Making the AP Automation Business Case to Upper Management
Anyone who’s worked in or managed an accounts payable (AP) department might have had an “Ah ha!” moment at some point with AP automation.
After all, AP automation can relieve many accounts payable pain points like cumbersome invoice data entry, duplicate payments, and clunky approval processes. Getting upper management to see the need for AP automation can be another story, though. In fact, lack of executive buy-in is a big reason companies pass on AP automation.
For anyone eager to change this, we’ll show how to make an AP automation business case so convincing any decision maker can see the value.
3 Reasons the C-Suite Resists AP Automation
A 2021 survey report Stampli collaborated on with Treasury Webinars, “The How, the Why and the ROI of Automation” asked why companies hadn’t invested in AP automation. Among the top three reasons were the assumption that a company’s current processes were working “fine,” there wasn’t budget allocated, and the fear that the company’s AP process would be too complex to automate. Tied for the fourth-most popular response – and arguably representing the biggest hurdle – was lack of executive support.
Generally speaking, upper-management buy-in isn’t something that can be skirted around. Company higher-ups matter for getting an AP automation project off the ground. Stampli and Treasury Webinars found in their recent report that CFOs, Controllers, and Treasury leaders all made AP automation implementation decisions at least 15% of times.
So why is this crowd hard to impress sometimes and why do they require a good AP automation business case? Consider the following:
1. A Belief that Current Processes Work Fine
By far the most common reason why companies hadn’t invested in AP automation, according to 44% of respondents in Stampli and Treasury Webinars’ survey, was their belief that current processes worked well.
Certainly, executives may get this impression due to scanning metrics without context, for example maybe their best AP specialist hasn’t missed an early payment discount deadline in two years. Or perhaps when upper management visits accounting, they see staff feverishly entering invoice data or huddled together discussing how they’ll find an elusive paper purchase order to match with an invoice and receipt report. After all, a flurry of activity must indicate productivity, right?
A belief that current processes work fine can also be a rationalization by veteran executives who don’t want another nightmare implementation. Ten or 20 years ago, creating an accounting system could mean building one on-premises over the course of months, even years, with no guarantees it would ever work properly. Thus, “fine for now” becomes “fine for forever” to avoid having to face change.
But AP automation providers like Stampli who deliver software as a solution (SaaS) products have made lengthy deployments a thing of the past (their setup averages less than 24 hrs) – but that’s not always obvious to management without a strong AP automation business case.
2. Worries Over Budget (or AP Automation’s Perceived Cost)
The next most-popular reason companies weren’t investing in AP automation, according to Stampli and Treasury Webinars’ study, was insufficient budget, cited by 28% of respondents.
Even in the best of times, executives might stress over what they think AP automation might cost these days. Again, the on-premises accounting system builds of yore weren’t cheap, especially factoring in staff time and ongoing costs for IT support. Even if a company hasn’t had this experience, they might know a firm that’s been through the wringer.
Still, as we’ll discuss later, budgetary fears can be misplaced, with cloud computing making affordability easier than ever to show in one’s AP automation business case.
3. Concerns Over AP Process Complexity
Fears that a company’s AP process is too complex was the third most-popular reason cited in Stampli and Treasury Webinars’ study for avoiding automation.
Management might see all of the current AP process nuances and conclude automation can’t possibly be deployed effectively. Or the C-suite might be skeptical AP automation can do everything it’s touted to, with executives wondering how complex of workflows the AI and machine learning components of the software can really handle.
A hallmark of an AP automation business case, though, is that a good system is equipped to run effectively no matter the current processes and policies – no matter how simple or complex. What’s more, it can quickly help to optimize them.
AP Automation Benefits to Show Upper Management
It can be easy for upper management to resist AP automation, for any number of reasons, same as with many good ideas in business. The good news for those wanting to make an AP automation business case is it’s not hard to show value to company management.
Here are a few benefits you should highlight when making the business case.
Automating AP Saves Time and Money for Invoice Processing
A study that Stampli conducted with AP Now, “Common Invoice Problems: How to Deal with Them” cited one particularly glaring metric: 72% of survey respondents had a problem getting invoices approved in a timely manner for B2B payments.
In short, manual invoice approval can drag and drag. Invoice approvers might be out of the office. Three-way document matching by hand – usually in the form of scouring file cabinets for paper copies of invoices, purchase orders, and receipt reports – can be nightmarish, if not impossible. And invoice exceptions easily fixed by AI, such as Stampli’s bot Billy, instead linger uncorrected.
