Automating your Accounts Payable processes can save a company thousands of dollars a year and hundreds of hours by reducing the manual work it takes to process and validate transactions.
There’s no denying the impact of implementing an AP automation solution. Companies with automated AP processing have been able to take advantage of early payment discounts and avoid late payment fees. Studies have shown that the ongoing savings to an organization from automating AP processes can surpass 70 percent.
Successfully implementing an AP automation solution starts with selecting the right software. How do you know if you’ve made the right choice? Here are seven things to note as you vet potential solutions.
- Does it Conform to Your Business Rules?
Whether they’re written or not, your business operates in a particular way. And your AP department has its own procedures that support how your business runs.
The right AP automation solution should reflect how your team handles daily tasks. For example, if your AP team conducts a three-way match to any invoice received – based on the purchase order (PO) number and the receipt– before entering the information into your company’s enterprise resource planning (ERP) system, the AP software should be able to do that.
Instead of manually checking all the information listed on an invoice and flagging any discrepancies (e.g., a line item doesn’t match what’s listed on the PO or the receipt), then sending it to another person for review/approval before keying it into the ERP – that can take hours depending on your team’s size and workload – the software can achieve the same in a fraction of the time.
Choosing the wrong solution means missing out on efficiency gains and cost savings.
- How Well Does the Solution Integrate with Your ERP?
It’s all about how well your automation software communicates with your ERP system or systems (some companies have more than one ERP). With an AP automation solution, your AP team can search, retrieve and deliver vital information within your existing ERP – efficiently.
The Institute of Finance and Management recognizes the importance of having an automation solution that integrates with your ERP (or ERPs), as it not only makes the transition from paper to digital seamless, but also increases the visibility of an efficient AP function throughout the organization.
Choosing an automation solution with real-time ERP integration makes it possible to collect transaction data as soon as it is processed. What would normally take hours (depending on batches or cycles) to enter manually takes a fraction of the time. A solution that can’t do that is not be the right one for your business.
- Can You Normalize Units of Measure?
As much as you’d love to have everything on your purchase orders match, that doesn’t always happen. For example, a PO listed a 10,000-widget order as 10 boxes of 1,000 widgets; the invoice related to that PO, on the other hand, listed the order as 20 packs of 500 widgets each or another unit of measure.
While conducting a three-way match (your business rule), the automation software would flag the discrepancy as an error, even though both units of measurement reflect the same overall quantity (10,000 widgets). As part of your business process, the invoice would automatically be routed for review as an exception.
- How Does it Handle Special Charges?
Creating a voucher in for an invoice in your ERP requires codes for everything – that includes charges such as value-added taxes, county taxes, fuel surcharges, docking fees, etc. These special charges need to be coded before a voucher is complete.
For faster processing, your AP automation solution needs coding capability, so you can code special charges without having to log in to your ERP system.
- Who Performs a Part Number Cross-Reference?
Your part number is a different figure than your vendor’s part number. For whatever reason, you don’t use your ERP’s cross-reference function.
Not a problem. The right AP automation solution can make note of exceptions based on part number conversions and later automatically do a cross-reference check the next time it finds a discrepancy on an invoice.
- What if You’re Working Out of the Office?
Your employees are always on the go and may not necessarily have access to your ERP. Or worse, a major disruption happens (like a pandemic or a natural disaster) and everyone finds themselves working remotely.
With the right AP automation software, completing time-sensitive tasks, such as invoice approvals and general ledger coding, can be done directly from a smartphone or tablet.
- Is it Worth the Investment?
Some customers have realized gains in productivity and efficiency, among other things, from automating their AP process. One IntelliChief customer found that automating their AP processes was an integral part of its growth. Not only did the customer see a significant reduction in resource time and cost, but also played a role in ensuring the organization met its objectives related to increasing market share.
Ultimately, the answer to that question comes down to what you’d like to achieve by automating your AP function. The right AP automation software solution should demonstrate measurable results that you can see. IntelliChief’s savings calculator can help you determine efficiency and cost savings from automating your processes.