With the tumult of recent times, the limitations of manual accounts payable processes have been brought into sharp relief: payment times have lengthened, the supply chain has been disrupted, duplicate and fraudulent invoices have been paid at higher rates, and costs have gone up.
As a result, the pandemic has accelerated AP automation around the world. Yet some organisations risk being left behind as they hold onto misconceptions. Here are three common ones and our response to them:
1. “It’s too expensive”
As with any enterprise software deployment, there are implementation and licensing costs involved with an AP automation solution. However, with a cloud infrastructure, some of this cost is on a usage basis, reducing the initial outlay.
It’s worth remembering though that AP automation is an investment, so while there is an upfront cost, the savings and efficiency dividends the solution delivers can make the pay-back period very short. Typically, the savings versus manual handling are so significant that a return on investment can be realised in just a year or two.
On average, an accounts payable solution will reduce an organisation’s cost of processing by over 80%. It achieves this by significantly reducing manual labour and ensuring invoices are processed with speed, accuracy, and compliance. This means:
• Early-bird discounts can be maximised,
• No penalty late fees are charged,
• No duplicate or fraudulent invoices are paid, and
• Supplier and customer relationships are upheld.
What’s more, accounts payable staff have capacity to take on higher value work, such as analysing company spend, identifying savings opportunities, improving the accounts payable process, and advising on effective cash flow management. All these factors can work together to help boost profitability.
2. “Our business is too complex”
Firms with complex business requirements often process a heavy volume of invoices and benefit most of all from replacing ineffective, cumbersome manual workflows. A specialist AP automation solution can:
• Capture data,
• Run compliance checks,
• Match invoices with purchase orders and receipts,
• Route invoices for approval,
• Provide visibility across the invoice process lifecycle,
• Manage exceptions, and
• Integrate with the Enterprise Resource Planning (ERP) system.
While manual workflows have multiple touchpoints making processes complex, an AP automation provider will help you streamline your invoice approval processes ahead of deployment. The software vendor will ensure that your workflows are not only as efficient as possible, but fulfil your internal compliance needs and achieve the highest possible rate of straight-through processing.
While a firm’s accounts payable needs may indeed be too complex for an ERP’s generic invoice processing module, a specialist accounts payable solution is designed to accommodate intricate business requirements as well as new ones that emerge with each deployment. Its deep accounts payable expertise and commitment to continuous improvement cannot be equalled by an ERP.
Further, an AP automation solution can receive data from multiple sources and channel them into a single processing workflow. Therefore, firms do not need to deploy multiple automation solutions. As businesses increasingly connect their software to the PEPPOL network for e-invoicing, having a solution that can handle PEPPOL e-invoices as well as paper and emailed invoices is extremely beneficial. This improves efficiency, while helping to maintain strong supplier relationships.
3. “Deployment is too time-consuming”
It’s important to dedicate some time to the deployment process, particularly the business requirements gathering work. This ensures the solution meets everyone’s needs and delivers on its stated goals.
It’s often preferable to have an external party lead the business requirements workshops. This would typically be a software vendor or a consultant with extensive experience in procure-to-pay automation. They would carry out this work in the most thorough and time-efficient way, advising on how to streamline workflows and achieve best practice results.
For a quick implementation, look for a vendor that offers a highly configurable out-the-box solution. AP automation is widely used technology so it’s most cost-effective to leverage what’s already on the market rather than build a customised solution. Typically, an off-the-shelf product will cater for over 90% of a company’s needs and will require less building, system integration testing, user acceptance testing and support than a custom-built solution. This means less disruption to the business and a quicker return on investment.
For a smooth, speedy implementation, work with a highly experienced AP automation software vendor; in this case, systems integration may only take a day or two, and deployment may be less than three months from scoping sign off to go live.
AP automation saves organisations time and money over the long run. Disruption to the business is short term and relatively minimal when the solution is deployed by an experienced AP automation vendor. The more complex or larger the organisation, the greater the need – and the upside – of automating accounts payable.
Watch this space for more AP automation myth busting to come!