How to Keep Your AP Automation Project from Going Sideways

#1 Benefit of AP Automation: Cost Reduction

Automating AP vendor invoice processing can lead to substantial cost savings. By eliminating manual data entry, reducing errors, and automating common AP workflows, companies can reduce labor costs, minimize processing delays, and mitigate the risk of late payment penalties or duplicate payments.

#2 Benefit of AP Automation: Efficiency and Productivity

AP automation enhances operational efficiency by accelerating invoice approval and payment processes. With automating common AP workflows and intelligent document recognition capabilities, invoices can be quickly routed to the appropriate stakeholders, reducing bottlenecks and speeding up the overall cycle time. This efficiency from automated AP boost allows staff to focus on more strategic and value-added tasks, improving productivity across the organization.

#3 Benefit of AP Automation: Control and Visibility

Manual invoice processing often lacks visibility and control, making it challenging to track invoices, monitor payment status, and ensure compliance with internal policies and regulatory requirements. Accounts payable automation provides real-time visibility into the entire invoice lifecycle, enabling stakeholders to track invoices, verify data accuracy, and enforce necessary approvals.

This enhanced control and visibility from accounts payable automation empower organizations to make informed decisions, improve financial forecasting, and strengthen supplier relationships.

#4 Benefit of AP Automation: Process Optimization

Automated AP vendor invoice processing streamlines and standardizes workflows, reducing process complexities and eliminating manual errors. By leveraging technologies like optical character recognition (OCR) and machine learning, invoice data can be accurately extracted, validated, and matched with corresponding purchase orders or contracts.

This streamlined accounts payables automation process optimizes accuracy, reduces discrepancies, and enhances overall process efficiency.

#5 Benefit of AP Automation: Compliance and Audibility

Automated common AP systems ensure compliance with financial regulations and internal policies by enforcing standardized processes, proper segregation of duties, and audit trails. With detailed transaction records and electronic documentation, organizations can easily demonstrate compliance during audits and efficiently respond to compliance-related inquiries.

In conclusion, automating AP vendor invoice processing offers companies a cost-effective and low-risk opportunity to transform their back-office operations. By harnessing AP automation software, businesses can achieve cost reduction, process optimization, compliance, and enhanced audibility without requiring extensive system overhauls.

Embracing AP automation in the back office sets the stage for increased efficiency, better financial management, and improved overall business performance.

That doesn’t mean that these types of projects are fool-proof, however. To keep your project on time, and within budget, with demonstrable cost savings and efficiency gains, we’ve compiled key insights and best practices to help avoid common pitfalls on your way to an automated future for your AP vendor invoices.

#1 Pitfall: A Lack of Understanding of Your Current AP Invoice Costs

The old Peter Drucker adage, «You can’t manage what you can’t measure,» remains highly relevant in the context of accounts payable processes. It emphasizes the importance of clearly understanding and measuring key metrics to manage and improve these processes effectively.

Before presenting industry statistics on return on investment (ROI) for AP automation or including ROI projections in your business case, conducting a thorough analysis and evaluation of your current processes and the associated costs and efforts involved is essential.

By meticulously evaluating your existing accounts payable processes, you can gain valuable insights that will inform your automation and optimization strategies. Here are some critical steps to consider:

• Assess Current Processes: Examine your accounts payable processes from end to end, documenting each step and identifying pain points, inefficiencies, and areas that require improvement. This analysis will be the foundation for future benchmarking and improvement efforts.
• Identify Key Metrics: Determine the critical metrics that will enable you to measure the performance and effectiveness of your accounts payable processes. These metrics may include processing time, error rates, invoice cycle time, cost per invoice processed, and early payment discounts captured.
• Calculate Potential ROI: Using the insights gathered from your process assessment, calculate the potential return on investment that can be achieved through account payable automation and optimization. Consider factors such as time savings, reduced errors and rework, improved cash flow management, and increased supplier discounts. These calculations will help you build a compelling business case and demonstrate the financial benefits of your proposed initiatives.
• Identify AP Automation Opportunities: Based on your process assessment, identify specific areas within your accounts payable processes that can be automated or optimized. This AP automation improvement may involve implementing invoice scanning and data extraction technologies, automated workflow routing, electronic approvals, and integration with ERP systems or financial platforms.
• Continuously Improve and Optimize: Once you have implemented automated AP processes and optimization initiatives, monitor and measure the impact on the identified metrics. Regularly review and analyze the results to identify further areas for improvement and refine your processes. You can continually seek new efficiencies through AP automation and process optimization to drive ongoing improvements in your accounts payable operations.

In conclusion, the quote by Peter Drucker serves as a valuable reminder of the importance of measurement in managing accounts payable automation processes. You can unlock new efficiencies and continually improve your accounts payable operations by comprehensively analyzing your current processes, establishing benchmarks, and leveraging automation and optimization strategies.

