Businesses that don’t take full advantage of accounts payable automation face significant challenges, including high processing costs, greater risk of fraud and errors, late payments, and frustrated vendors. Using an AP solution to automate procure-to-pay processes can help your business meet these challenges. AP automation speeds up invoice processing, reduces data entry and payment errors, prevents fraud, and makes collaboration easier between stakeholders and vendors.
However, choosing an AP automation provider can be overwhelming. Many AP solution providers promise greater efficiency, incredible cost savings, and more straightforward, easier AP processing, but how can a business choose between the huge variety of solutions in the market?
The best AP automation solutions start with an AP-first philosophy by making the complex and often frustrating manual accounts payable tasks simple and intuitive for the people involved in the P2P workflow. Fortunately, four criteria set the ideal solutions apart from the rest. They are:
- Ease of Use
- Collaboration and Communication
- Invoice Approval Confidence
- Product Performance
An AP solution that excels at these criteria will be a good fit for any business. However, CFOs face a deeper challenge when investing in automation technology in general. This article will take you through the challenges and benefits of AP automation and provide a simple guide to choosing the right fit solution.
The challenges and benefits of AP Automation
In this Leaders of Modern Finance podcast, Wayne Kimber, CFO of SymphonyAI, and Ben Murray, Founder of The SaaS CFO, discussed how successful CFOs embrace digitization and automation to develop people and technology and grow their businesses. AP automation technology has the potential to create evolutionary change for your business. Businesses have successfully used AP automation functionality to
- Replace inefficient manual processes
- Streamline and optimize purchasing and approval workflows
- Speed up invoice data capture and payment processing
- Improve internal controls and transparency
- Simplify the procurement to payment process
On the surface, these are great results for any business investment, but the decision to invest in AP automation is a bit more complicated.
The accounts payable automation challenge: transformation vs. efficiency
CFOs face a tough decision when it comes to investing in financial automation. Investing in an AP automation system can remove bottlenecks to improve routing, reduce costs, and improve efficiency. AP automation platforms also give CFOs access to accurate real-time information and analytics that can turn AP into a strategic driver for their company.
In Stampli’s 2022 survey of finance leaders, AP in 2022: Expectations, Technology, Opportunity, 76% reported they expected the responsibilities of their AP department to increase soon. Of those leaders, 41% said they expected the increase to include an expansion of AP’s strategic role.
At the same time, the survey revealed that 71% of leaders expected their accounts payable departments would need to process a greater volume of supplier invoices, with 27% saying the volume would increase “significantly.” Leaders also expected the complexity of invoices to increase – 55% said invoices were becoming more complex, with 24% saying invoices were becoming “significantly more complex.”
According to another survey by PYMNTS.com, CFOs are also evenly split on their approach to investing in AP automation.
With this in mind, your first consideration when choosing an AP automation platform should be to look at your company’s long-term strategy and requirements – is it more important for you to save money or gain strategic insights?
For most businesses, the ideal solution will lie somewhere in the middle, balancing streamlining current processes and providing actionable insights. That requires finding a platform that combines the flexibility and functionality to automate AP processes and provide greater efficiency with the analytical power and data transparency to provide visibility and control over data and communications.
Finding the right AP solution will let your business reap substantial benefits.
The benefits of accounts payable automation solutions
Here are some of the many benefits of AP automation:
Streamlined invoice management
AP automation can significantly improve invoice processing efficiency, letting your company improve cash flow by making timely payments and avoiding late fees.
Three-way matching with real-time visibility
With automation, AP teams can automatically match invoices, receipts, and purchase orders and detect errors in real-time.
Improved spend management
AP platforms automatically sync general ledger accounts, pricing information, ACH and electronic payments, and approvals processes with your ERP system and accounting software to reduce payment errors and late fees.
Better supplier management
Scalable to support business growth
Scalable AP software provides the flexibility to grow and maintain process efficiency when your business grows and the volume of invoices increases. Dashboards like Stampli Insights also provide access to real-time data and analytics to help you make informed decisions.
Stronger internal controls and less fraud
AP automation simplifies setting and enforcing internal controls to prevent fraud and reduce errors.
Achieving these benefits is made a lot easier by selecting the right vendor. Read on to learn more about the four vendor criteria.
Is the AP Automation software easy to use?
Although automation can simplify and streamline P2P processes and workflows, at the end of the day, the platform still needs to be used by employees. The best solution in the world is of little value if employees find it difficult or frustrating to use.
The easiest-to-use AP automation solutions need minimal training to get up and running, have a simple and intuitive interface, and provide friendly and effective user support.
