How to Prepare Your Employees For AP Automation Adoption

As digital transformation increases across industries, accounts payable (AP) departments are under pressure to streamline their processes and adopt automation. With time-consuming manual tasks and endless paperwork, this pressure couldn’t come at a better time since many organizations are already working diligently to optimize their accounting operations. 

Over time, the shift to AP automation can offer substantial benefits—but it also requires AP teams to change the way they work. That’s why preparing your AP team for this transition is critical to achieving a successful rollout and maximizing the value of the technology. 

In the following article, we will explore the various facets of AP automation, the advantages of making the switch, and how this digital technology can help evolve your team.

Why Employees Resist AP Automation Adoption

Introducing AP automation can stir a range of concerns and apprehensions among accounting employees, especially when they’ve been using the same processes for years or even decades. The first concern many AP employees have about automation is whether or not the repetitive tasks this technology automates will affect job security. 

Lack of familiarity with a technology is also a big reason AP automation is met with resistance. Not everyone on the AP team will be tech-savvy, and the idea of learning a new software system can be intimidating. The resulting lack of familiarity can lead to resistance as employees may worry about their ability to adapt than they do about the potential benefits automation technology can bring them.

Here’s something else to consider: When employees don’t understand the benefits AP automation can bring, they may be more reluctant to abandon current work processes and routines. 

If you’re a financial leader who’s able to recognize these concerns and address employees directly about them—it can ease the transition period. Altogether, by helping your team understand the value of automation and reassuring them about their roles, you’ll foster more positive attitudes toward adoption.

The Benefits Employees Get for Adopting AP Automation

For businesses and teams ready to embrace it, AP automation holds significant benefits that go well beyond just making the process easier. Here are some key advantages AP teams can look forward to:

Increased Efficiency. AP automation significantly reduces the time it takes to process invoices by eliminating manual data entry and automating approval workflows. As a result, the AP team can handle more invoices with fewer errors.

Reduced Error Rates. Automating data entry and matching processes minimizes human errors, which is common with manual inputting of data. As a result, this leads to more accurate records, fewer payment delays, and a reduced risk of compliance issues.

Better Visibility and Control. AP automation provides real-time insights into invoice status, payment cycles, and financial data. With this level of visibility, employees can make informed decisions quickly and manage cash flow with confidence.

Improved Employee Satisfaction. Employees who are no longer bogged down by repetitive tasks can focus on more value-added activities. Streamlined workflows allow them to contribute to higher-level projects, which increases job satisfaction.

Enhanced Compliance and Security. Automated systems often include built-in compliance and security measures that reduce the risk of fraud while ensuring adherence to financial regulations. Such security features can be particularly valuable for businesses handling sensitive financial data.

Steps to Adopting AP Automation

Successfully adopting AP automation involves careful planning and strategic implementation. Here are the key steps:

1). Evaluate Your Current AP Process. Begin by mapping out your current AP workflow to identify areas that could benefit from automation. This assessment will help you set clear goals and choose the right automation solution to meet your needs.

2). Engage Stakeholders Early On. Involve key team members in the decision-making process from the outset of your automation journey. By incorporating their input and addressing concerns early, you can build a sense of ownership that helps smooth the transition.

3). Select the Right Solution. Choosing a reputable AP automation provider is essential to your success with digital transformation. Look for software that integrates with your existing ERP system, offers user-friendly features, and aligns with your business’s specific requirements.

4). Develop a Training Program. Provide comprehensive training to ensure that employees are comfortable with the new system, and lean on your automation provider to lead this initiative. Make sure you and the automation provider are not only instructing on technical aspects of the software solution but also communicating the benefits and positive changes automation will bring to their roles.

5). Establish a Rollout Plan. With guidance from your automation provider, start with a pilot program to test the system in a smaller scope and allow for adjustments before a business-wide launch. Make sure to communicate the timeline and process clearly so everyone knows what to expect and when to expect it.

Overall, these steps play an essential role in a successful adoption of AP automation, setting the foundation for a smooth transition and increased productivity.

How Employee Roles Change with AP Automation Adoption 

AP automation doesn’t eliminate jobs; instead, it transforms them by shifting the focus from mundane, repetitive tasks to more impactful responsibilities. For example, consider how employees transition from data entry to data analysis as automation takes over manual data entry and matching processes. This change frees them up to begin analyzing data trends and providing strategic insights instead, which allows them to play more active roles in improving financial processes.

With less time spent on tedious tasks, employees can also enhance their focus on vendor relationships. And, because they are able to build stronger connections with vendors, it fosters collaboration and enables more effective dispute resolution. 

It’s also worth mentioning the built-in compliance tools automation offers; they empower employees to monitor and uphold compliance standards more effectively and enhance their ability to reduce risk and ensure financial accuracy. 

