You may be familiar with well-known basic benefits of accounts payable (AP) automation solutions: less paper, lower costs, more time for strategic work, etc.
Those are all very true, but there’s more behind the scenes that make AP automation solutions a powerful catalyst for streamlining operations, strengthening supplier relations and driving sustainable business growth.
We’ve boiled the key differentiators of truly impactful AP automation down to three key characteristics.
Truly Impactful AP Automation Solutions Should:
Why are these three features so important for AP automation solutions?
These features, embedded deep into the engine rooms of business, are directly related to major performance goals: boosting productivity and efficiency, accelerating growth, cutting costs and delivering more personalized services to customers.
They are absolute must-haves. Non-negotiable.
Provide a seamless integration and 24/7 accessibility
AP automation solutions can do wonderful things. But that depends on the software being able to communicate with accounting and enterprise resources planning (ERP) software.
How does this happen? The answer is application programming interfaces (APIs) – the “plugs” that connect these systems together.
Think of APIs as the linchpins that enable fast, accurate and uninterrupted transfers of invoice and payment information.
By synchronizing software – on schedule and on demand – the integration enables seamless digital transmission of invoice and payment data between systems.
This lessens the time finance pros need to spend importing and exporting this data and posting AP transactions manually.
AvidXchange, for example, has created over 225 integrations between our AP automation software and widely used accounting systems, meaning your current system can remain intact while streamlining your existing processes.
“Seeing everything go through with AvidXchange and be paperless and seeing you can approve and code from anywhere … that just blew our minds,” said Amanda Shumway, AP manager for Agynbyte LLC, which integrated AvidStrongroom into their FRONSTSTEPS Caliber accounting system. “We were expecting a lot of integration issues, but that wasn’t the case. We could do everything we needed to and no one in the company had to change the way they worked to make sure the two systems operated as one.”
Agynbyte now processes 62.5 percent more invoices per month than before seamlessly integrating AvidStrongroom with Caliber.
It’s also important for your AP automation solution to offer 24/7 access. Mobile-friendly web interfaces for your automation software allows you and your finance team to keep things moving while in the field and on the move. Benefits of mobile capabilities include:
- Approval of electronic and payments anytime, anywhere you have an Internet connection
- Assigning an ad-hoc approver when you’re out of pocket
- Ability to attach photo documentation in real-time
- Managing job costs, change orders and compliance documents from the field
- 24/7 visibility into and control over your cash flow
Lastly, make sure the mobile interface can perform the functions your organization needs and provides a pleasant user experience.
Empower maximum ROI and scalability
Return on investment (ROI) is a simple concept. If a business invests $10,000 on AP automation, they expect it to help them generate more than $10,000 in revenues. Luckily for those businesses, there are several ways to maximize ROI using AP automation – some more obvious than others.
Let’s start with the obvious. AP automation saves a massive amount of time for your organization. The solutions reduced time spent accessing data, tracking down invoices and chasing approvals and payments.
You also minimize the negative repercussions of human error such as duplicate payments and overpayments.
Here’s some data to back this up:
- Goldman Sachs found AP professionals spend about 30% of their time collecting data and fielding inquiries related to invoices and payments
- PYMNTS.com showed 72.4% of AP professionals receive invoices in the mail, with 40% still receiving some invoices via fax
- PYMNTS.com also determined the industry average to approve a single invoice is more than one week
In Goldman Sachs’ breakdown, they estimated the total headcount cost associated with AP staff involved in manually processing a single invoice was $14.69 for medium-size businesses and a whopping $20.79 for small businesses. The estimates in an automated system dropped to $3.87 and $4.49, respectively.
In a separate study, the Institute of Finance & Management reported companies using limited, or no automation spend an average of $8.78 to process one invoice. If they use a high level of automation, it costs $1.77.
WATCH: COST-SAVING BENEFITS OF AP AUTOMATION
Though the exact figures vary from one source to another, there’s a consistent savings of nearly 70%.
Then there are drivers that take an AP automation solution to maximum (potentially unrealized) ROI, including:
Incentive-based payment options and rebates
Why not earn while you pay your bills? Take advantage of e-payment options that generate incentives like Mastercard, direct deposit and virtual cards.
