How to Choose the Right AP Automation Solution: A 2020 Buyer’s Guide

While the accounts payable department is fundamental to a business’s operational efficiency and financial success, it has traditionally been a back-office function not considered integral to the strategic direction of a company. Recently, however, companies—particularly small- to mid-market—are seeing the AP department in a different light, recognizing that it not only is a key contributor to the firm’s bottom line through cost savings and capturing discounts, but also houses valuable data that can help finance leaders make more informed decisions towards setting strategy and contributions to the bottom line.

As a result, companies have been moving from time-consuming, error-ridden manual invoice and payment (AP) processes to a partial or fully automated workflow. And the trend is continuing in 2020. But one thing that stood out in an independent study by Levvel Research is that back-office professionals lack sufficient education on AP automation. In fact, very few respondents were able to say they are very familiar with the general functions of automation software.

This is concerning. If companies are going to automate, which they should, they must choose the right solution, or it can be very costly in the short- and long-term.

This article reviews important trends in AP automation and key things that finance leaders should consider when investigating solution providers.

Easing the Pains of Manual AP Processes

We’ve all heard them by now. The top pain points associated with a manual AP process have remained consistent over recent years, and 2019 was no different. Manual data entry and inefficient processes remained at the top of the list by more than half of respondents (51%), with manual routing for approval and lost or missing invoices still in the top three.

AP automation, in general, solves for the top pain points. Quicker approval of invoices continues to top the list of improvements along with increased employee productivity, reduction in paper invoice volume, and lower overall AP processing costs.

Again, no surprises here. But what does this mean to finance leaders as they explore solution providers, particularly if they all offer the same benefits?

Look to the Cloud

Start by looking for a modern cloud-based tool that:

• Seamlessly integrates with existing legacy finance/ERP systems for a complete, end-to-end purchase-to-pay solution
• Offers workflow customization
• Is dynamic and flexible, scales as your business grows, and enables business agility
• Leverages advanced technologies powered by A.I., such as true OCR (optical character recognition) built in, smart data extraction, and machine learning, all that intelligently enter applicable invoice fields
• Gives visibility into the status and history of documents through robust reporting and analytics

Cloud automation offers a host of benefits beyond the ones most frequently cited, such as:

• A quicker ROI, many times realized almost immediately
• Modernization of the entire finance function
• Access to data that can help finance leaders be more strategic in their purchasing decisions, improve vendor relationships, and evaluate spending trends
• Leveraging the security features to mitigate risk and prevent fraud

Do Your Homework

Being prepared to investigate and interview potential AP automation solution providers starts with an internal assessment. Involve all stakeholders and detail things like: how many invoices you process a month; whether your organization is centralized or decentralized; what formats/methods you currently receive invoices in; how many approvers are in the process; KPIs for the goals you want to achieve.

If the solution providers are worth your consideration, they will start by truly understanding your business, your workflows, your pain points, and what improvements you want to make. You will be prepared to answer all of their questions after performing your internal assessment.

And then have your own set of questions ready for each of the providers you are investigating, such as: “Is your solution cloud-based or on-premise?” “What advanced technologies does your software leverage and what does that mean to the workflow?” “Do you outsource any of your technology features, such as OCR, or is it all part of your technology?”

Download this helpful checklist to make sure all of your bases are covered.

And remember the most important thing: Seek a true business partner, not merely another vendor. One that will help educate you on AP automation and offer advice, best practices, and resources to achieve your finance goals.

To learn more about how AP automation can increase efficiencies and drive profits, visit www.GetYooz.com or call 832.384.YOOZ (9669).

Laurent Charpentier, COO and chief innovation officer, Yooz Inc.

 

Data referenced in this article is based on the Levvel Research 2020 Payables Insight: Buyer’s Guide to Accounts Payable Automation Software report and survey findings. Download the report at www.levvel.io.