CloudX Blog

5 Free Tips on Successful Accounts Payable Automation

Posted by Chris Cosgrove

Jun 11, 2013 1:37:00 PM

Why Accounts Payable Automation is Not One Size Fits All!

Unlike your kid’s little league baseball hat, in the world of AP automation software, one size definitely does not fit all. 

 

With that said, there are many considerations that go into the buying decision to select and implement Accounts Payable software that is ideally suited for your business.  The needs of AP are definitely horizontal, but scale becomes a major factor as your invoice count increases, and as such different tools and components to robust automation solutions need to be considered.

 

So here’s a short hit lits of 5 tips to choosing the best Accounts Payable automation software for your business:

 

  1. Invoice Volume Determines True Needs - What does your monthly Accounts Payable invoice volume look like.? Low could be in the ballpark of 0-500 invoices per month, and in that range would generally necessitate no more than 1-2 AP clerks to process.  Mid range organizations could be anywhere between 500-5000 invoices, per month and the high volume organizations at 5,000+.  For the outliers who are in the ‘Fortune 1000’ scene this number can easily climb into the tens and hundreds of thousands per month.  The point is the lower your volume, the less the need exists for fancier technology like Optical Character Recognition.
  2. What’s your capital investment budget?  - No, this is not a joke.  Seriously, what do you have available to invest in automating your process?  For most organizations, getting funds to bring Accounts Payable automation tools is tough, but BPO and SaaS offerings are making this a reality for more businesses.  Consider the rise of tools from companies like Google, more specifically Google Apps for Business, and the encroachment that has had on legacy software companies like Microsoft and their Office suite.  The same shift is true of niche AP software, so take heart if you don’t have dollars…transactional models are making paths in the wilderness available to you.
  3. Unite the clans! – To implement any new system it’s absolutely mission critical to have departmental sponsorship.  Chances are though that you wouldn’t even be selecting Accounts Payable automation tools unless you had sponsorship at the department level, but what’s really important is to get the organization as a whole on your side, and that is an art form.  By educating other department heads and executives on the benefits to them and to the company as a whole, along with the kicker, how this will make their lives easier and better, you’ll be in a better position to get the user adoption you need from your organization GL coders, approvers, and users.   Don’t make the investment in Accounts Payable automation resources until you’ve got both Executive and Departmental buy-in, or you’ll be setting up for failure.
  4. Abandon the miracle diet mantra! – No, we’re not here to help you lose 20 pounds in 10 days.  Similarly, affecting wholesale change is generally not an overnight proposition on any level, especially Accounts Payable automation.  So, it’s critical to get rid of the infomerciaesque sales pitch of promising the moon in no time flat.  Instead, set about a steady progression of improvement by selecting an implementation plan that is workable by vendor, department, or invoice type.
  5. Accommodate your vendors, don’t force them to change! – While e-Invoicing has been touted as a radically different and novel approach to improving Procurement and Payment woes the world over, adoption of the technology lags far behind the prevalence of paper based or paper imaged invoices.  The reason...? Suppliers don’t want to be forced to do something that requires a lot of effort.  With that said, what is your current practice?  If new Accounts Payable automation technology requires you to get your supplier base to forcibly adopt your process…good luck.  Unless you’re Professor X, good luck getting them to comply.  Instead, improve the process by giving them options in working with  your new automation platform.  One way…Vendor Portal technology...which can offer multiple ways to upload invoices and a secure view to accessing their invoices while in the approval process.

 

 

We hope this helps you make some better decisions as you move forward with improving your Accounts Payable process.

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Topics: Accounts Payable Process, Accounts Payable Automation, Improve Accounts Payable, accounts payable software, Invoice Processing, ap software, ap automation

3 Ways AP Automation & BPO Practices Creates Win-Wins All Around

Posted by Chris Cosgrove

May 13, 2013 10:41:00 AM

AP Automation .... winning! 


There’s been some recent coverage of the sustained rise of the Business Process Outsourcing market globally along with the impacts that the sustained growth has had upon second and third world countries where BPO services are provided.  According to industry data, global spending on BPO services is forecasted to exceed $25 Billion dollars in 2013.  The obvious reasons for this growth include the favorable cost benefits of BPO services in addition to a renewed ability for organizations to divest themselves of non-core responsibilities and instead concentrate their efforts upon focal areas.

 

With that said, there are additional ways by which everyone wins when you blend proven Accounts Payable automation strategies with BPO operations.

Here they are:

  1. Decrease risks of Fraud – By centralizing your process and utilizing technology to perform validation and reconciliation processes automatically, you can reduce the chances of malevolent activity within your Finance ranks.  We discuss this at length here, but anytime you have a variety of seemingly innocuous transactions that fit a certain profile occurring, it could be indicative of fraud elements within your organization.  By relying upon a third party engagement to assist you in process transformation, you decrease the risk of internal collusion and people operating in their own self interests.

  2. Promote Global Economic Development – For many countries, especially those classified as second and third world, the opportunity for BPO service providers abound due to a confluence of factors: favorable labor rates, low overhead, and increasingly reliable technology infrastructures.  This is no secret, and as we’ve seen in the past 20 years, many major global enterprises have flocked to traditionally strong BPO bastions like India.  However, because of the success of pioneering BPO centers in areas like Bangalore, Mumbai, and Hyderabad, there a slew of other countries throwing their hats in the ring to compete in these areas.  Other notable nations include the Philippines (which as of 2010 surpassed India in terms of dollar volume for BPO engagements), China, Singapore,  Ethiopia, South Africa, and many others.  Responsible BPO providers recognize the impact that their companies can have on local economies from a cash flow perspective, but also from a personal development perspective, literally providing  empowerment and training to those who otherwise may not be able to obtain instruction as readily as those in the first and second world countries.

