Few accounts payable (AP) leaders need to be convinced about the benefits of automation.
- Less keying of invoice data
- No guessing who needs to approve an invoice
- No more pushing paper and chasing down information
- Less time wasted fixing errors and mistakes
- Fewer calls and e-mails from suppliers about the status of things
- Better operational control, no matter where staff work
Despite these compelling benefits, many proposals to deploy an automated invoice processing solution, or to refresh existing AP technology, never win the approval of senior management.
Few AP automation projects will ever reach the starting point without senior management approval.
Senior managers cite lots of reasons for being skeptical of AP automation proposals:
- The mistaken belief that existing AP processes are good enough
- Competing priorities for capital resources
- Skepticism that a solution can meet their AP processing needs
- Fear of a long and risky implementation process with hidden costs
But the top reason that many senior managers haven’t bought into the idea of deploying invoice processing software, is that the case for AP automation was presented in terms that matter to them.
Show senior management how AP automation will address their top priorities and concerns and your plan to deploy an invoice processing solution is more likely to win their strong approval.
So, how can AP automation help with what’s keeping senior management up at night?
- Cashflow. Cashflow means more in turbulent times like these. AP automation helps businesses of all sizes optimize their working capital. Digital workflows accelerate invoice approvals, helping businesses avoid late payment penalties and capture more early payment discounts. Seamless integration with ERP and accounting systems gets invoice data downstream faster. Real-time reporting enables decision-makers to instantly see where accruals stand and drill down into data to uncover cash flow trends and potential issues. And paying suppliers with virtual cards enables a buyer to potentially extend its Day’s Payable Outstanding (DPO) by weeks, without changing existing payment terms.
- Spending. Businesses cannot afford disruptions to their global supply chain. AP automation solutions make it easy to manage spending. Automated general ledger coding ensures that purchases are allocated correctly. Instant access to invoice data provides decision-makers with visibility into metrics such as spending by the supplier, category, and business unit – and they can see how that compares to historical data. The seamless upload of invoice data downstream helps line of business managers track performance against budgets. And payments to suppliers made electronically can be reconciled in an ERP in real-time.
- Operational performance. Every business wants to do more with less. AP automation eliminates the manual, repetitive tasks that bog staff down. Invoices are automatically gathered from email boxes, supplier portals, FTP upload landing sites and other channels. Invoice header and line-item data such as the invoice number, supplier name, and product description are extracted with a high degree of accuracy and matched against purchase order and proof-of-delivery information residing in an accounting system or ERP. Unmatched invoices or invoices requiring approval (such as high-dollar invoices or invoices from strategic suppliers) are digitally routed based on pre-configured business rules. And approved invoices are posted directly to an ERP or accounting system without the need for double-keying. Eliminating manual tasks reduces invoice processing costs, increases staff productivity, and frees staff to focus more time on higher-value activities that drive growth.
- Risk. Fraud and compliance issues can result in fines, penalties, reputational damage, wasted staff time, and financial loss. AP automation enables businesses to process invoices in a controlled, auditable, and transparent manner, no matter where staff work. The technology restricts access based on role, enforces separation of duties, ensures chain of custody, logs all actions taken on an invoice, retains documents and data based on pre-set schedules, and provides senior management with real-time visibility into the status of all invoices. Some solutions even use artificial intelligence (AI) technology to flag suspicious transactions. And paying suppliers electronically is less likely to result in fraud than checks, studies show.
Including these benefits in your AP automation proposal is sure to win the approval of management.
Wednesday, May 4, 2022