A 2023 survey of accounts payable leaders and employees by Stampli and Probolsky Research revealed that 89% of senior leaders are “very interested” in the potential for AI automation. The same survey revealed several barriers that may prevent companies from implementing AP automation in their operations.
Reaping the benefits of AP automation means tackling the obstacles that may be preventing your AP department from adopting AI. In this article, we explore five best practices CFOs can use to address and overcome these barriers and reap the benefits of accounts payable automation software.
Let’s dive right in.
A strategic approach to AP automation
As the steward of your company’s financial resources, you need to balance cost savings with strategic investments. It’s a delicate balance. In Deloitte CFO Signals Q2 2023, 54% of CFOs reported their CEOs were asking them to, “Identify, evaluate, and launch cost savings efforts.” Just under half (40%) also said their CEOs were asking them to focus on, “Identifying and executing new strategies and transformative initiatives.”
Accounts payable departments have traditionally been considered cost centers. However, it warrants a closer look as an engine for growth and transformation. A strategic investment in accounts payable can help you reduce costs and improve the effectiveness of strategic initiatives like working capital management and growth investments.
By streamlining accounts payable processes, AP automation software solutions can save time and money. Intelligent AP automation solutions like Stampli are easy to use, can be set up in days, and are helping businesses achieve significant efficiency gains and cost savings.
Intelligent AP automation solutions are also a valuable strategic resource. They give you real-time visibility and complete control over AP processes – enabling you to identify opportunities, make informed cash management decisions, and grow your business.
Following these five best practices can help you overcome the perceived barriers to AP implementation and turn AP into a strategic driver.
- Maintain good communications with your AP team and vendors
- Set up workflows and standard operating procedures
- Integrate your ERP and accounting systems
- Leverage real-time AP data and analytics
- Focus on ongoing optimization and improvement
Let’s take a look.
1. Maintain good communications with your AP team and vendors
The key to managing accounts payable effectively is managing relationships. Your AP team and vendors are critical to your business success, so keeping everyone in the loop, listening to their concerns, and making your decisions transparent is important.
Keep your accounts payable team informed
Implementing and managing an AP automation solution can be complicated, so it’s important to keep your team up to date about ongoing changes. For example, in the Stampli and Probolsky Research survey of AP professionals, over half (64%) of AP employees said they were worried about a lack of human oversight over AI systems. However, 59% of the same group said they would be less concerned if decisions made by an AI had to be approved by a human.
Sit down with your team and talk them through the benefits of AP automation to their roles – especially how it will make their jobs easier. Keep track of your payable team’s concerns and pain points to help you choose and implement the right AP solution.
Build transparent vendor relationships
Keep your suppliers updated about the changes to your AP workflows and how they will affect your business relationships – especially the benefits like faster payments, fewer disputes and errors, and easier communications. They will appreciate being informed. Many AP automation solutions feature a vendor access portal that simplifies communications between suppliers and your AP team and lets suppliers submit invoices, update their contact info, and check the status of invoices and payments.
Tip: Look for AP automation solution providers with a proven track record of good communications and relationship management.
2. Set up workflows and standard operating procedures
AP automation solutions can help you set up workflows to ensure employees are accountable and clear about their roles and responsibilities. That way, everyone on your team is on the same page.
Have an AP point person
Assign a person as the single point of contact with your AP automation provider and the point person for internal stakeholders. This person will manage the implementation and ongoing maintenance of the AP automation solution. They will be responsible for setting up automation workflows, ongoing monitoring and optimization, and process improvement.
Set standard operating procedures
Put a system in place to set roles and responsibilities, map workflows and approval routing, and establish internal controls. Setting standard operating procedures removes the guesswork from AP processes and establishes a structured system to keep everything on track.
Tip: An AP automation solution with machine learning capabilities automatically learns and optimizes your existing processes to make setting up standard operating procedures easier.
3. Integrate your ERP and accounting systems
Choosing an AP automation system that fully integrates with your existing ERP, financial systems, CRM, and accounting software is important. This will eliminate the need for manual data entry or for employees to log in and out of software systems all day. Integrating the AP solution with the automation tools your finance team uses daily also reduces the learning curve and increases user acceptance.
Integrate where you can
Eliminate manual processes and data entry by choosing an AP solution that fully supports the native functionality of your existing systems. Automating data entry ensures your whole organization has access to the same data. It also reduces human errors and fraud risk.
