Payments are tough!

Blog article | April 14 2023

Payments are a headache

Payments are a headache for organisations, even those with advanced purchasing and ERP systems. In the modern age of high-volume procurement, consolidated businesses with centralised payment functions, it is simply impossible for human cognition to bear this onerous task, no matter how many humans are put to work on it. Machines can actually make this challenge worse if they are not deployed properly. For example, suppliers may be fully digitalised and incredibly efficient at blasting invoices into this manual process, making the task even more challenging and stressful for accounts payable personnel.

We humans perform poorly when stressed and frustrated, just as a champion goal-kicker may achieve 100% accuracy at her local football field, but miss a goal on game-day from right in front of the posts. Why? Because there are 25,000 people watching, and championship success riding on this one game – that’s a lot of pressure

Users’ insights: Payments without automation

Invoice coding:
One junior AP clerk says ‘an invoice arrives, 426x C-type model AE1127 gasket, B&W 8L28-36 aux generator. I search for the proper code in the spreadsheets and catalogues but it’s not there. I ask a buyer, they don’t know, I asked the procurement manager, they ask me why I don’t know this and
that it’s part of my job – it’s a big problem and takes a lot of time, and there are hundreds of these every day.’

Approval delays:
A purchaser says ‘our procurement system is great, but the bottleneck is approvals and variations. Most of the time the invoices just get approved, but when there are even minor variations, no one wants to make a decision on it. We are all bound by such strict governance that we cannot make a single wrong move even if it’s needed to keep ships moving, like supplying provisions for crew. It’s not the approver’s fault, or even the supplier’s, it’s just a failure of the process,’

P.O. matching:
A CFO says ‘we want as many of our purchases as possible to be on PO basis, it helps hold our suppliers to account and it’s better for governance, but if
humans are conducting this process it takes a long time and even the sharpest-eyed humans miss things, then payments are wrong or products are mis delivered and it’s a butterfly-effect of problems and time-wasting. We have great people who are smart & committed, but this process is not the best use of their time.’

Mechano-Sapien Collaboration

Change management is a key part of our implementation projects. The technical part is usually fairly straight forward, the difficult part comes with human behaviour where users are afraid of our software (or any automation) threatening their jobs. To address this, I’ll share a story from our own team. One of our Solution Developers cheekily said “I’m designing a bot to work with Chat GPT so it can do my job in a way that neither you or our customers will notice that it isn’t me … and then I’ll go to the beach and drink cocktails.” In response, another colleague joked that our esteemed boss is too clever for that, and will surely notice, and you’ll get fired. I responded “Fired? No. Promoted and put in charge of our organisation-wide innovation? Yes.” I added that he’ll be drinking cocktails on the beach alright… in Malta, when he retires at age 40.

Humans can perform better and are much more useful to a company when a machine is taking away the mundane, stressful and repetitive parts of their job

Humans can perform better and are much more useful to a company when a machine is taking away the mundane, stressful and repetitive parts of their job. For example, say a procurement manager is using one supplier who is treating them poorly, and is looking to replace them with a suite of seven suppliers. At the moment this would put too much administrative strain on his team, because they are all so used to one supplier’s way of working, and they would have to now handle seven different suppliers, including seven invoice formats and intricacies. However, with automation in place, using the seven new suppliers would only place a small amount of extra work for the team, and they could focus on making better buying decisions, aiding the procurement manager in developing better strategies, and working together to run the ships more efficiently, and the company more profitably.

Customers’ top management benefit even more from payment automation than the users themselves. Previously relaying on weekly or monthly reports to gauge the business’ health, managers can now draw insights directly from the real-time flow of invoice information. Instead of calling people and asking them for details (thus interrupting their valueproducing work), they can click on ‘reports’ and see exactly how long an approver is taking to approve payments, how much a company is spending with certain suppliers, and how many invoices are being processed automatically. I’ll close by busting a myth that surprises our customers: Implementing automation is considerably easier than people think.

Customers are used to major ERP implementations which take months and cost 6-figure sums, but in the cloud-computing era this is different. Users don’t actually ‘use’ payment automation software that much, rather they set up the configurations, monitor over time while the AI is undergoing training, then it’s largely a hands-off experience. One customer said, “I was concerned about having to use an extra system… until I realised that your system takes care of itself, and it has helped us reduce clicks and keystrokes in other systems.” Well, we hope customers say that otherwise we wouldn’t be doing a very good job. To summarise, payment automation saves a lot of headaches for maritime enterprises, it’s easier to implement than people think, the benefits stretch wider than people expect, and it allows humans to do what they are best at – leaving the mundane and potentially stressful manual work to the machines… who don’t get stressed or bored!