AP automation is no longer the latest trend for finance departments—it’s the norm. Over the past few years, automated solutions have proven to be an easier and more efficient way to manage B2B payables, but selling the idea of payment automation and eInvoicing to the movers and shakers in the company isn’t as simple.
According to a recent PayStream Advisors report, most businesses shy away from automated AP solutions for a few reasons. Most don’t set aside the budget (36 percent), while a vast majority of others believe their current AP processes work just fine (21 percent). So, many finance departments are forced to juggle paper-based processes and other crucial responsibilities until they build a business case for AP automation worth selling.
Making a case for new technology can be a big ask to bring to leaders. The annual budget is allocated, and goals are set. Implementing new technology costs valuable time and money, and resources may seem unattainable even though automated solutions may be best for the organization. Before you lose all hope, here are a few crucial points to help convince your leadership team that AP automation is not just a “nice to have,” it’s a necessity.
Why AP automation?
Often, it seems like leaders don’t understand the ins and outs of the antiquated payment process. Most businesses struggle with keeping track of piles of printed invoices, sending paper checks, and managing approvals with dozens of emails and spreadsheets. Keeping up with all it takes to process a single payment can be time-consuming and filled with manual mistakes.
AP automation streamlines current manual payment processes from start to finish. Over time, finance departments have developed “tried and true” accounts payable processes. Even though these workflows may be time-consuming and prone to errors, they still work. Consequently, companies often don’t allocate budget for AP automation solutions. After all, AP automation brings forth a bundle of fears: no ROI, lack of control, and a steep learning curve for the new technology.
With NetSuite, vendors can submit invoices via mail or email, and AvidXchange will handle data entry on your company’s behalf. Regardless of how invoices are submitted, once they’re properly coded, they’re available in the Invoice application for easy approval. With streamlined invoicing, approval, and payment processes, your team will improve efficiency, with increased control and visibility. NetSuite users who implement AP automation solutions spend less time searching through piles of paper and spend more time analyzing critical data points that impact the business’ spend and growth.
Why now? What if we wait?
Every business undergoes change, whether it’s a new partner or organizational structure. It may not seem like the right time to implement new technology, but leaders may not be aware of the risks associated with manual processes. Every day that your team manually handles vendor invoices and payments means more wasted money and time. In fact, it can cost up to $22 to manually process an invoice and anywhere between $4 and $20 to process a paper check. Years of these processes add up to quite a sum your business could spend more efficiently.
In addition to expensive processing costs, prolonging AP automation increases the risk of fraud. Stacks of printed invoices and paper checks used in the payment cycle put your business at risk. A recent AFP report shared that 78 percent of surveyed organizations were targeted for payment fraud in 2017, with 74 percent of those businesses being targeted by paper check.
A big selling point for your finance leaders is the immediately improved security for each invoice and payment after implementation. With these security measures, there’s less risk that fraud will occur. These improved security features include:
- Paper-free processes to reduce the risk of information falling into the wrong hands or suspicious vendor invoices
- Digitized vendor verification, including requiring W9s and 1099s before processing the initial payment or invoice
- Positive Pay to double-check every check for duplicates or fraud attempts
- Increased control with a streamlined, automated process that follows your current manual process without skipping a step.
So, why fix what’s not broken?
The answer is simple—time and money. Even though current manual AP processes work, they’re riddled with errors, risks, and inefficiencies. There are other electronic accounts payable efforts that digitize some of the payment and invoice process—OCR or PDF—but different parts of the process that aren’t digitized still have to be manually managed. PayStream Advisors shared an extensive list of AP challenges, including manual data entry and inefficient processes (48%). Wasteful AP workflows that are fully paper-based or only automate half of the process often lead to pricey pitfalls for mid-sized businesses, including late payments, missed discounts, and an overall lack of productivity.
AP automation solutions, like AvidXchange Invoice or AvidXchange Pay, seamlessly integrate for NetSuite users. For example, with AvidXchange software and services, invoices are entered electronically into the user portal, eliminating the mundane tasks of opening, scanning, and manually entering information into NetSuite. Once invoices are approved, they flow directly into NetSuite to securely pay vendors.
How can we measure the success of AP automation?
After implementing AP automation, managers will be eager to hear about changes, constraints, and successes. “How much time and money were saved?” “What does the payment process look like now?” It’s important to share any big wins, so leaders will know they made the right choice. Your team is bound to expect immediate wins such as less paper and less time spent manually handling approvals, but there’s much more to evaluate.
NetSuite users can also benefit from customizable reports with all historical payment information, including invoices, payment disbursement dates, and any additional vendor and payment information your team needs. Leaders will have the visibility and transparency to measure the impact of financial decisions and budget better. Other convincing success measurements include improved cost savings, payment processing, and approval cycle time. With AP automation, your team will have the qualitative and quantitative big data needed to make well-informed decisions, get answers to questions, and more.
Measuring success is easier when your team has more time to analyze data accurately. Your team will be able to provide transparency into vendors, payments, and invoices—all without paper. No matter how your organization measures success, leaders will find peace in knowing that this easy, efficient paperless process will allow your team to spend time focusing on exceeding goals that drive business growth.