Businesses are increasingly relying on digital business solutions, including Accounts Payable Automation (AP Automation). It is easy to see why — the average business can save as much as $26.50 per invoice by switching to AP Automation.
However, there are a variety of solutions on the market, so how do you know which is the right solution for your business — both now and in the future?
Preparing for the Switch to AP Automation
Here’s the thing — there’s not a one-size-fits-all solution for AP Automation. Each organization approaches AP differently, so you need to focus on finding a solution that is going to fit into your accounts payable process, not fit your accounts payable process into a solution.
All the major Accounts Payable Automation platforms have different strengths and are not all designed the same. An elite few work any approval process and can flex to process changes or handle exceptions.
Others may force you into an approval matrix-only system which doesn’t consider when someone is sick, on leave, or left the company. Moreover, keep an eye on solutions where AP Automation is an add-on feature while they’re really a payment solution first. So with whatever accounts payable system you choose, make sure the solution offers payment flexibility if AP Automation is second to their primary payment offering.
That is why selecting the right AP Automation software starts with outlining the needs and requirements of your business.
Map Your AP Invoice Process
What does your current Accounts Payable invoice process look like? For example, what does your current invoice data capture process look like? What works in your current AP process, and what doesn’t? Outline your current AP processes, from how invoices arrive, to how they are coded, approved and processed for payment. How many people are involved and at what points? What segregation of duties do you have in place and are there any conflicting responsibilities? Once you have the process mapped, you will be in a better position to determine what the right accounts payable solution needs to offer.
Outline Your AP Automation Goals
Next, outline your main goals for the new invoice approval process. Are you hoping to eliminate manual data entry? Gain visibility into your current liabilities? Increase accountability or improve vendor relations? Put your goals in writing so you can refer back to them when comparing solutions.
Factors to Consider When Choosing the Right AP Automation Software
Choosing the right AP automation software solution requires careful planning and consideration. But which factors are most critical? When comparing solutions, consider the following factors carefully, and be sure to weigh the pros and cons to find the solution that fits your needs best.
Ease of Use and Customized User Views
With unique user views, people see only the information they need to take their action in the process. This makes it easier to use and speeds up the process. If everyone has the same view, it can be overwhelming and cumbersome to navigate for some parts of the process (like approvals).
When comparing solutions, pay close attention to how easy the software is to use for each type of user. Moreover, they AP system needs to be customized to what their role is in the process. The solution should speak the language of at least three different groups of AP Automation user roles listed below.
- Invoice Approvers — Need a simple and easy to use interface where they can ask and answer questions, and approve invoices. This group makes up 96% of Accounts Payable Automation users since the AP department doesn’t outnumber the number of invoice approvers throughout an organization.
- Advanced Users — Make up most of the remaining 4% of users. They often have one or multiple permissions where they can edit invoice fields, cancel/recall invoices, revise approvers, and/or refer an invoice for payment. Additional roles include vendor managers, system admins, and management overview features.
- Management Overview — Provides reporting dashboards and enables users to gain access to reports for invoice processing, payment forecasts, and user activities among other metrics.
While a slight learning curve is to be expected from anything new, a platform that doesn’t speak the language of each kind of user will have a lower adoption rate. Additionally, consider whether the platform will require programming skills or help from IT.
Compare Pricing Carefully
Most AP automation platforms charge based on a monthly subscription service which can be month-to-month or an annual plan. However, when comparing prices, look for less obvious costs. The cheapest plan might have limited features or only permit you to process a certain number of invoices each month. There are additional costs which come in form of a platforms payment options.
As previously mentioned, watch for providers which offer payments and force the invoice approval process to only work with their specific payment offering. These solutions try to lock-in an entire organization over AP invoice processing since the later makes up 96% of users. Thus, making it harder to switch solutions at the cost of re-training an entire organization—over trying to switch payment options. Therefore, ensure the solution is payment agnostic meaning if they offer payments with AP Automation, that you can process invoices with the AP solution and use ANY method of payment you prefer.
Additionally, consider support and development requirements, as these may add additional costs not included in the monthly subscription costs. Technology upgrades should also be accounted for.
Pay Attention to Fraud Prevention Features
In addition, some platforms may offer fraud protection features. For example, Stampli will notify the AP department when a vendor makes a change to their Vendor Portal account. Depending on the level of visibility and customization you want to leave your vendors with, the Stampli Vendor Portal offers a secure place for vendors to view invoice or bill status without seeing any sensitive information. Furthermore, you can customize what vendors can and cannot do so your business is always in control. Some businesses opt to let their vendors submit address updates which will notify AP to review and verify among other features.
Consider Accounting System Integrations
Often times, Enterprise Resource Planning (ERP) or accounting systems are chosen on the specific industry you are in and therefore, the AP Automation solution you decide on should work with both your specific systems in place and your invoice approval workflows. Also consider API integrations for cloud ERPs, file integrations and solutions for other financial systems. More importantly, does the system have the flexibility to change accounting systems or ERPs down the road when your company scales?
Outline Support Requirements
How much involvement will your suppliers need to have with your new system? Will you need internal IT support to implement and how much support will be required? If not, does the platform you are considering provide the required support, and are there additional costs associated with that additional support? For example, Accounts Payable automation platforms like Stampli offer unlimited support and hand-holding to all AP Automation customers.
What Problems Does AP Automation Solve?
Earlier, we covered the importance of understanding your business needs before comparing platforms. This is because there are a variety of features available — some that may be critical to your business process. Here are a few problems you may be struggling with and which AP automation features you should look for:
Problem #1: Approvals take too long
Features to look for:
- Centralized communication, which allows real-time collaboration and payment approvals on top of the invoice
- Automated reminders
- Easier to use approver interface
- Ability to approve invoices from anywhere at any time (including mobile)
Problem #2: Your business wastes too much time on data entry and sourcing support documentation
Features to look for:
- PDF invoice capture capabilities
- Artificial Intelligence that learns your General Ledger (GL) coding and approval workflows
- Data extraction and matching to your GL coding
- Easy access and storage of vendor invoices, supporting documents, and related Purchase Orders (PO)
Problem #3: Limited insight into where invoices are in the process, Current Liabilities, and analytics needed to make critical business decisions
The key features to look for:
- Robust reporting through Management Overview dashboards with metrics on invoice processing, payment forecasts, user activities and invoice actions
- Approver analytics for current invoices held and number of days it takes users to approve
Problem #4: Lost or unorganized documents
Features to look for:
- Invoice capturing, which imports invoices from email directly into your Accounts Payable system
- Document imaging for scanning, image enhancement, and document storage
Problem #5: Payments or invoices are often late, reducing cash on hand
Features to look for:
- Automated and customizable invoice approval reminders
- Ability to easily identify and track invoices that are late or those that are coming due in a Late Invoices tab
- Flexible settings to allow invoices to be included in a Late Invoice tab prior to the invoice due date
The Best AP Automation Software Comparisons
As you research AP automation software solutions, you may have noticed there are quite a few options. How do you select the solution that is right for your business?
We recommend checking out G2 Crowd, a peer-to-peer review site dedicated to aggregating unbiased customer reviews on a variety of software solutions. They have collected and rated the best AP automation firms based on features, the quality of support, and much more.
Final Thoughts on Choosing the Right AP Automation Platform
In addition to considering your business’ current needs, choosing the right Accounts Payable Automation platform also requires you to look ahead. What will your needs be in the next two, three, or even five years? Does the system you are considering have the flexibility to scale as your business grows?
Ready to get started? Stampli’s AP automation system works with your current and future systems and processes to create a streamlined invoice approval workflow.