Want to set your AP Automation initiative alight?
Where there’s a will there’s a way!
While this might be a simplistic truism that’s bandied about, there is an elemental truth to it that merits some exploration. However that being said, no wise builder ever goes to construct an edifice without having counted the cost so as to ascertain the resources and time required to bring it to fruition. Sometimes it makes sense to build and sometimes it doesn’t. The key there is the evaluation of value derived from the building once completed. Similarly, AP automation is something that will cost to build, but the question is what is the worth to you? That is a subjective question that only you can answer with some analysis and introspection.
From our perspective there are a few things you need to address in order to come to a conclusion on that question.
- What are you current challenges you’re facing in AP? - Are you highly organized and efficient? As a follow up question, is your accounts payable process comparable to others, and have you compared it to benchmark data from industry analyst firms? Perhaps you have known issues that are dogging you including late payments, lost documents, or missed discount capture. Whatever the issues are for you they need to be identified. Before you can resolve any specific problem, business or otherwise, you need to define it and determine how to resolve.
- What will it take to fix the problem? For AP automation proponents, this can look like a myriad of things. It largely depends on whether you’re a fan of traditional Accounts Payable automation approaches, which we’ve made no secret about our stance on, or whether you have legitimate cause to pursue electronic improvements like e-Invoicing. Alternatively, EDI may be the trick of the day for you if you have enough sway with your vendor base and can force adoption. Whatever the case, determining the right course of action comes on the heels of defining the issue. The next logical sequence for any of these approaches is to begin to evaluate the costs associated with each, the timeline to business advantage, and the people required to pull this off. Sometimes reaching a decision to go forward is untenable, although more often that not now due to the rise of SaaS approaches, many more companies can benefit from AP automation than ever and transform their accounts payable processes. If you can’t find an approach that meets your budgetary requirements or you’re capabilities to deploy then you’ve pretty much found your answer to whether or not it’s feasible in the first place. The good news is that this is increasingly less and less of a problem.
- How do I get executive buy in? Well, if you’ve done a good job outlining the points in one and two, you have the raw material to pull together a business case, provided what you’re thinking alleviates the issues you’re highlighting without breaking the bank. Another point of note is that the timeline for realizing values created through AP automation has to be either immediate or certainly within 6-12 months. While this may be a conservative timeline, the reality is that for larger companies, say those processing more than 5,000 invoices a month, it may take longer to get full blown automation across their entire pool of invoices. This has to do with the nuances of working through processing complexity, especially as it relates to PO based invoice processing, or receiver matched processing, or even the diversity and complexity of your getting your vendor base onboard. A tremendous amount of this also has to do with exactly what items you are including in your accounts payable automation efforts. If it’s simply about automating matching, workflow, and invoice entry / release to your accounting system that’s one thing. If you’re also talking about automating payments, then that’s another level of challenge. That said, it may be well worth it, especially if you’re trying to enhance controls in this area or tap into the wellspring that is virtual payments.
Long story short, in order to get the executives on board, you better have done your due diligence to make your business case compelling so that whatever automation method you are choosing to pursue makes sense operationally and financially. If you can get those spheres to align, then in most cases you can get AP automation fly. The only obstacle to it that sometimes rears its ugly head is the competing interests and internal political pressures that occur with significant projects. In most cases though, the ROI of a positive project is enough justify it. If you juice your business case with some ideas on how to monetize your process from an ongoing base, the effect is akin to throwing gas on a fire.
We hope this helps you assess whether you can justify and execute your AP automation project. If you’re still undecided on what approach is best for you we invite you to check out the eBook below!