  3. Focus on Innovation – One of the remarkable things about world class companies like 3M is their remarkable ability to innovate in products and services development across a broad representation of industries.  This is absolutely trace-able back to their specific and focused re-investment of time in research and development.    To quote Mike Shultz of Digital Spark Marketing, “Long before Google gave its engineers one day a week to pursue their own ideas, 3M let its researchers do the same with up to 15% of their time.”  If more organizations had more time from their best resources to invest in strategic functions, the result would be real innovation within their process.  Granted that improving the Accounts Payable process is not likely to produce a top-line revenue generating product or service, but it will create a leaner and meaner invoice processing back office, which in turn will contribute to profitable operations and pleasant customer service.

While we think adopting a cloud-based Document Process Outsourcing approach is the trend that more businesses will adopt in the next ten years, it’s not for everyone.  One of the issues that many business leaders take exception with a BPO/DPO approach is the risk it opens its organization up to from a network security and privacy standpoint.  However, there are many methods for securing corporate data and this is generally not a show-stopper for most businesses.

To learn more about Accounts Payable best practices, and why cloud based Accounts Payable software is making AP Automation a reality for companies of all sizes, check out our eBook below!

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Topics: Accounts Payable Process, Accounts Payable Automation, accounts payable software, document process outsourcing, Invoice Processing, accounts payable best practices, ap software, accounts payable outsourcing, accounts payable fraud

Bridging AP Automation Communication Barriers Between Finance & IT

Posted by Chris Cosgrove

Apr 16, 2013 4:40:00 PM

 Getting rid of AP Automation communication issues between departments is clutch!

That Dog Ain't Gonna Hunt!

One of the most critically acclaimed World War II film productions has got to be Band of Brothers, produced by HBO in 2001 and based upon the same-titled best selling book by fabled historian Steven Ambrose.  In the initial episode, a classic prank is pulled by an entire platoon of soldiers upon their over-bearing and heartless company Captain as a means to show their disapproval of his leadership and decision making process.  One of the soldiers, Sargent Donald Malarkey, tricks Captain Sobel into thinking that Malarkey, who is unseen to Sobel in the woods, is actually his commanding officer.  Malarkey, using master impersonation skills directs Sobel to cut cow fences in order to advance the progress of his platoon much to the delight of his comrades.  In it he uses a fantastic expression to convey the fruitlessness of Sobel’s command decisions stating that “that dog just ain’t gonna hunt!”, and in so-doing compels him to take an action that ultimately mortifies him in the sight of his peers.  Now with that said, you really need to see it to enjoy it, but it serves a purpose for our conversation today.

 

Sometimes it’s evident as we approach systems implementations and vendor selection processes that certain dogs ain’t gonna hunt.   A perfect example of this just happened in the course of our conversations this week with a potential customer.  Now up to this point we’ve discoursed extensively with their Finance leaders and Accounts Payable staff, though when the subject Accounts Payable automation project was broached with their IT leaders, all of a sudden alarm bells start going off, which is interesting but hardly surprising. 

 

Some of the common concerns tend to lie in a few repetitious areas:

 
  1. We’ve already invested in systems (let’s say document imaging to continue with the exact scenario).  To be sure, extending systems that are functional and provide business advantage is highly to be desired.  No CIO in their right mind is going to want to bring in a redundant system.  But to quote Shakespeare…there’s the rub!  In the situation that unfolded today, it became very evident that when one department is speaking apples, another department is hearing oranges.
  2. We’re overburdened with other projects.  Not to say that this one came up today, but it is to say that it underscores the need to stack rank and score projects based upon fiscal impacts, investment requirements, achievability, timelines, and resource constraints.  More on evaluating projects here!
  3. This has to integrate to our core systems.  This really shouldn’t come as a revelation, but it’s a requisite for any sound-minded corporate leader.  Of course new systems have to work together and that is precisely why integration shops that tie core systems together do so well. Just look at all the development activity around platforms like Salesforce, SAP, & Oracle.

 

The question is why is IT often viewed as the buzz-killer of project deployments, when they are the very linchpin in many cases for managing projects and making systems work.  

 

To be sure proposing  Accounts  Payable software deployment is a heady subject and one that requires extensive planning and expertise to execute upon.  That being said to point #1 above, and the whole apples vs. oranges issue, in the case of our the client discussion today, it became evident that IT really had no working understanding of the intricacies of the Accounts Payable process.  Now, it’s understandable in their particular context, being a large hospital and as we’ve covered in our Healthcare eBook here, that IT spend and attention typically gets diverted to clinical systems (EHR, digital radiology, etc.) as opposed to back office.  But more to the point, there was a complete lack of awareness of invoice processing and the requisite data entry, validation, routing, and exception handling components.  Invoices are, as you well know, transactional documents that require interaction, not just some static data carrier that can just get plunked away for safe keeping.  Ironically, this type of an approach (archival) without addressing the processing issues, really doesn’t improve the AP process, and actually ends up adding costs to the process.

 

So, as a response to this our recommendation is to always clearly define and articulate the scope of new projects along with providing compelling business cases and benchmarking studies to determine where you are prior to an initiative and thereby create a vision for the improved state.  Typically this, along with an educational component, or should we say interpretation process, can help make sure that the items in discussion are meaningful to all parties, especially those who may not have subject matter or process expertise.

 

 

To learn more about Accounts Payable best practices and whether cloud based AP software is right for you, check out the eBook below!

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Topics: Accounts Payable Process, AP Process, Accounts Payable Automation, Improve Accounts Payable, ap system, accounts payable software, Invoice Processing, accounts payable best practices, ap software, accounts payable outsourcing, Accounts Payable Solutions

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