CloudX Blog

Dispelling 3 Myths About AP Automation

Posted by Chris Cosgrove

Jul 6, 2017 3:01:35 PM

AP automation myths


I Want To Believe...

With today’s brief, we want to address three key myths that surround Accounts Payable automation. Given that our mission is to help businesses of all sizes to realize the benefits of efficient and automated document processing, the points we’re going to make shouldn’t really come as a surprise. With that said, we wanted to dispel these myths that exists concerning suppositions about AP automation, so let’s begin!

Accounts Payable Automation is costly!

While this may be a certainty if you’re deploying software locally, it’s not the case if you’re harnessing the power of a cloud-based delivery method. In fact, without having the up front burden and requisite capital investment that it takes to cover server hardware and software licenses, you can get the same or even better impacts from SaaS technology that comes with a price tag that is either transactional or a fraction of the cost of the deployed method.

We certainly won’t debate the fact that there are associated costs with deploying an automation approach of any kind, but the premise of either approach is that the juice from the automation will be worth the proverbial squeeze. This is why prior to any type of AP automation deployment should involve some kind of pre and post automation benchmarking and forecasting so you know exactly what you stand to gain and lose. The other truth that needs to be considered is the cost of doing nothing. For many businesses, inefficiency, poor visibility, and inability to hit process timeline deliverables (due dates, discount dates, etc) translates into numerous costs that bleed an organization.  But is not automating even really an option considering the muck and mire that is manual AP?

Accounts Payable automation takes a long time.

While this could be said of certain approaches, especially e-invoicing in our opinion, it is not necessarily true of all. Granted, deployment times vary for businesses of different size and scope, but in most cases AP automation can be realized in many businesses within a 3-6 month window. For most businesses engaging a typical AP automation approach, you can break down the major blocks of focus into a few categories: image conversion (advanced optical character recognition), workflow and business rules execution, integration and reporting. Going from zero to sixty so to speak, can be daunting especially if you have no track record of deploying these types of systems prior. Typically, systems like OCR and business intelligence or workflow management require lots of IT time to set up and additional time monitor on an ongoing basis. Because of that alone, many well-meaning organizations shy away from the effort required to automate.

However, by partnering with capable vendors or BPO type providers in this space, you can generally automate manual processes and deploy these types of approaches without having to reinvent the wheel and come up with all the answers on your own. In other words, as Sir Isaac Newton famously pointed out you can stand on the shoulders of giants to see (and go) further.

Accounts Payable automation is only for the largest companies.

It’s most certainly not that anymore by a long shot. It did used to be that because AP automation essentially meant having to have a big budget allocated or deep stacks of IT personnel that were able to support the cause, but in truth, with the numerous partnership channels and the SaaS delivery model, it’s for businesses of all size. Further, for the providers that have integrated payments as an ancillary offering, the monetization piece of the puzzle is something that scales both down and up. Essentially then whether you’re big or small you’ll still get the same relative bang for the effort and therefore it’s not something that should be brushed aside because the notion of it seems beyond reach.


Well, the good news is that none of these barriers are impediments to AP automation for businesses of any size, so you can be liberated to pursue automation like you've always wanted!

Check out the ebook below to learn how to maximize the value of Accounts Payable to your business!

Download The Four Keys To Maximizing The Strategic Value of Accounts Payable



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Topics: Accounts Payable Automation, ap automation

B2B Payments - The Tip Of The Spear To Transforming The Accounts Payable Process!

Posted by Chris Cosgrove

Mar 21, 2017 3:34:53 PM

Harness B2B ePayments as the tip of the spear to AP automation!

Let's set the record straight!

The primary reason for writing this post today is to confound traditional thinking in a space that is befuddled by many discordant voices in the market.  For about 99% of the market, the voices competing for attention are focused on one of two agendas: a. Cutting cost and b. Driving efficiency.  While these are great, the sad reality is that for the many would be clients of Accounts Payable automation or other AP improvement initiatives, a significant percentage of them scrap their plans for internal improvement.  The reason that this happens is generally centered around one or two thoughts: a. This costs too much (and we won’t ever see a worthwhile return) or b. I don’t have the people necessary to pull this off.  Either way, in many cases, companies who have set out on the hopeful path to improvement often depart the trail when the going gets a little rough and instead choose to remain mired in the status quo, which as we’ve evidenced here is costly and lackluster.

So let’s define the tip of the spear before we go any farther.  According to it can mean the following:

* At the very center of harm's way (ex: "The Bomb Squad is at the Tip of

the Spear against the Neo-Nazis")

* The cutting/deadly edge (ex: "The new PULVERIZER 3000, will be the Tip

of the Spear in Homeland Defense)

* The leading unit of an attack/engagement (ex: The battleship, USS

Smackdown, will be the Tip of the Spear when we engage the enemies


For the sake of what we’re discussing today we’re going to go with option three.  


From the standpoint of Accounts Payable process improvements, every CFO, Treasurer, Controller, Accounting Director, and VP of Finance who has their hands involved in both the strategic aspects of Accounts Payable and oversight of the operation complexities associated with invoice processing and timely payment executions should take heed to what is about to be said... as in right now.

If you are not monetizing your payment stream you are missing the boat entirely.

This is doubly true if you are one of the businesses that have previously looked at AP automation or eInvoicing solutions and come to the conclusion that the investment to improve your business did not have a significant enough use case to warrant making it.  If you embrace what we’re covering here then you may have immediate cause to reconsider the merits of automation knowing that you may have overlooked a sustainable and sizable stream of cash that has been untapped in your current business.

