It may seem like a big undertaking to go about automating accounts payable processes throughout your business.
To help, here’s a quick guide, and some actionable steps you can take.
Why should I consider automating accounts payable?
You may want to consider accounts payable automation if you’re looking to streamline operations, lower costs and deliver more personalized services to customers.
You also may want to consider accounts payable automation if you need your executives to be able to approve invoices from anywhere with an Internet connection, at anytime.
There’s another reason. You’ll boost productivity and process more invoices and payments without hiring more employees.
You’ll also reduce your manual labor costs – often one of your more expensive AP processing costs.
5 Signs It’s Time to Automate
How do you automate accounts payable?
There are 10 steps to automating your accounts payable, beginning with an inward look at your AP department.
Let’s take a closer look:
- Understand your costs and potential savings: The first step in your organization’s transition to a more efficient AP department starts with you. Gather important data like invoice volumes, average cost per invoice, and other key metrics to create a business case. Your business case needs to provide clear numbers that show how much your company can save with AP automation
- Partner with senior management: Take your business case up the chain of command. AP managers, controllers, and CFOs are all key leaders in the transition process from manual to automated accounts payable.
- Build a list of your unique system requirements: While some AP solutions can provide great automation out of the box, many companies require some custom development to integrate with existing software packages plus some custom features.
- Issue an RFP and pick a systems provider and partner: Now that you know what your company needs,
it’s time to find the right partner to implement your solution. While AvidXchange offers unparalleled solutions, your business is best-served issuing a competitive RFP that solicits several competitive bids - Hammer out the pricing and details: When you have a prospective winner, the next steps involve legal teams and financial decision-makers. While some providers offer out-of-the-box solutions with an existing contract, others work with your legal team to ensure the best win-win result for both companies.
- Run a small test and build an implementation roadmap: Once your contract is in place, you may want to get started with a small test, known as a pilot project or proof-of-concept.
- Strengthen communication around the upgrade project: Unless everyone impacted by the project is included, you may find some resistance and push-back from internal teams. Strong communication as the project is planned and deployed will help get your employees excited about the change and be more supportive.
- Turn suppliers into partners: AP automation can lead to accepting e-invoices from your suppliers, but that won’t happen unless those suppliers are a partner in the upgrade process. Remind your vendors that the upgrades will help them too. They can cut costs, and get paid faster thanks to your new system.
- Assess successes and areas for improvement: Once you have flipped over to the live, automated AP system, you can’t just trust that everything will work as expected. Through testing, data, and evaluations you can keep a constant cycle of upgrades and improvements for the future.
- Establish ongoing monitoring, check-ins, and improvement cycles: With new technologies and changing business needs, there may be more opportunities to continue improving and upgrading in the future. Repeat step nine, assessments and improvements, and build this into your company culture. There is always room for improvement in AP and elsewhere in your business.
How does automating accounts payable affect the invoice approval process?
Automating accounts payable can help reduce duplicate payments and mistakes. And it reduces the time it takes chasing business leaders to approve invoices by automatically notifying them when they have an online invoice to approve.
How does automating accounts payable affect the payment process?
Automating accounts payable affects the payment process accelerates the speed at which you deliver payments to your vendors and suppliers. This is huge – payment delays are a major problem inherent with manual processes and strain business relationships.
Automation also reduces the number of duplicate and incorrect payments you send to vendors and suppliers.
Payment Automation: The Final Frontier For Full AP Efficiency
Will AP software integrate with my accounting system?
It’s important to use an AP software that integrates with your accounting system. You need to send and receive invoice and payments data back and forth between the AP automation and accounting system. That’s fundamental to this whole process working effectively.
What are other benefits to automating accounts payable?
We’ve already shared some benefits to automating accounts payable.
Here are several more:
- When you stop using paper checks and paper processes, you’ll reduce costs associated with check stock, printing suppliers, envelopes and postage.
- When you automate AP, you make it much easier and faster for auditors to find financial information. You don’t have to dig through filing cabinets and other disparate places for paper documents auditors want to see.
- AP automation reduces the numbers of exceptions you need to deal with in the invoice process. This means there will be fewer cases when invoices and purchase orders don’t match and need to be investigated. So you’ll spend less time and money resolving exceptions.