Controllers Council recently held an expert practices presentation titled, Building a Case to Bring Automation to Your AP Department, sponsored by AvidXchange.
Our subject matter experts were Rhonda Green, Principal Solutions Consultant at AvidXchange and Erika Waters, Senior Solutions Consultant at AvidXchange.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
Common AP Pain Points & the Benefits of Automation
Traditional paper-based AP processes can be time-consuming and reliant on repetitive manual work. This can be burdensome for businesses, causing inefficiencies like data entry errors, lost invoices, and late payments. These processes often require significant manual effort from AP staff, causing frustration and preventing them from focusing on more strategic activities that bring value to the organization. But what if we told you there’s another way to process accounts payable? Many organizations are shifting to a paperless AP process as part of their digital transformation efforts. With a paperless system, the AP process remains the same, but many tasks take place digitally.
The Benefits of AP Automation Software
- Increased efficiency
- Cost savings
- Enhanced accuracy
- Improved record-keeping and audit readiness
- Data and business intelligence for strategic decision-making
- Support for business growth
Tips to Evaluate if AP Automation Fits Your Business
What do you need to evaluate if you’re considering automating your AP?
1. Is AP Automation a Good Fit Based on Transaction Volume and Growth Forecast?
If your organization processes fewer than 100 invoices or payments per month, managing the workload may remain feasible. If your company is expecting growth, your accounting department may want to consider AP automation to manage the increasing workload.
2. Will AP Automation Change Our Accounting Processes?
Your AP automation software should only change the parts of your accounting process you want changed. The right tool will streamline tasks like data entry and invoicing while preserving control over routing and approvals.
3. How Will AP Automation Work with Our Current Accounting System?
Since not all solutions integrate with every accounting system or ERP, ensure compatibility early. Choose an AP automation solution that connects directly, either via an application programming interface (API) or file-based methods, to your existing systems.
4. How Will the Implementation Process Work?
AP automation implementation typically takes 30 to 45 days once you’ve chosen a solution. Some providers may offer dedicated experts for a full-service implementation and ongoing support to address any future issues.
Choosing the Right AP Automation Provider
If your team is ready for AP automation software and you’re shopping for a solution, consider these important elements when determining the best fit for your organization.
- Intelligent Technology: The best AP automation providers will constantly improve their solutions, incorporating the latest technology, like AI, to help businesses enhance productivity, reduce errors, and provide deeper insights into spending. Providers that embrace cutting-edge innovations help your organization stay competitive, optimizing processes and delivering long-term value with intelligent solutions.
- Accessibility: Cloud-based systems offer the flexibility of being accessible from any location or device with an internet connection. This allows authorized personnel to work on the go, which is ideal for today’s remote and mobile workforce.
- Customizable Workflows: Customizable workflows allow your business to align approval processes with your organizational structure and policies. This flexibility enhances efficiency and leaves room for change as the business grows and evolves.
- Data Validation: Data validation and invoice matching support accuracy by preventing errors in order processing. The most accurate automation tools support three-way matching between the PO, invoice, and order receipt. Automating these matches streamlines processes and saves time while helping confirm payments are error-free.
- Security and Compliance: Make sure your AP automation software protects confidential financial data with robust security features like encryption, access controls, and compliance with regional and worldwide data security regulations.
- Reporting and Analytics: Solutions equipped with built-in business intelligence features can help transform data into actionable insights, guiding financial decisions, highlighting areas for improvement, and tracking team performance.
- Cost and Pricing Model: Evaluate the pricing structure, including upfront costs, recurring fees, and any additional charges for extra users or features. Consider your budget and make sure there are no hidden costs.
Steps to Automate Your AP
The final step to building a business case to bring AP automation to your department is to understand the steps to automate your AP process. Here are nine steps to take to help make AP automation a reality in your organization:
- Build a Business Case: Gather data like invoice volume, average cost per invoice, and other AP metrics to build a strong business case for AP automation.
- Rally Support from Senior Management: Take your business case up the chain of command. AP managers, controllers, and CFOs are key leaders in the AP automation transition process. Demonstrating clear ROI will help get them onboard.
- Determine System Requirements: While some AP solutions offer strong automation out of the box, many companies need custom development.
- Choose a Software Provider: Identify AP automation providers and contact them to request a demonstration or software trial.
- Finalize the Details: Review the details of your contract to ensure adherence to your company’s policies.
- Conduct a Pilot Project: Once your contract is set, consider starting with a pilot project or proof- of-concept.
- Communicate with Internal Stakeholders: Strong communication with internal teams during planning and deployment can generate support and excitement for your automated AP system.
- Engage Suppliers: Gaining the maximum benefits from AP automation requires supplier cooperation. Remind vendors that upgrades benefit them too by reducing costs and speeding up payments.
- Launch, Monitor, and Optimize: After rolling out your automated AP system, evaluate performance to ensure continuous improvement.
Learn more about automating your AP, watch the full webinar here.
ABOUT THE SPONSOR:
AvidXchange is a leader in automating invoice, payment and Accounts Payable processes for mid-market organizations. AvidXchange processes more than $242 billion transactions annually, with 1,600 employees, 8,500 customers, and over 265 accounting system integrations. Learn more at www.AvidXchange.com