This proactive approach will enable you to manage and measure your processes effectively, leading to enhanced financial control, cost savings, and improved overall performance.

Pitfall 2: A Lack of Understanding of the Vendor’s Side of the Equation

While examining existing processes, it is crucial to consider the vendor’s experience and explore opportunities to encourage their participation in your new process. This can be achieved by implementing changes to their processes or by offering new incentives that motivate them to align with your objectives.

By engaging vendors in these ways, you can foster a collaborative approach that promotes smoother workflows and enhances the overall efficiency of the accounts payable automation process.

Pitfall 3: Ignoring Security, Compliance and Auditability

While efficiency is a primary focus when considering AP automation, it is essential for companies to recognize the broader benefits that automation brings. In addition to streamlining and accelerating the process until the point of payment, accounts payable automation also plays a crucial role in standardizing processes and enhancing process visibility from start to finish.

By implementing automation solutions, companies gain the ability to trace the entire workflow, not just in a forward direction but also backward, enabling them to identify and rectify errors, exceptions, and potential compliance risks.

This comprehensive visibility ensures greater accuracy, reduces the likelihood of unnoticed errors, and enhances compliance with regulatory requirements. By leveraging automation to achieve end-to-end process visibility, companies can establish a robust foundation for efficient and compliant accounts payable operations.

Pitfall 4: Failing to Identify a Complete Solution

When considering common AP automation software solutions, companies should prioritize efficiency while recognizing the wide-ranging benefits that automation offers. While streamlining and expediting the payment process are crucial aspects, it is equally important to acknowledge the broader impact of automation on standardizing procedures and enhancing end-to-end process visibility.

By embracing AP automation solutions, companies empower themselves with the capability to trace the entire workflow, both forward and backward, facilitating the identification and resolution of errors, exceptions, and potential compliance risks. This comprehensive visibility ensures greater accuracy, reduces the chances of unnoticed errors, and enhances overall adherence to regulatory requirements.

By harnessing the power of AP automation to achieve comprehensive process visibility, companies establish a robust foundation for efficient and compliant accounts payable operations, setting the stage for optimized financial management and enhanced decision-making capabilities.

Take the Next Step

Companies of all sizes across industries are embracing automation for back-office processes. If you’re ready to explore AP automation for your organization, take the next step and contact Artsyl for a demonstration of InvoiceAction.

FAQ

What is AP automation?

Accounts payable automation refers to using technology and software solutions to streamline and automate the accounts payable process, including invoice processing, vendor management, payment approvals, and reporting.

What are the benefits of AP automation?

Accounts payable automation offers numerous benefits, including increased efficiency, reduce manual errors, faster processing times, improved cost control, enhanced visibility and transparency, better compliance and auditability, and the ability to capture early payment discounts.

How does AP automation improve efficiency?

Automating accounts payable eliminates manual, paper-based tasks and replaces them with automated workflows, electronic invoice processing, and digital approval processes. This reduces the time and effort required for data entry, document handling, and manual reconciliation, leading to significant time and cost savings.

Can AP automation integrate with existing accounting systems?

Yes, common AP automation sofwares are designed to integrate seamlessly with existing accounting systems, such as ERP (Enterprise Resource Planning) software. This allows for a smooth data transfer and ensures that AP automation works harmoniously with your current financial infrastructure.

Is AP automation suitable for businesses of all sizes?

Yes, AP automation can benefit businesses of all sizes. Whether you are a small business or a large enterprise, automated accounts payable can streamline your accounts payable processes, reduce manual labor, and improve overall financial management.

Is AP automation secure?

Yes, accounting automation solutions prioritize data security. They employ encryption, secure data storage, and user access controls and comply with industry-standard security protocols to protect sensitive financial information.

Can AP automation help with compliance and auditing?

Absolutely. Automating accounts payable provides a comprehensive audit trail, ensuring that all transactions are accurately recorded and easily accessible. This simplifies auditing and helps businesses comply with regulatory requirements and internal policies.

How long does it take to implement AP automation?

The implementation time for automating your accounts payable varies depending on the complexity of your existing processes and the chosen solution. However, with the help of experienced implementation teams, businesses can typically expect a relatively smooth and efficient transition within a few weeks to a few months.

Can AP automation software be customized to meet specific business needs?

Yes, account payable automation software can be customized to align with your unique business requirements. This includes tailoring workflows, approval processes, and reporting capabilities to match your existing workflows and preferences.

What kind of ROI can be expected from AP automation?

Automating AP can yield significant ROI. By reducing manual labor, eliminating errors, and improving process efficiency, businesses can save costs, capture early payment discounts, and free up staff to focus on more value-added tasks. The exact ROI will depend on factors such as the organization’s size, the volume of invoices processed, and the specific account payable automation solution implemented.