Tip: Check user reviews and case studies for different AP automation solutions to see what other customers are saying and what kind of ROI and timeline you can expect from integration.
4. Leverage real-time AP data and analytics
AP automation solutions offer advanced tracking, analytics, and reporting capabilities that give real-time insights into accounts payable workflows and transactions. Use these metrics to measure performance, calculate ROI, detect errors and fraud, and manage cash flow.
Set and track key performance indicators (KPIs)
Visibility into AP data helps you be more strategic in decision-making. Understanding key metrics and how your AP department measures up to them will help you identify bottlenecks and trends and make informed decisions about improving AP workflows. Some important accounts payable KPIs include:
- Invoices pending routing
- Invoices pending approval
- Number of invoices processed
- Invoices rejected for incorrect coding
- Urgent invoices
- Invoices pending routing by working entity
- Invoices in “For my attention”
- Invoice lifecycle
Centralize accounts payable data
Capture and digitally store paper invoices, purchase orders, vendor contracts and details, and receipts to make this information accessible and secure. By keeping AP data in a central location, you will eliminate inefficient paper processes, reduce errors, and increase the transparency of your AP processes.
5. Focus on ongoing optimization and improvement
Always look for ways to optimize and improve your AP workflows. It’s a good practice always to seek ways to simplify tasks and processes – the simpler a task is, the easier it is to manage.
Confirm user and vendor acceptance
Check in with your AP team members and vendors regularly to ensure they’re comfortable with the AP automation software and identify any areas for improvement. Some AP automation platforms provide user analytics to help you understand how people use the solution.
Keep a human in the loop
Ensure that your processes and internal controls require human oversight of key decision points such as invoice approval, changes to user roles, and payment authorization. Regularly audit your AP workflows to ensure there are no areas where the AI is making critical decisions without human approval.
Tip: Look for AP solution providers who offer features to eliminate common AP headaches. For example, Stampli’s Unusual Invoice Alerts feature notifies you of unusually large invoices when they are received, instead of at the end of the month when it might be too late.
How to choose an AP automation solution
When choosing an AI-powered AP automation solution, you should look for a platform that combines flexible and scalable process optimization capabilities with powerful analytical capacity.
The best AP automation solutions start with an AP-first philosophy. They simplify complex and time-consuming manual tasks and provide timely and actionable insights. Four criteria set these solutions apart:
Ease of use
Look for simple, user-friendly solutions that require minimal training or changes to your existing workflows. Check online user review sites like G2 or Capterra to hear from other users about what they like and don’t like about a platform.
Good communication and collaboration
Platforms with simple and clear communication tools, seamless data sharing and integration, and features like vendor portals make it easy for employees, vendors, and stakeholders to communicate and collaborate – especially if they work remotely or at multiple locations.
Invoice approval confidence
Choose a platform that provides 100% approval confidence and an easy way to track down and investigate errors. Look for features like intelligent document capture and management, automated GL coding and purchase order matching, and ML-enabled data entry to detect and flag discrepancies.
An AP solution provider is only as good as the quality of its solution. Look for providers that deliver consistent and reliable results, like low error rates, reduced AP processing time and costs, and improved working capital management. Ask to see each potential provider’s track record to understand how they perform.
The bottom line: Accounts payable is a critical function in every finance department, and AP automation is a powerful tool in any CFO’s toolbox. An AP solution that excels at these four criteria will provide a strong foundation for implementing the best practices in this article – and help you transform AP into a potent strategic driver for your business.
Transform Accounts Payable with Stampli
Stampli is the leading AP automation solution and the only one designed for Accounts Payable departments. Recognized by AP professionals for ease of use, relationships, implementation, and getting results, Stampli is the natural choice for CFOs looking to find cost savings and lead innovation and transformation in AP.
The Industry Leader in AP Automation
You’ll immediately see the impact of AP automation on your bottom line. Stampli offers a no-code implementation that takes days, not months, and seamlessly integrates with major ERP systems and accounting platforms – most customers see ROI within 12 weeks.
Stampli makes AP simpler and more powerful thanks to Billy the Bot — the only AP AI assistant that adapts to your existing processes, optimizes AP workflows, and provides powerful insights.
Contact Stampli today to arrange a free demo.