What to Look For
The best way to assess an AP solution’s ease of use is to try a demo and allow your AP team and stakeholders to test the interface and functionality. It can also help to ask questions such as:
- How much training is required to get AP and finance teams up and running?
- Do vendors need training to use the vendor platform? Does the provider offer vendor training?
- How intuitive is the platform to use? Where do users get frustrated?
- How well is the user experience designed for your organization? Does it match your current corporate culture/user experience?
- Can the platform distribute invoices without the AP team coding them?
- How well does the platform integrate with your existing ERP system?
- Does the platform support the segregation of duties?
How well does the AP platform support collaboration & communication?
If AP teams can communicate and collaborate with stakeholders and vendors, process efficiency, attention to detail, and enforcement of internal controls can be improved. Centralizing these functions and making them available to everyone in the AP workflow is critical to efficient AP management.
The best accounts payable solutions centralize communications and facilitate collaboration with other teams, vendors, and stakeholders. They also integrate seamlessly with ERP and accounting systems to ensure smooth communications across the organization.
What to look for in an AP automation software solution
Look for platforms that provide an easy-to-use communications interface that links communications to each invoice and allows all stakeholders to share information efficiently. Also, look for vendor portals that easily onboard vendors, answer questions, and allow vendors to check the status of their invoices and payments. Here are some questions to ask:
- How well does the platform foster collaboration and communication with vendors and stakeholders?
- Does the platform allow users to ask and answer questions internally, with vendors, and other external parties?
- Does the platform record communications and easily make them available for investigation or audit?
- How well does the platform handle communications with infrequent or one-time vendors?
- Does the platform create or facilitate the creation of a complete AP audit trail?
- Does the platform sync communications with ERPs and other business systems?
Does the platform provide invoice approval confidence?
Approval confidence means that CFOs and Controllers can trust that the platform follows the AP process and enforces internal controls. Hence, approvals are valid, and the business can make legitimate vendor payments. CFOs can feel confident that their company has received the products or services, approvers validated the invoices correctly, and pricing was as contracted.
The leading AP automation platforms handle invoice processing and validation efficiently and effectively. They capture the right transaction information and detect and address errors and fraud automatically. By providing approval confidence, these platforms also free AP team members to spend more time on value-added projects rather than chasing down approvals.
What to look for
Approval confidence is experiential. Look for vendors who can provide customer testimonials and case studies proving their solution is efficient, minimizes errors – and is trusted by other CFOs. Also, consider asking these questions about any vendor you are considering:
- Does the platform provide advanced optical character recognition (OCR) functionality for paper invoice entry, coding, and verification?
- Can they provide metrics showing how their platform makes invoice reviews and approvals easier and faster?
- What context and information about an invoice does the platform provide approvers, reviewers, and auditors?
- Does the platform provide all communications and relevant information about an invoice in one easily accessible place?
- Does the platform encourage and facilitate invoice and transaction reviews by leaders, managers, and auditors?
- Does the platform provide a complete audit trail of approvals and supporting information?
How well does the AP software solution perform?
A solution is only as good as its performance – it doesn’t matter how easy the platform is to use if it doesn’t deliver results.
The best AP solutions deliver consistent, measurable results across the board, like reduced processing times, labor savings, lower error and fraud rates, and improved days payable outstanding (DPO).
What to look for
Carefully look at each vendor’s track record to see if their clients see consistent and measurable results. Good vendors should be able to point to case studies showing real-world evidence of their product’s performance. Here are some examples of what to ask:
- What is the average increase in invoice processing efficiency and cost savings from using the solution?
- Where do existing clients find fault with the solution, and what is the vendor doing to address their concerns?
- How well does the vendor perform on client support?
- How well does the solution integrate with ERPs and accounting systems?
- Is the solution cloud-based, on-premise, or both?
Establishing your needs up front and evaluating potential accounts payable automation vendors by these criteria will help clarify deciding on an AP solution. Software rating sites such as G2 are also a great source of user reviews and feedback on AP platforms.
Stampli: AP Automation designed for humans
Stampli understands that accounts payable automation needs to be designed for humans first. As the leading accounts payable solution for ease of use, relationships, implementation, and getting results, Stampli is the natural choice for any business looking to get the most out of their accounts payable investment.
Walking the walk instead of talking the talk
One of the surest tests of a company’s quality is how well they treat their own employees. Comparably has recognized Stampli for employee satisfaction in several areas, notably diversity, leadership, company culture, and employee happiness.
Stampli’s combination of proven results, innovation, and people-first design has made us the leading accounts payable automation provider and a strong partner for any organization that wants to get the most out of accounts payable. Contact our sales team today to set up a free demo.