In effect, by clarifying how roles evolve with automation, businesses can reassure employees that the new system will facilitate their professional growth, making the transition smoother.

AP Automation ROI as an Employee Motivator

Besides transforming work roles, the financial return on investment (ROI) from automation serves as a powerful motivator for AP teams. Automation reduces costs by minimizing the need for paper, storage, and manual labor, allowing these savings to be reinvested into the team for training, technology upgrades, and other resources. 

Faster payment cycles and automated workflows also expedite invoice approvals, making it easier to take advantage of early payment discounts. These cost savings benefit the business and can translate into bonuses or incentives for employees.

Moreover, real-time insights into payables enable finance teams to manage cash flow strategically, directly supporting the business’s growth and allowing the AP team to positively impact organizational success. 

Automation also supports long-term value creation, as it allows the AP team to handle increased workloads without additional strain as the business grows. This long-term efficiency not only supports job security but also enables the team to concentrate on high-impact activities.

Here are several ROI metrics to measure as you plan your AP automation strategy:

1). Average Processing Cost Per Invoice (CPI)

Each time your AP department processes an invoice, it costs your business money. But how important is cost per invoice? It’s important enough that this metric is the #1 KPI you should be tracking, as it’s going to reveal much about your AP department’s overall performance and level of efficiency.

To calculate your business’s Average Processing Cost Per Invoice, you need to divide total cost of paying invoices by the total number of invoices received and paid over a specific time period. Here is the formula:

Costs of Paying Invoices/Number of Invoices Received and Paid=

Average Processing Cost Per Invoice

Keep in mind that your CPI should include employee labor and benefits, software and associated services, office supplies, costs of mailing physical checks, and anything else it takes to move an invoice from receipt and verification to approval and payment.

2). Invoices Processed Per FTE Per Day

The number of invoices your AP staff can process per day is another key KPI for your business and knowing it will help you discover how efficient your AP staff members are. A general formula you can use to determine Invoices Processed Per FTE Per Day is:

Number of Invoices Processed Per Day/Number of FTEs Handling Invoices=

Invoices Processed Per FTE Per Day

When making this calculation, remember to factor in each individual employee’s duties, as some employees may be tasked with handling exceptions and non-PO invoices, which takes more time than just handling straight-through invoices.

While there’s no defined average for this KPI—in traditional manual workflows—it’s typical for an AP employee to be able to process about 5 invoices per hour. This means an AP employee using traditional manual workflows can process 800 to 1,000 invoices per month as long as the invoices are straight through and there are no errors or exceptions.

Once you’re aware of how many invoices your employees are processing per day, it’s also beneficial to examine:

• Which employees are your top processors.
• What tasks are giving employees the most problems.
• Which invoices are causing the most process problems, and from which suppliers.
• Who handles the most difficult AP tasks.

If you don’t have an AP automation solution for invoice and payment processing yet, it’s important to note that a good solution can actually double your employees’ processing volumes as well as provide an automated dashboard that gives deeper visibility into task completion.

3). Invoices Exception Rate

Invoice exceptions are some of the biggest challenges AP departments face on a day-to-day basis. Besides requiring human intervention, they increase invoice cycle times and can strain relationships with suppliers if not corrected.

At a core level, an invoice exception is often a communication error caused by things like incorrect data entry or data capture, the absence of a PO, a non-PO invoice, a data mismatch between an invoice and a PO, or bottlenecks in an approval workflow.

Fortunately, once you start keeping records of which types of exceptions are happening and where they’re coming from, you can begin finding ways to prevent them from occurring in the future.

Here’s how to calculate your Invoice Exception Rate:

Number of Exceptions/Total Invoices Processed X 100=

Invoice Exception Rate

The good news is that by using an AP automation solution, your team can process invoices automatically and with a high percentage of accuracy—therefore reducing or eliminating the errors that tend to result from manual processing. In turn, this will lower manual-based exception rates and improve team productivity.

By showcasing the ROI of automation, businesses can encourage their AP teams to view it not as a threat but as a value-generating tool that benefits both their roles and the organization as a whole.

AP Automation Adoption for Emoployees Begins with CloudX 

Adopting AP automation may require your AP team to learn new skills and adapt to evolving roles, but the long-term benefits make it well worth the effort. Overall, by addressing employees’ concerns, engaging them in the implementation process, and highlighting the tangible benefits, you will create a smoother transition and increase buy-in from your team.

When you’re ready to streamline your AP process with automation, consider partnering with CloudX. As your ongoing service partner, we provide comprehensive training to employees and have a support team available to assist employees with their ongoing needs.

For more information about CloudX’s APSmart and PAYSmart automation solutions, or to request a free demo, please fill out the online form here.