Growth and Optimization
Small Steps: The Key to Accounts Payable Automation
Your organization’s accounts payable (AP) department, while operating in the background to most, has an impact on many parts of your company’s operations. It’s responsible for reviewing invoices, issuing payments, and paying vendors on time. When your organization has effective AP processes, they can help you maximize your cashflow to execute on your larger business goals. Enter AP automation. Through optimizing AP processes, an automated AP solution helps provide your organization with the visibility and insights needed to see and understand exactly how much you’re spending and where to make better and more informed decisions, while successfully managing the timing of purchases and payments.
Most organizations know they need to automate their AP processes and reduce complexity but aren’t sure where or how to begin. Many assume it will be time consuming and complicated, but we’re here to tell you that’s not true. The reality is that your company can step into AP automation wherever you are today and take small steps to gradually transition into full AP automation over time—all at your own pace and flexible budget.
Here are the three most common stages organizations and AP teams find themselves in while on the path to AP automation:
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Manual, paper-based processes |
-The AP team deals with huge piles of paper invoices. -They usually physically walk invoices around to different people to get them approved and/or manually write checks. -They’re exhausted from all the manual effort and processes required to get invoices approved, issue payments, and pay vendors on time. |
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Some automation |
The AP team may… -Automate the data capture of invoices instead of relying on data entry. -Receive invoices through email, and even pass invoices back and forth through email for review and approval. -Use technology such as SharePoint to review and approve invoices. -Automate invoices in a particular document type.
They may have also started the process of layering in automation for workflows or parts of documents (such as non-PO invoices or certain types of check requests). If they are getting invoices via email, they may still be doing a lot of manual work, such as data entry and coding to record business transactions in the general ledger. |
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Full automation |
The AP team may use technology to automate, filter, and handle a majority of their AP transactions (i.e., around 75-80% of the AP process may be automated). Now, instead of manually handling invoice approvals, the team can spend their time resolving issues, ensuring vendors are paid on time, and negotiating with vendors for discounts. |
Small Steps Lead to Big Wins
- When you start where you are and take small steps over time it can lead to big wins such as:
- More time to think about your organization’s higher-level business goals.
- More visibility and insight into your employee spend.
- Improved payment strategy, so you can drive employee purchasing.
- Faster and more accurate reimbursements to employees and vendors.
- Increased opportunities to cash-in on early payment discounts and card program rebates.
- Improved AP cycle times, processing efficiency, budget compliance, and cashflow.
- The ability to maximize your supplier relationships and negotiate better rates.
- Increased revenue to the bottom-line.
All of that can make a huge difference to your business.
For information on the path and steps to AP automation, download the SAP Concur infographic “Small steps. Big wins. Step into Accounts Payable Automation
