Let's take a trip down memory lane
So a while back we wrote up a similar post, but the time is right to revisit given time and change. With respect to the landscape changes for AP no real seismic events have influenced the market from the need to automate manual processes, but the growth of electronic payments adds an interesting dynamic to the value creation component of a solid Accounts Payable process.
Therefore, we want to take a look at accounts payable software as we head to Q4 in 2017 and look toward the future.
Certainly, the promise of automation is looming large. Now more than ever, there is a buzz in the tech community about the advent of artificial intelligence and its role in our future. This question is interesting specifically in accounts payable automation and has been at play in many deployments of accounts payable software to date, especially as a machine learning approach to data extraction. However, in the future things may be altogether different as AI could potentially be used to manage exception processing, handle vendor inquiries, and address a variety of other functions that we currently do manually.
With respect to the core set of approaches to improving the payables space, we’re still presented with several key iterations that one must evaluate and choose from.
Electronic Data Interchange - Otherwise known as EDI, this is the gold standard for bi-directional communication between vendors and customers. While data transmission and transactions are dynamic, it’s cost-prohibitive for smaller companies to deploy and tends to be best suited for organizations with massive transactional volume or high volume repeat transactions.
E-Invoicing - The darling approach of many EU countries, e-Invoicing converts the process to an entirely electronic effort whereby an order from a customer can invoke a PO and the correlating invoice for a closed-loop transaction that is essentially all digital. While very efficient, adoption barriers abound in terms of getting suppliers set up as the lynchpin to this strategy is getting them on board. While there are numerous benefits, the cost and time associated with driving suppliers to this method are a challenge. It has not taken in America as many advocates of it have wished, largely due to the fact that America is much more ‘wild west’ and doesn’t have the governmental mandates driving the adoption that have made it more successful in Europe and other parts of the world.
Accounts Payable Automation - This is typically a blend of various accounts payable software components to include OCR, workflow, document management, and integration to back-end systems. This has been traditionally done on-premises, though a marked shift to cloud based approaches is underway as the cost and delivery models are both less expensive and faster. This also offers the least resistance from suppliers because they are largely not required to change anything of how they are currently conducting business with their customers.
The big BANG
While many of these approaches boast advantages over traditional manual accounts payable processing, one item that is becoming an increasingly vital component of accounts payable software is the pressing need for integrated ePayments.
ePayments, whether ACH, wire or virtual card offers the customer the opportunity to both enhance security and controls within their payment stream and presents the unique scenario whereby the payment stream can be monetized and AP can be converted from a straight data processor to an organizational value creator. Literally speaking, accounts payable can be made into a profit center, where this was not a possibility even a few years ago.
While we have an obvious bent towards one of the specific models above, it is an absolute must to evaluate the value of your payment stream since that represents an immediate and tangible opportunity to drive monetary value back into your business, which can serve as a springboard to implementing the automation system of your choice if you take the transformation wall to wall.
If you would like to learn more, click here to schedule a free demo of our powerful AP Automation Software, APSmart.