote access to data and processes
Is it possible to avoid overtime?
Your plan to avoid overtime in accounting:
- Audit the most time-consuming tasks within each workflow and identify areas that need simplification.
- Invest in a smart tech stack to streamline daily tasks and save time and energy for creative thinking.
- Implement your technology strategically - where it’s most needed and where it’ll be used the most, whether that’s approvals, data entry, vendor payments, etc.
- Create a feedback loop when doing software research – invite users into the research and evaluation process and only invest in a solution if employees are comfortable with its interface.
- Provide mental health resources to promote well-being. This could be through access to wellbeing apps, or discounted tickets to outdoor places like a national park.
- Check-in with your employees more often – don’t just talk about work and the to-do list but check in with them about their mental health – how they’re doing, and what’s blocking their productivity.
- Embrace remote and hybrid flexibility. This ensures trust between the employees and employer and makes your firm more attractive to talent.
- Integrate cloud-based technology for smooth collaboration. Make it easy for teams to have instant access to basic information and processes.
Companies with engaged mployees are: 78% more profitable 40% more productive
*Download whitepaper for a full breakdown
