The Dirty Secrets of AP Automation

Let me tell you a dirty little secret of procure to pay: solution providers aren’t telling you everything about their AP automation capabilities. The purpose of implementing an AP automation solution is to make your company’s AP processes as transparent and efficient as possible, freeing up your resources to focus on business intelligence, spend optimization and other value-added-services. The benefits of transitioning to AP automation are undisputed, but you need to know the little secrets to evaluate which solution will work best for your business. Obstacles arise because of one simple factor: all the cost efficiencies in the business plan are assuming you get 100% of your purchasing and accounts payable (AP) transactions running through the system, and most P2P systems cannot accomplish that level of automation. Evaluating which P2P solution will actually help your organization achieve its goals starts with asking the right questions.

Does the solution…

• Capture and automate 100% of orders and invoices?

When implementing an AP automation solution, one of the biggest questions is of spend visibility – it needs to capture the whole picture, not just a part. Suppliers come in all shapes and sizes; Therefore, it is essential that the AP system be compatible with statements from your commercial bank and invoices generated by Bob’s one-man bricklaying service. Capturing all your invoices requires the solution to be compatible with all types of invoices regardless of format or type, including paper, electronic, EDI/XML, PDF, etc., covering direct, indirect, PO, Non-PO and facilities and contingent services invoices. An AP automation solution doesn’t pass square one until you’re seeing the whole transactional picture for your business.

• Become paperless from day one?

Great, so the solution is compatible with all the invoice types received by your business, but…how long will it take to get up to speed? While many providers promise the transition to completely paperless e-invoicing, few can implement the transition immediately. Often, it takes days to onboard existing paper processes (these are days most organizations don’t have). That’s why it’s important to consider solutions that can make the change from the start. Is it a manual process where the solution provider must build a framework for each invoice category, or does it have a versatile framework that it can use immediately? Implementing new systems can be a risky process – don’t let a lengthy transition time add to that risk.

• Integrate with your ERP systems?

AP automation solutions must be compatible with your organization’s ERP system to avoid costly and time-consuming integration projects. When looking at solution providers, examine which ERP systems it supports and if the solution supports interoperability between multiple, disparate ERP systems.

• Handle invoices from all geographies with different languages and tax regulations?

While some solutions might work well in one market, global businesses must carefully examine how the AP automation solution will operate when forced to reconcile data from different countries with different languages and tax regulations. When looking for a solution provider, look carefully at their customer profile and service markets. Solution providers that service multinational enterprises need to have geographic and linguistic flexibility within their platform. If the provider doesn’t support the language or geo you do business in, it’s also beneficial to ask the provider if they have the capacity to add languages or countries to their portfolio.

• Have a centralized, secure and easily searchable invoice archiving functionality with built-in local compliance support?

AP automation solutions that are versatile and compatible with your business’s needs also need to have outstanding archiving and compliance capabilities. As transactional data is stored, it also must be easily accessible and compliant for auditing purposes. Look for solutions that have intuitively searchable archiving systems that ensure records are legally stored and VAT compliant for all the companies in which you operate.

There are some great AP automation solution providers on the market, but it is all about finding the right match for your business by considering the strengths and weakness of each. While the providers won’t exactly jump out and talk about their weaknesses, these questions will help you get at those little secrets that have burned many organizations in the past. After all, it’s better to get under the hood than just kick the tires.

Eric Wilson, VP of Purchase-to-Pay, Basware

Basware is the global leader in providing networked purchase-to-pay solutions, e-invoicing and innovative financing services. Basware’s commerce and financing network connects businesses in over 100 countries and territories around the globe. As the largest open business network in the world, Basware provides scale and reach for organizations of all sizes, enabling them to grow their business and unlock value across their operations by simplifying and streamlining financial processes.