AP automation software is designed to alleviate common invoice issues and speed the process. The AI built into the software can automatically route invoices directly to invoice approvers, perform three-way matching, and resolve many basic invoice exceptions. In all, AP automation can save as many as 19 hours per week for companies.
In the most basic sense, this means financial savings. With bookkeeping, auditing, and accounting clerks earning a median rate of $20.39 per hour in 2020, according to the U.S. Bureau of Labor Statistics, this suggests possible savings with AP automation of $387.41 per week, or around $20,000 annually. For companies that process a substantial number of invoices, the savings can be higher, too.
From a more strategic angle, 19 hrs per week represents an enormous opportunity for AP to fill the role of a more strategic partner, spending the hours gained on high-value activities and strategic thinking.
Savings from Early Payment Discounts Can Quickly Add Up
Early payment discounts, often 1% to 3% from vendors “represent a goldmine,” as Stampli and AP Now noted in their study. Still, these discounts often prove elusive, with 23% of respondents in the study admitting that one of the invoice issues they experienced regularly was missing early payment discount timing.
Arguably one of the strong AP automation business cases is that it makes early payment discounts a lot easier to collect, for multiple reasons. Aside from dramatically speeding invoice processing, the software has automatic reminders whenever a deadline looms. The software can also be used in an effort to flag invoices and move them to the fast track for processing.
AP Automation (with AI) can Detect Exceptions and Fraud Better than Humans
One common scourge for accounts payable: Invoice exceptions, whether they’re numbers transposed by optical character recognition (OCR) invoice scanning software or a missing field of critical data. AP automation software can help with this and it’s no surprise that in Stampli’s study with Treasury Webinars, 27% of companies said one of their reasons for investing in AP automation was a high percentage of exceptions. Exceptions waste a lot of staff time when they must be dealt with, even pulling in upper management at times.
That said, it’s important that the automation include AI and machine learning components, which can automatically and accurately process data. One tech executive broke it down for PYMNTS.com, telling the website, “It all boils down to the ability to actually know what to do from existing information that is readily available and to relay all the right rules to create shortcuts and minimize human intervention on the AP team.”
How Stampli Can Help Get Your Management Onboard with AP Automation
Has upper management been slow to get onboard the AP automation train? Don’t worry, we’re happy to help anyone make a solid AP automation business case.
Here are some of Stampli’s advantages that can help win over company higher ups.
Quick, Affordable, and Easy Implementation, Including with Your ERP
Nothing obliterates all the cost and time savings possibilities of AP automation like arduous deployment of the software.
Maybe the implementation takes months and customer support that was so attentive during the sales process quickly turns to indifference. Maybe the software isn’t quite so affordable as it seemed at first glance. Or maybe it only works with certain enterprise resource planning (ERP) systems, an expensive enough investment in itself and one that any C-suite executive likely would have been involved in.
With Stampli, we’re mindful of all of this. First of all, upper management won’t need to stress about system fulfillment taking months. Through the magic of SaaS and Stampli’s tried and true expertise, we can have functional systems running in days, not months. Price-wise, we’re great for mid-size companies, even small companies if they process enough invoices. Stampli can also work with pretty much any major ERP system, including Oracle, Oracle NetSuite, Microsoft Dynamics 365, Microsoft Dynamics GP, Sage 100, Sage Intacct, SAP, and many more ERP accounting systems here.
An Intuitive and Easy to Use AP Automation Platform
Some companies have software that’s automation pretty much in name only. Sure, it might have something resembling (or hyped up as) workflow automation when a user logs in. But it might as well come with a computer programmer who can code in the different rule-based logic to make the automation workable.
Suffice it to say, this is not how Stampli operates. We put an emphasis on ease-of-use for everyone (purchasers and controllers alike) ensuring that anyone can quickly learn to use it. That’s just one of the reasons Stampli is great for the sort of collaboration accounts payable work so often lends itself to.
Stampli’s software is also approachable for C-suite executives, giving them a clean management overview of invoice activities and trends, and allowing them to get a peek into their AP as needed.
A Scalable Solution, Continue to Do More With Less as You Grow
As we noted earlier, Stampli is ideal for mid-sized companies and smaller firms that process a large volume of invoices in a given month. That said, we’re also built to scale and grow with companies as they progress to the enterprise level.
Perhaps the best AP automation business case we can offer is that we’re built for the long haul with the companies we work with.
We’ll help you make the AP automation business case to your most skeptical executive. Try Stampli today.
