Type AP automation into google trends, and you will see a sharp increase in search queries over the last year (almost double). Enterprises no longer need convincing that automating tasks and automating payments improves organizational efficiency and saves time and money.
Research shows that by implementing technology, AP can process a single invoice with the following:
76% lower cost
81% faster speed
60% lower exception rate
The fact is, more often than not, account payable automation software pays for itself within as little as 6 to 18 months. However, it’s best to do it right the first time. Here we examine the four mistakes to avoid when moving to AR and AP automation.
Mistake 1: Not prioritizing “Must-Haves”
It is essential to know and prioritize the must-have benefits to ensure the right pain points are addressed.
What to do
Make a list of non-negotiable features that the software must have to complement the business and accounting process. For example, if the focus is workload management, choosing an AR and AP software that enables accountants to manage large numbers of invoices will be most beneficial.
What not to do
Don’t skip this step. When companies skip this step, more often than not, they choose software that doesn’t solve their biggest problems and tend to run into a host of other issues. Don’t forget to - Test the adaptability of the software during the software vendor demonstration to confirm that it will solve the company’s problems. And ensure that the chosen software is compatible with all invoices and accounting workflows.
Mistake 2: Not Ensuring Software Compatibility
How well does the AR/AP automation technology software integrate with the current Enterprise Resourcing Planning (ERP) system?
What to Consider
Any limitations on ERP software, the technical compatibility of the software and if or what upgrades are required for successful integration. If the software you purchase does not seamlessly transfer data from the accounting and ERP systems, your automation AP system will still be inefficient and create more problems for you in the long run. Find it out - During the trial phase, test how the accounting software solutions automatically upload invoices and supporting documents directly into the ERP system. A process that runs smoothly ensures time saved on manual data entry, in turn saving the company money.
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Mistake 3: Not Gaining Internal Stakeholder Buy-In
It’s essential to get everyone on board both at the start and throughout the entire process. Moving to AR and AP Automation is an exciting endeavour and will prove significantly valuable for the organization. Don’t underestimate the importance of communicating with key stakeholders regarding AP automation, how it will benefit the company, and how the change will positively impact their jobs.
What to do
From project conception throughout the AR and AP automation process, involve the entire accounting team by openly sharing the value and benefits with key stakeholders. Gain their feedback, ask for insights, and, where appropriate, include them in the decision-making process.
Outline the benefits
The wins for the organization, time and costs saved, can easily be translated into wins for the team. Forget mundane, tedious tasks; no more burdensome manual processes, all that time saved can be poured into more rewarding endeavours with a higher ROI.
“Before automation, the process was archaic. When you consider how payment processing was done in the “good ole days.” We would send them a list and someone would manually enter every payment into the system. Our supervisors would lose anywhere from two an hour and a half to four completing NSF reconciliations every Monday morning. It is hard to believe this is common practice in the industry.”
Lending Industry, CEO
Good to note
If possible, train all of the accounting team on the new software in case one person resigns or has a medical issue; it’s not ideal to remain dependent on one or two people to keep the software running smoothly.
Mistake 4: Focusing On Today and Not Tomorrow
With various technologies in play, things move faster than ever before. What was considered nice to have in the pre-pandemic years has become a must-have today. That’s not going to stop. Companies need to look at it five to ten years into the future.
What to do
When selecting a new AP automation solution, organizations need to consider the long-term benefits and features of the software. A provider’s roadmap will determine whether the software provider will continue innovating and staying on top of industry changes.
Questions to ask:
Will the software likely meet the company’s needs in the next five years?
Is it scalable?
Will the software scale with the current growth trajectory?
Does the provider’s roadmap indicate trends?
Bringing the AP Automation Software Integration To Life
One problem that enterprises consistently encounter is switching their AR (Accounts Receivable) and AP (Accounts Payable) to a digital system. Going from a paper-based system to a digital one can be overwhelming. Even though paper-based processes are slow and costly, many accounting departments still use Excel spreadsheets and Word documents to manage and track payments.
Automate electronic payments for full-cycle AP automation. Eliminating the manual work of vendor payments—like signing and mailing physical cheques—can bring the process full circle to achieve higher data visibility and control.
Businesses say these four time-consuming accounting processes eat up their output and resources.
44% Balance sheet account reconciliations
39% Variance analysis
36% Bank and credit card reconciliations
28% Journal entry creation
Having a built-in payment system changes that. VoPay makes it easy for B2B finance teams to stay ahead of Accounts Receivable and Accounts Payable. Remove the friction and optimize the payment process. With a simple API integration, clients gain access to all payment rails and manage payments and collections—from one central location with complete end-to-end visibility.
Help your business grow with digital payments and collections. Contact us today!
