In these times of uncertainty, businesses across the world are seeking payment and payable solutions to reduce friction. For accountancy, this means looking for ways to optimise Accounts Payable (AP) invoice processing.
To action cost-efficient, streamlined accountancy operations, we are seeing companies turn to intelligent automation, digital technology, and more specifically Accounts Payable Automation platforms. This is because the software is accessible to businesses of all sizes and can deliver a rapid, measurable return on investment (ROI), while avoiding spending too much time on redundant, time-consuming tasks from employees’ plates so that they can focus on adding tangible value to the business.
As with any emerging technology, however, it’s best to do due diligence before integrating new tools into your existing payable and payment systems.
Accounts Payable software best practices
When researching AP automation service for invoice processing, it’s critical to define clear goals, checkpoints and expectations. To accomplish this, we recommend adhering to the following Accounts Payable software best practices:
- Talk with the various process stakeholders – CFO, accountants, buyers, approvers, upper management, etc. – to fully understand the problems they encounter that must be solved by the solution.
By involving future users starting from the design phase, you can better ensure their buy-in for the project.
- List all the “pain points”: work with teams to identify the tasks that waste their time or which are a source for errors, and pinpoint other factors such as useless redundancies (multiple data entry), company weaknesses (lack of regulatory compliance), lost invoices and related consequences, double payments, processing delays, time spent on processing invoices, late closing due to a lack of reliable and available data, a lack of analytics to properly evaluate expenses by site or product, and more. Try to quantify the true cost of every identified problem as much as possible.
- Describe the current situation, answering questions such as: what types of documents need to be processed and in what volumes? What paths do invoices follow? Who is involved and at what steps : purchase order, approval? What reporting tools are in place to check data?
Identify control rules and their potential expectations clearly, while remaining focused on your goal to simplify operations. This will save you time when implementing the project, by minimizing risks of improper alignment of the chosen solution with company expectations.
Questions to ask the AP Automation software solution supplier
Here is a list of key questions that you should ask the supplier to make sure their offering meets your needs precisely.
- What production tools are compatible with your software? Is integration seamless and transparent? How many customers use your solution?
- Is your software hosted on the Cloud?
- How does your software benefit from artificial intelligence and machine learning? It is important to know whether the solution being considered leverages new technologies.
- What security mechanisms are implemented to avoid fraud?
- Do you offer a full turnkey service, or will I need to install additional features to cover our needs? What is your pricing structure?
- On average, how long does it take to deploy your service? Do you have detailed examples?
- What do your customers think about your service? Do you have reference contacts in our field who would be willing to share their experience with us?
Three essential criteria to consider before choosing a software
To help you with a preliminary evaluation, here are the three essential criteria to take into account before making a commitment to a solution provider in your efforts to eliminate tedious manual processes.
1) Choose a Cloud software
Cloud-based services enable you to access, visualize, and validate the status of every step in the accounting process at all times, 24/7.
Documents stored in the Cloud can only be accessed by authorized users with the proper login credentials, for both look-up and approval.
Users can also view a complete history for every document, including the people who had access to it and those who approved it, thus enabling you to track status in detail throughout workflow.
No more paper documents to exchange at every step in the process.
No more lost documents!
All of this can happen without you having to worry about server maintenance and other IT support services required by on-premise services, without any fear of being held hostage by a supplier that stores your data on their own internal server.
2) Demand a no-risk subscription and refuse restrictive long-term contracts
There is no reason to sign a long-term contract with a digitalization solution supplier when there are options, such as that offered by Yooz, that enable you to pay for what you use and adapt your offering as your needs evolve.
When searching for an AP Automation solution provider, one of our clients told us this: “Many of the providers that we evaluated proposed a solution whose pricing structure was completely out of line with our real needs and specific issues.
We would have been obliged to pay for more than what we really needed with respect to our company’s size. Yooz emerged as the ideal AP Automation solution. We knew that the solution, which offers performance and scalability, would be able to adapt perfectly to our company’s evolution.”
With a monthly subscription, you benefit from maximum flexibility and freedom for customizing your offering. Your payment is based on the volume of documents you need to process during the month, with the possibility to adapt your subscription based on your needs.
Solutions such as Yooz give you a way to manage an unlimited number of users at no additional cost. Without a restrictive long-term contract, you can also cancel your subscription at any time.
Avoid committing to a long-term subscription with your supplier. You will be held hostage for the entire period, and even if you decide to cancel the contract, your provider may choose to hold on to your data or even charge you an additional fee for accessing it.
3) Choose a P2P solution and do not allow certain operations to be outsourced to third parties.
You hear a lot of talk about optical character recognition (OCR), a process that is increasingly used to automate accounting processes by converting images to text. While it is true that OCR is important, the next piece of the puzzle is even more critical: intelligent data extraction is the function that recognizes and processes the text, transforming it into relevant and useful information.
Many of you are looking for an AP Automation solution provider, and you may be wondering whether or not they provide OCR technology. It is a perfectly valid question. But, in reality, what you really want to know is whether or not the solution provides a complete technology that includes OCR, smart data extraction, and machine learning.
Some providers use optical character recognition, but then follow up with manual extraction methods by outsourcing the task to a third party. This is typically referred to as “verification by a third party”.
Requiring human control, OCR data extraction calls on operators to enter the data read by OCR into predefined fields. In that case, manual data entry is outsourced and may be particularly slow, generally in the range of 24 to 72 hours. If your objective is to move from a manual process to an automated process to increase efficiency and productivity, then the entire concept is inconsistent with your effort.
Furthermore, you will be highly dependent on the outsourced provider as you wait for them to enter your data manually. It can only make the situation worse.
AP Automation solution suppliers who outsource this phase in invoice processing are likely to be more concerned with the costs of labor related to data entry than they are with your company or the precision of your invoices.
This could notably lead to a lack of precision in your documents, a potentially significant inconvenience given the fact that effective automation provided by the most advanced solutions truly reduces the number of errors caused by manual entry.
Observing these Accounts Payable software best practices will iron out any potential obstacles, ensuring a smooth onboarding process that streamlines vendor invoice processing in the future.
Moreover, a hassle-free onboarding process means faster results:
- AP automation can deliver over £10.47 in savings per invoice and reduce invoice processing and approval workflow time by 50%.
- Shifting from a paper-based system to paperless Accounts Payable automation results in a 71% cost reduction (as reported in this Capgemini Consulting study).
Watch our replay and discover how to achieve in one hour the fastest invoice processing with the most advanced AP automation on the market