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The Four Stages of Accounts Payable Evolution

Automation Promises to Revolutionize the Way Companies do Business

April 19, 2017

While accounts payable automation promises to revolutionize the way companies do business and transform AP from a cost center to a strategic asset, the path for most companies to achieving streamlined, process automation is more evolutionary than revolutionary.

This is true even once AP automation has been implemented. In reality, this is where the hard work begins—the work that differentiates truly successful AP Automation initiatives from those with middling or poor results.

With automation in place, the way in which successful companies evolve to embrace new systems and processes often follows four stages:

Stage 1: Building and formalizing internal competence. When it comes to adopting and embracing new technologies, companies have to learn to walk before they can run. Aligning the AP, establishing and tracking the right metrics and focusing on continuous process improvement define the first stages of a successful implementation.

Acquiring new skills to adapt to automated processes may require a team’s culture to evolve as part of the process. As in many cases, it’s this human factor that often gets over-looked when considering the obstacles to success. Making sure to get buy-in from stakeholders at all levels, keeping them engaged and empowered is often key at this early stage to get the team thinking less but the way things have always been done and embracing the best way to achieve common goals.

Stage 2: Living by the rules. Once the AP department has confidence in new systems and processes, the company can begin to realize a return in investment, benefitting from efficiency gains and process visibility and control. NOW is the time to look at new business rules or process improvements to drive even greater efficiency and boost KPIs

Stage 3: Straight Through Processes automate each step of a process, creating a seamless system that is reliable and repeatable each step of the way. This is the stage at which departments and their staff let go of manual steps in a process that often remain until enough confidence has been gained by the automated portions of a process and any technical hurdles have been addressed to deliver integration among various systems.

This stage also involves continuing to tighten the rules, optimize AP processes and modify workflows based on feedback, and from the business and learning.

Stage 4: Fine Tuning and Ongoing Optimization. In the final stage, companies have achieved fully automated processes, with access to KPIs that allow them to continually monitor and improve. At this stage, companies consolidate changes from stakeholders, share successes and set new targets for improving AP performance—or share their knowledge with other departments and broaden the reach of innovation within the organization.

To learn more about how to plan and implement a successful AP Automation process, read our 3-part series on defining and implementing a successful automation initiative.

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