The more bills you pay, the more rebates you earn. However, keep in mind your suppliers have to accept the form of payment that includes the incentives. So, the more incentive options available, the better.
Information security and risk mitigation
The reduction (or near elimination) of paper payments naturally reduces the risk of information theft and fraud. Fraudsters love paper.
And speaking of fraud-rich paper, checks remain the most frequent target of payment fraud, according to the Association of Finance Professionals.
Payment methods subject to attempted/actual payments fraud (% of organizations)
With increased adoption of remote workforces, important information needs to be housed in a central, secure location. Centralized AP processes provide clear visibility and make it easier to monitor for fraudulent activity. And, it takes advantage of automated fraud detection tools.
For instance, AI is used in cybersecurity for fraud detection, malware detection, intrusion detection, scoring risk in a network, and user/machine behavioral analysis.
Choose an AP automation solution made to scale alongside your business
Your company is steadily growing, and that’s great news! But what’s not so great is encountering bandwidth and sustainability issues in your critical operations and financial business processes.
That’s why there is a real difference between growing and scaling for growth, with the latter being more of an intentional action plan you put in place to ensure your organization is best equipped to handle business growth. After all, what good is taking on more business if cracks in your operational foundation lead to heavy friction that undermines, or even undoes, the very benefits of that growth?
Nothing slows growth like being bogged down by essential and time-consuming tasks, and manual accounts payable is one of those. Automating invoice and payment processes will allow your existing AP team to handle increased volume with ease, and it will even free up their time for more strategic tasks that will help you scale your business.
“We have saved significant time in the AP process, which has allowed us to complete more value-added activities for the company and help us continue to grow. For me, that’s more the definition of success rather than just numbers. It’s people noticing that things are happening that weren’t happening before.”
With that said, as employees enter and exit the fold make sure your AP automation solution allows you to define different workflows, approval processes and policies based on department, office or company. Workflows can also be customized by supplier, vendor code or department to make sure your software can meet your company’s needs as they grow more complex.
Also, ask your provider about user and transaction fees to ensure they align with your growth objectives. User fees can range from $0 to $150 per user per month, which can add up as your company and finance department grows.
Offer superior support and service
Companies using AP automation and the suppliers paid by them should feel they have an ally in in that provider to speed up payments, lower costs and minimize security risks.
However, not all providers prioritize both their users and their suppliers. Chatbots and automated help lines are used instead of real people – resulting in frustrated users who need additional training or direction, and infuriated vendors wonder why they haven’t received a payment.
A truly impactful AP automation solution should have specialized support teams for onboarding, success and services to ensure you speak to someone who knows how to solve your problem. Those support teams should be available immediately, and in whatever method that works best for you (chat, phone, email) — because you need help when you need it, not the next day or even days after encountering an issue.
As for suppliers and vendors, they should be treated as customers, not second-class citizens. They shouldn’t be forced to do all the work to onboard themselves into an automation workflow and then largely forgotten about.
"An interruption in payments – especially when it comes to animal care, our keepers, veterinarians and maintenance staff members – could have very grave consequences here. ... When our vendors have a question, we can answer it almost immediately by pulling up the payment in the system and seeing all of the details. Because our vendors know that they can count on us, we know that we can count on them.”
Suppliers deserve to be given multiple payment options that prioritize their cash flow. If the supplier’s preferences change and they want to start receiving by virtual credit card or get paid faster, the AP software provider should make those adjustments for them.
When evaluating an AP automation solution, make sure your suppliers will be taken care of. At the end of the day, treating your suppliers well improves your relationship with them.
Final thoughts
These three non-negotiable features are the cornerstones to success in automating your AP processes. They’re about much more specific and actionable values beyond the obvious stuff like “use less paper.”
To recap, when considering the adoption of an AP automation solution make sure it:
- Integrates easily with your accounting software and ERP system. Don’t be overly enamored by the software features if it doesn’t enable a smooth integration.
- Allows your team to scale without overhauls. It has to be flexible enough to be upgraded and work effectively as your company processes more invoices.
- Serves as an ally both for your company and your suppliers. An AP automation provider should make the payment process equally painless for all parties.