Did you know that to experience the benefits of accounts payable (AP) automation, you don’t need to dive into a fully-featured solution all at once? Studies show that even automating small pieces of the AP process at a time could still have a significant positive impact on the efficiency of your operations.
Ideally, your approach to automating should be tailored to your company, so it’s best to start with an assessment of your current processes. By identifying specific pain points, you’ll have a clearer picture of how you can improve them with automation.
But how do you know which AP pain points to focus on first? And furthermore, how can you ensure that your automated procedures are robust enough to properly address them? That’s what we’re here to help you with. Let’s take a look at five AP automation best practices that will help you get the most out of your investment.
1. Map out your existing workflows
AP automation has the potential to change the way your company works, regardless of its size, industry, or function. But if your business processes aren’t accurately documented before implementation, automation can only do so much.
Start by examining your existing invoice workflows to better understand the complexities of your business operations and how you can optimize them. You’ll need a clear image of processing times, the volume of paper documents entering your company each month, the mix between paper and electronic invoices, error rates, costs, and the number of employees involved in each step of the process. Make sure that the people directly involved in AP contribute to this evaluation; high-level managers don’t always have a clear picture of day-to-day activities. Talk to your employees on the ground to help you establish tangible metrics on invoice workflows. That way you can target the most costly processes first, and track the benefits and performance of your AP department over time.
2. Be proactive about training and onboarding
AP automation can help resolve many operational issues inside the department. But if your employees aren’t ready to embrace change, you might experience challenges getting everyone to adhere to the new procedures. If implemented correctly, AP automation should come as a windfall to your employees. Accurate, rapid payment processing will lead to fewer vendor disputes and less time spent managing paper. That means your employees can spend more time doing their job, and less time on the phone with angry suppliers.
To make the rollout easier, discuss the new protocols with your team, train employees on how to work with the new tools, and keep an eye open to make sure they’re not bypassing specific protocols. If you’re partnering with a document management company to implement workflow automation software, they should offer training for you and your employees, as well as ongoing support of the software.
Ensuring that every employee is trained and comfortable will cement the success, and therefore longevity, of your automated AP system.
3. Make sure your new system is futureproof
Another AP automation best practice is to ensure the platform you choose is futureproof, or easily scalable as your business grows, without significant upgrade costs. You don’t want to incur capital expenses as your AP needs expand with your business. Avoid those costs by working with a partner that offers flexible pricing, and can manage documents and automate workflows using cloud-based software.
Cloud-based document management and workflow automation software often use pay-as-you-go pricing, meaning you only pay for the storage you actually use. You can add more storage at any time just by connecting with your software partner. Cloud-based services also require little to no on-site maintenance since there’s no hardware involved—everything is handled on your software partner’s end.
In addition, the implementation won’t disrupt your existing invoice workflows. All you need to do is work with your document management partner to integrate your ERP and/or CRM system with your new workflow automation software.
4. Get suppliers on board
According to research by PayStream Advisors, AP automation success in your business also depends on your supplier base and whether the vendors are willing to adapt to your new AP procedures. If you have good relationships with your suppliers and generally make large purchase orders, they should be happy to update your invoice routing.
PayStream’s research also finds that most suppliers comply frictionlessly with changes like these thanks to the benefits of working with a company with automated AP, which include faster processing times and more accurate payments. Just make sure you communicate early so that your suppliers are prepared.
If you’re adopting a digital mailroom, it’s even easier to get suppliers on board with your new procedures. Whether they prefer to use paper or email invoices, all they’ll need to do is update their invoicing system to reflect your new, centralized PO box or email inbox—there’s no need for them to change the way they issue invoices at all!
5. Choose an AP automation approach that fits your budget
When you’re thinking about automating your accounts payable process, it’s easy to overestimate the upstart costs. You may be asking yourself, “Will I have to install all new servers and hardware? What will it take to scan and digitize all my paper invoices and process my emails?”
Luckily, AP automation doesn’t have to be expensive, nor does it have to involve capital investments to be cost effective. The cost of manually processing an invoice is about $15 on average. That falls to $2.50 when using automation software; the software processes most of the invoices automatically, meaning your staff need only manage the exceptions. Based on that savings, companies typically see a full return on their investment within one year.
Better yet, you can also choose AP systems that reflect your company’s specific financial needs. Cloud-based workflow platforms, in particular, are very low-risk since they don’t involve on-site IT costs, and service fees are typically based on volume, turnaround time, and index levels. Potential automation partners should provide helpful demos and walkthroughs that enable you to envision how AP automation would integrate with your current processes before making a purchasing decision.
Set up a well-oiled payment machine by following AP automation best practices
To recap the steps in following AP automation best practices:
- Work with your team to examine existing invoice workflows and target inefficiencies
- Explain the benefits to your team and get them on board with training
- Make sure the platform you choose is scalable and futureproof
- Communicate with your suppliers
- Work within your budget and prioritize high-impact workflow improvements
For most companies, the immediate effect of implementing AP automation is relief; invoices are a lot to manage, and having a reliable system in place to handle them for you is a load off. But it takes strategy and an experienced partner to realize that benefit. Once you do, you’ll soon enjoy more rapid and accurate payments and more time to spend on business-critical tasks.
For help with finding a partner that can deliver the most value for your automation efforts, download our free guide on what to look for in an AP automation company.