Through B2B payments, and more specifically virtual card payments, you can monetize your payment stream in a fashion that you may never have.  In fact if you’re paying old school via checks, wire, or ACH, every one of those mechanism costs to execute.  Granted, some cost way more than others, but none of them bring or keep any cash in your organization, so if those are your best and only options then try to minimize the bleeding by pursuing the most efficient methods.  However, if you’re open to forward thinking you can partner with companies who will evangelize the virtual payment method (which is readily accepted at about 25-30% of most B2B enterprises, and growing) and bring new monies into your coffers.


Get a W on the board!

By getting a win and creating momentum in your back office, along with the new cash stream, you can generate enough in rebates to offset even grandiose capital investments that can be leveraged into fancy automation systems, where that was previously impossible.  However, and again this is targeted to the folks who consider themselves smarty-pants, there are better approaches than huge up front capital investment plays to deploying Accounts Payable process improvement technologies.  The gist of what we want to get across to you today is that payment monetization represents the lowest hanging fruit available to you from a monetary and process improvement standpoint.  By garnering the benefits available and the perpetual rebate stream afforded by the cash rebates of virtual payments, you can take hold of your process and then pursue the more prickly initiatives like AP invoice processing transformation or eInvoicing.  Which is a better approach? Well, we go through that here, but suffice it to say that is subjective…

If you haven’t taken the time to evaluate the upside of ePayments, it would behoove you to look at your monetization potential in a new light, and then make determinations about whether that makes sense for your enterprise.

Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Process, Accounts Payable Automation, accounts payable software, epayments, b2b payments

Leveraging B2B Payments To Drive Value

Posted by Chris Cosgrove

Mar 14, 2017 12:58:46 PM

Pursuing a winning B2B payments strategy is paramount!

Identifying Value Is Key

CFO’s and Controllers the world over are pressed with making difficult decisions for their businesses.  While obviously leading the charge over day to day financial activities within their organization, it’s more of a necessity to be a value contributor to the organization itself, and as such, these fiscal leaders are consistently looked to as a means to create vision and set direction in the mid and long term in an effort to create maximum business value.  These activities can translate from the daily operational load of accounting teams to treasury and risk management strategies to tax and audit duties to many other areas.  One that is continuously evolving and where we’d like to focus our attention on today is the area of B2B payments.

So much is changing so fast in today’s digital economy that it can be difficult to keep pace with emerging technology.  No sooner does a technology get invented and deployed than newer, alternative tech is out there making waves.  It can be very daunting to be a finance leader whose decision making can have far reaching consequences within the business itself immediately and with long term implications.  With that said, we want to focus today on how B2B payments can be harnessed as a value creation mechanism.  The old days of thinking that a payment is a payment and therefore really only a liability to a business are over.  Savvy finance professionals recognize the two-edged nature of payments, which we’ll get into in a moment.

The Two-Edges to B2B Payments

It is accurate that a payment is a liability on the balance sheet, but if that is the only understanding of payments, it’s woefully outdated.  Because payments are often perceived in this fashion they get little fanfare in terms of executive attention, yet they represent one of the most worthy areas of opportunity within the financial back office.  For starters, simply converting existing B2B payment methods from old school approaches like traditional check cutting to more modern wire or ACH transactions yields the immediate benefit of cost slashing.  According to The Accounts Payable Network, the average cost to process a check is $5.14.  Therefore, using that as a multiple, a company that is cutting 1,000 of those a month is spending $5,140 just to get their payments in the mail, which is not even factoring the cost to process the invoice that had to be matched or approved to get it ready to be paid!  Switching to a method like ACH can drop that cost by upwards of 80%.  So, if you’ve yet to even consider the ramifications of that in your business, you owe it to yourself and your company to dig a little deeper and discover what’s possible.  As far as edges are concerned this is really dealing with the cost edge associated with payments, but on the flip side, you have the profit edge, which seems oxymoronic in some ways, but is nonetheless true.

For really forward thinking Finance leaders, you can go waaay beyond cost cutting and move your payables process forward to be a profit generator to your business.  This can be done via updated payment methodology such as in virtual card payments.  Using these single use virtual credit card transactions, which are highly secure, you can pay one or many invoices to a vendor and cash in on the available rebate stream afforded through transaction interchange.  That being said, many more suppliers are willing to accept the merchant fees associated with card transactions as a means to provide their customers with greater payment flexibility and in an effort to bring cash into their businesses faster.  The upshot of this is that you can literally tap into a newfound profit stream in your back office, which is unheard of in most traditional Accounts Payable processes.  As an example, if your average payable is $1,000 and you’re receiving a 1% cash rebate for paying via virtual card, then you’re business is intaking $10 for that transaction instead of paying via check (which are highly susceptible to fraud scenarios) and costing your business $5+.  This is a net swing of $15 per transaction successfully converted to virtual payment methods (and a tidy return if we might add).  Now it would be foolhardy to think you could convert 100% of your payment traffic to this method, but a conservative estimate of 25% of it is well within reach which can mean a solid contribution financially to the health of your business.  Also, many businesses have average invoice amounts much higher than $1,000 per transaction so the gains are scalable relative to your actual spend.

Either way, the monetization of your B2B payments can be the beginning of value creation within your financial back office processes.  Many other efforts to automate or otherwise improve areas like Accounts Payable invoice processing fall flat on their face due to high capital investment costs or other resource constraints.  To our thinking pursuing an ePayments strategy within the confines of your existing B2B payments stream is the ideal way to generate a win for the business from a momentum and a cashflow standpoint.  This type of win can and should get you on the path to winning at AP, which we discuss more over here!


Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Process, Accounts Payable Automation, epayments, b2b payments

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