Choosing the Right Accounts Payable Automation Solution
Automating the accounts payable process is not always an easy task—even if it is likely to lead to more cost-effective channels of payment and receipt. To choose the most suitable accounts payable automation solution, a number of factors should be taken into account.
Cost of Solution
As with any complex technological purchase, cost is one of the key factors to consider. Often, the early phase budget is the main reason for considering certain providers over others. As accounts payable automation solutions sometimes carry extra license or subscription charges, AP organizations should take the overall price, in addition to overall savings, into account when making a final decision.
Means of Transfer
The cost allocation also has an influence on whether the company opts for software which is implemented on-site, or software which is cloud-based. In addition to the AP department, IT may have their own needs or preference that can have an effect on what kind of accounts payable automation solution is chosen. Because of this important factor, it’s a good idea to bring the IT department into the conversation early, and let its members participate at all stages.
On-Site Installation Solution vs. Cloud-Based Solution
Automation that requires on-site installation of software needs significant input from IT experts, and/or a third-party system integrator. This software is likely to carry a heftier license charge, but it enables constant utilization of its resources. With on-site installations, the “teething” period can be quite lengthy. The whole infrastructure needs to be created; this includes hardware configurations and software personalization.
Automation directed through “the cloud”—hosted, run, and sustained by the cloud solution supervisor—is likely to carry a subscription-based charge (possibly with a payment schedule), a usage-based framework, or both. Cloud-based automation is often more user-friendly than solutions requiring on-site installation, and doesn’t require as much IT effort and maintenance.
To have a successful accounts payable automation solution, integration with internal ERP frameworks is very important, due to the sensitive and fiscal attributes of its processes. The invoices need to be suitably matched with GL accounts, confirmed in line with vendor master information, and paired with the right documentation (such as POs, goods received data, and/or contract documents). To achieve this, there needs to be flawless integration between the resources.
Reporting and Analytics
The power to enjoy transparency within primary AP metrics and carry out evaluations on invoice and transaction figures make AP automation a useful avenue. The chosen solution needs sophisticated reporting abilities. This should encompass a dashboard, responsive graphs, and the option to move into specific line-item detail. Also, reporting needs to incorporate operational and productivity measures, as they enable the AP department to spot potential problems with processing.
Fully Automated AP
In order to gain the largest possible return on the software of your choosing, the transactions have to be properly aligned and clearly presented. In recent years, studies have shown that businesses are now opting for resources which allow for full automation of the AP process—from invoice receipt to invoice processing, payment supervision, and payment balancing. From a reporting viewpoint, being able to rely on an aggregate picture of transactions is a good way to take advantage of valuable data.
The truth is that choosing an AP automation solution is not always a fast or clear-cut process. There are various factors which need to be taken into account, and a company must make room for an investment of capital and time. It’s important to set this investment aside early, so that there are no budgeting obstacles after the decision to automate has been made. Building an understanding of the different variables involved with choosing an accounts payable automation solution will help make the decision significantly less complicated.