As an experienced finance professional, you will be well aware of the fact that manual accounts payable processes can be both costly and inefficient. The handling of bills, supplier invoices, loans, and other payables can be a tough ask for even the most efficient organizations, particularly when a large supply chain is involved.
Due to the many challenges that exist within the AP process, along with mounting pressure from CFOs to improve processes and reduce costs, many organizations have switched or are considering switching to an automated AP solution.
AP Process Challenges – Recognize any of these?
A recent report by Levvel Research listed the biggest challenges that exist within the AP process.
While manual routing of invoices for approval and manual data entry, rank as the two biggest challenges in the report, when considering an AP solution to transform your processes, it is vitally important to focus on the pain points that matter to your organization specifically, and the degree to which each one poses issues.
Many AP solution providers will offer both ‘out-of-the-box’ as well as fully customizable software. A ranking of your pain points will help you decide which option suits your organization’s requirements when it comes to choosing a solution provider.
The Benefits of Implementing an AP Solution – Which ones matter to you?
There are many benefits to be experienced from implementing an automated AP solution, which we discussed in detail, in a recent blog.
In another report by Levvel, on the Benefits Achieved Through AP Automation Implementation, a reduction in paper invoice volume, quicker approval of invoices, improved visibility, and increased employee productivity ranked amongst the top benefits of implementing an AP solution.
Many of these benefits are enabled by some emerging technologies that could play a big role when it comes to choosing a solution provider.
For example, Optical Character Recognition (OCR) software, found within many AP solutions, has the ability to scan and extract relevant data from invoices, ready for processing. This software greatly improves the data entry and matching processes, and is a particularly transformative feature for organizations that have to deal with a large amount of paper-based invoices.
Robotic Process Automation (RPA) is another technology growing in popularity, with Deloitte reporting that 53% of surveyed organizations have either implemented or begun incorporating robotic process automation into their invoice processing strategy.
RPA possesses the capabilities to replace humans to automate several, rules-based tasks and processes, most notably invoice matching and routing for approval. Deloitte’s Global Robotics Survey presents the benefits of incorporating RPA into the implementation of an AP solution, with compliance, quality/accuracy and processing times proving to be the areas with the biggest improvements.
With a clear understanding of the biggest AP pain points that exist, the most common benefits associated with an automated AP solution and the most transformative technologies found within many AP solutions, you will find yourself in a position to begin laying out the steps for a successful implementation.
The Steps to a Successful AP Solution Implementation
1. Review Current Processes
This initial step will be made a lot easier once you have a knowledge of the most common AP pain points and benefits of an AP solution. However, as mentioned already, it is important to focus on your own organization’s specific challenges and requirements as many solution providers offer customizable setups and varying technologies.
Collaboration with other departments is also key at this stage, in order to ensure that the most comprehensive solution is ultimately chosen, that satisfies the requirements of all affected departments.
Middle management and the C-suite should be consulted with in order to assess their expectations implementing an AP solution. This will greatly improve your ability to devise a comprehensive business case.
2. Overcome the Barriers
For any organization looking to implement an AP solution, there will be certain roadblocks in the way, that must be overcome. We discussed these in detail in a recent blog.
A common barrier encountered is a lack of budget or sometimes, simply, general support from management towards the project. This potential blocker ties in with the need to collaborate with management at the earliest opportunity and present a comprehensive business case to them.
A lack of knowledge regarding the goals and the expected outcome of the project will result in certain employees adopting a resistant attitude. This attitude may be born out of fear for their jobs. With buy-in essential from everyone affected, regular communication, along with training programs will be key to ensuring a successful implementation.
3. Establish a Project Team
With a clear understanding of your organization’s AP solution requirements and with any potential roadblocks having been overcome, you should look establish an effective team of people to manage to the project. You will need a balanced team in place, with various levels of seniority from all essential departments. Key members will include your finance director, both a senior and junior member of your AP department along with a representative from IT.
4. Choose your Solution Provider
With the necessary foundations in place, you will be ready to go about selecting the provider of your AP solution. This can be a long process, including several demos and documentation reviews. Be sure of your exact requirements and find out if the provider can truly deliver on what your expectations of AP automation are.
Pricing will also be a key topic of discussion. Take into account your budget and be sure of the implementation costs involved, the costs of ongoing services and also any liabilities in the event of the implementation failing.
5. Define the Phases of Implementation
Your solution provider may have their own onboarding and implementation processes defined, and take the lead with this step. It is important to lay out the exact steps of how your organization will reach ‘go-live’ with your new automated AP solution.
Training workshops, aligned to specific user roles, should take place for everyone that will be using the solution. Following training, all features within the solution need to be rigorously tested by relevant departments. Progress should be tracked with regular updates communicated to all key stakeholders, to ensure that stakeholders remain engaged with the project.
Once these phases have been completed, and everyone is satisfied with the state of the project, you will be ready to officially activate your AP solution for the rest of your organization and supply chain. Monitoring of the solution’s performance and stakeholder competence towards the solution and adherence to new procedures will be key following the initial activation phase. By following these steps, you may be surprised at how quickly the transformative results of implementing an automated AP solution become apparent.