What are companies’ most valuable assets? Is it the machinery and materials (tangibles) used to produce products, or the people, ideas and tasks (intangibles) that drive business value? Over the past few decades, the answer has shifted, with intangible assets generating 85% of business value, according to a recent CFO article. The article’s author, William Heitman, argues that executives – calling out CFOs in particular – need to learn to optimize the performance of these assets versus simply trying to minimize the costs used to employ them. His position perfectly underscores the best way to approach compliance with strict government e-invoicing and e-accounting mandates.
Specifically, Heitman reports that “workers squander an average of 40% of their typical work day performing avoidable tasks, such as error correction, rework and over-service,” according to CFO research. The example he cites? Invoicing, of course! He tells a story of 2,600 staff members dedicated to the manual reconciliation of invoices for a global manufacturer, showing the inefficiencies and inconveniences incurred.
It’s not uncommon to see similar inefficiencies in Latin American compliance – staff re-entering the unique identifying codes specific to each e-invoice; others manually entering invoice data into accounting reports; inbound receiving personnel manually entering shipment data. But it doesn’t have to be this way. Latin America, in particular, is ripe for the proactive management of intangible assets that Heitman argues for in order to increase productivity and keep workers focused on innovation and tasks that truly add business value.
The standardization and electronic processes prevalent in Latin America make it easy to automate certain tasks. For example:
- Invoice data can be pulled directly from the government-approved XML into a company’s ERP, eliminating the need for manual data entry.
- That information can then be automatically imported into journal entries and accounting reports.
- Since invoices must accompany shipments in many countries, inbound receiving can be turned into a simple scan-and-click process.
- Leveraging the cloud, compliance solutions can automatically be updated to comply with ever-changing legislation, minimizing IT’s involvement.
Automation of these tedious and time-consuming tasks has several benefits, including reducing the risk of errors and resulting fines and penalties. But as it related to intangible assets, the biggest benefit comes in the form of optimizing human capital. Critical staffing resources can dedicate time to managing exceptions, innovation and critical business processes – ultimately driving greater business value. For more information, see how Philips was able to reduce maintenance costs by 80% by implementing electronic processes