Here at Yooz, we talk a lot about invoice payment processing, or AP, automation. It’s what we do, after all. And because our platform offers a complete, end-to-end, purchase-to-pay solution, we use the terms “procure-to-pay, or P2P,” and “payments” as well in conversations about automation with our prospective clients and in our thought-leadership content. As an Account Executive, I find that in my discovery calls with prospective clients those terms are interchangeable and there seems to be a lack of clarity about how to differentiate the three.
In this 2-part blog series, we’ll see if we can shed some light.
Before jumping right in to talking about the features and benefits of the Yooz solution, I always start by asking, “What is your primary goal in automating your AP workflow?”
And from there, determine what the best solution would look like. In that conversation, the client may discover that what they actually need is different than what they originally thought. For example, our client Tim Carter with Salsarita’s Mexican food restaurants, came to Yooz in search of an automated document processing solution. What he discovered was that he really needed a complete invoice processing and payment (AP) automation solution, and Yooz was the perfect fit.
On the other hand, if a client wants to automate payments only, we may not be the best option. But many times, like with Salsarita’s, a client might think they only need one functionality like payments, and discover that a complete end-to-end solution is really what will help them achieve their business goals and gain the most efficiency.
So, what’s the difference?
Procurement Automation: Procurement (P.O./P.R.) is the first step in the P2P process. Automated solutions guide employees across the buying process. Another way to refer to it is “spend management.” It is a portal where all vendors and their products are listed in one place, so it is easy to compare prices and any promotional or volume discounts. It also provides comprehensive insight into spending and prevents rogue spending. That’s pretty much where this type of automation ends. These types of dedicated solutions typically require a several months long implementation and heavy IT involvement. It also requires heavy lifting from the vendor, such as entering the P.O. and generating the invoice. Procurement automation tends to make sense for large, decentralized companies.
Payments Automation: In Part 1 of this blog series, we gave an overview of procurement automation—the first step in the procure-to-pay (P2P) process. Payments automation—the final step in the P2P process—solves for signing and mailing physical checks. It is an integrated solution that allows organizations to make check, ACH, virtual card, and wire payments, taking automation a step further than “okay-to-pay” once invoices are received, processed, and approved.
Seems simple, right? Not necessarily. In many cases, the payments automation solution is integrated with the P2P or AP automation solution. In some cases, data capture (powered by optical character recognition, or OCR) and invoice processing is outsourced. Method of payment comes into play: Depending on the payment partner, there might be an interchange fee for credit card processing—paid by the vendor—with a portion of the fee kept by the payment partner and a portion passed on to customer. ACH (automated clearing house) is the least expensive and fastest way to make payments. And there are still quite a large percentage of companies that still generate and mail physical checks.
There is also the matter of logging in and out of different platforms that are not seamlessly integrated. It can get tricky when, for example, a client uses an outsourcer to enter invoices into its payment automation system. From there, the payment is made by a different system and the user must manually download the remittance information and upload it to their ERP (enterprise resource planning). Consequently, the user has to log in and out of three different systems!
AP Automation: We reviewed procurement automation—the first step in the P2P process, and payments automation—the final step in the P2P process. What about all the invoice processing steps in between? That’s where accounts payable (AP) automation comes in. With a complete end-to-end solution like Yooz, seamlessly integrated with more than 175 ERP systems, there is one solution and one login. We like to say, Easy. Powerful. Smart.
Here’s how it works:
Yooz leverages smart technologies such as A.I., machine learning, and OCR to complete a sophisticated workflow, from beginning to end in six easy steps:
Once invoices are received, Yooz will read and code them and decide which workflow they need to follow for approvals. Once invoices are approved they are automatically synced into the ERP or accounting system. Yooz completely simplifies the Pay and Export steps (in comparison to the complicated scenario we reviewed in the Payments Automation section above). Here’s an example: The client runs a payments report from the Yooz system. Once payments are approved, all necessary information is exported to your integrated payment partner’s system to remit payment. The payment partner then sends remittance information back into the Yooz system and Yooz pushes to the Intacct ERP. All of the information is stored in the Yooz system and also in Intacct. One login. One set of master data held in the ERP or accounting system. All seamless to the client.
Did I mention, “Easy. Powerful. Smart.”?
Remember, before jumping right in to talking about the features and benefits from any automation provider you are considering, know what your primary goal is in automating your AP workflow.
A good place to start might be to ask yourself, “What part of my process costs the most time and/or direct expense? And from there, determine what the best solution would look like.
For a comprehensive guide to preparing for your AP automation journey, download our “How NOT to Mess Up Your AP Automation Project” checklist .