Author: Jeff Frankel
AP Automation can mean process efficiencies, increased visibility and better accountability for your organization. Ensure you are implementing the right process and products to achieve the best results. Here are 4 factors for leaders to consider as you make steps towards full automation of your AP processes:
Before you implement any new process for AP Automation, begin with the basic benchmarks. Assessing the current state of your AP process can include discovering the actual cost of processing an invoice. From procurement to payment, determine what inefficiencies exist and compare them to industry best-practices. Whether its lengthy approval cycles, manual invoicing, lost data or too many exceptions, collecting this data will also inform where you need to improve as you implement the new methodology. It will serve as a basis for comparison once your implementation is complete. According to Gartner’s Benchmarking Study, “Applying the lessons about measurement from the benchmarking process and reusing them over time, along with the tools, are the keys to making the results ‘sticky’.” Business leaders must also help their teams identify roadblocks and inefficiencies without judgment – stay objective with a focus on the goal of process improvement.
Setting attainable goals is the next step towards a successful automation project. Maybe you need to shorten approval cycles to enable additional trade discounts. Perhaps your goal is to reduce your overall reliance on paper processes. Gaining access to data in the cloud and across the enterprise may be a pressing goal. Because automating any system requires careful focus and planning, these actionable goals can help you decide where you need to focus your resources, including personnel and financial resources.
Next up is aligning your goals to a timeline for automating whichever business process meets your organization’s goals and desired outcomes. A goal without a timeline is just a dream. — Robert Herjavec, Shark Tank
Find the Right Partner
Finding the right technology partner is not only important, but it can also make or break the success of your project. With many options on the market today, business leaders have access to a full spectrum of solutions at range of price points, for virtually any industry. So how do you select the right partner?
Mapping out current AP workflows, technologies and processes is not only helpful when it comes to benchmarking and establishing an ROI but it also gives potential and current vendors a good idea of where you need to improve. This process is useful because it helps to clearly identify where you need technology and user best practices to succeed. Evaluate document management systems that can automatically recognize and assign vendor ID, default GL and other vendor/invoice information for a total automation solution that significantly reduces your procure-to-pay processing time. Continue to evaluate document management systems that you can grow with and that can work with your existing GL or ERP system. With full integration, companies can gain greater efficiency and insight into their business by reducing manual data entry and gaining swift access to relevant, precise and actionable financial information.
Another consideration is whether or not you choose cloud or on-premises access, or a hybrid solution. Does your current in-house system require an upgrade? If not, newer cloud-based solutions can offer the same features as on-premises products at a significantly lower cost with increased flexibility making collaboration between globally diverse locations and vendor/supplier interactions simple. Product implementations, upgrades, interfaces and the shifting technology landscape all contribute to the growing need for selecting vendors that can offer stability and flexibility. Look only at vendors who have experience in your industry and who offer built-in features and dashboards. A cloud based solution may benefit companies that need ease-of-access and system flexibility, but with the peace of mind that a disaster proof data center can offer.
- Capitalize on Cash Flow
According to the June 2015 study The Guidebook for Financial Transformation for Best Practices, “organizations that commit to financial transformation deliver 78% of reports needed by managers…ultimately resulting in shorter time to close a month, more accurate forecasts, and less impactful audits.” With AP Processing as a starting point in the overall schedule for automating finance, businesses can see results like improved cash management, lower costs per invoice and more rapid turnaround times in a relatively short period of time.
Proper cash flow management can help you better prepare for the future, take advantage of dynamic or early pay discounts, improve the opportunity for investment opportunities and avoid late payment penalties, while maintaining a better business relationship with vendors, suppliers and ultimately – customers. Automating your AP is a great place to start.
Ready to learn how leading AP departments build the case to automate AP processing? In a recent webinar with PayStream Advisors, we reveal research that shows how leading organizations are cutting costs and increasing efficiencies with automation and provide you with a Cost Per Invoice calculator, a Business Case template, and an AP Automation white paper so you can be on your way to making the case to automate your Accounts Payable department.
About the Author: Jeff Frankel is Executive Vice President and Principal at docSTAR, a B2B software firm specializing in cloud document management solutions and business process automation. He has more than two decades experience in corporate business development, working with industry-leading firms including Authentidate Holding Corp, Med-Flash, Health Focus of NY, and Ernst & Young. Jeff offers innovative perspectives on streamlining business for improved efficiency and productivity. You can follow Jeff and the docSTAR team on Twitter, @docSTARsoftware.