In a manual environment, accounts payable departments will find themselves using an unwieldly amount of less-than-ideal-for-the-task technology. They will marry this with manual processes resulting in an awkward conglomerate of practices.
The AP Tech Stack in a case like this might consist of:
- ERP Reports
And the AP process would include lots of manual handling, data entry, phone calls (or emails) to find where the approval stood and/or when the payment would be made, an altogether clunky and inefficient process. In this scenario, scaling for growth is not easy given the level of manual intervention needed in order to get the invoice processed and paid.
The list above is not very impressive and some might even make the case that these are standard business tools and, as such, should not be included in an AP Tech Stack at all. That is a separate discussion.
Savvy companies everywhere are turning to automated solutions to handle various accounting tasks. The biggest move in this area is in expense reporting and invoice automation. Probably the biggest impetus has come from improved automation on the user-interface front, and of course reasonable pricing.
The beauty of these two applications is this. If the right application is chosen, they are easily scalable. Scalability is critical if your organization is looking to grow fast (which could come from an acquisition) or to become more efficient.
The scalability issue has become even more important in the invoice arena given what is happening with emailed invoices. While an ever-increasing number of companies are emailing invoices, many of them are doing it to excess. Emailed invoices are definitely a good thing but when vendors decide to send two and three copies of the same invoice, trouble can occur. This is where scalability kicks in.
While the company may not be experiencing any real growth, and hence, management will be reluctant to add staff in accounts payable, the invoice volume can skyrocket. This is happening at most organizations. Thus, it is more critical then ever that the accounts payable staff weed out those duplicates. But that takes time and resources, which is where invoice automation really shines. It permits companies to handle this spurt in the number of invoices without adding resources.
Given that this problem is only likely to grow, it is easy to see why best practice organizations everywhere are adding automation to their AP Tech Stack.
Mary S. Schaeffer, a nationally recognized accounts payable expert, is the founder of AP Now, a company that creates business intelligence on all issues impacting the accounts payable and payment function. She is the host of the AP Now Podcast.