Approx. Read Time 12 minutes
Things to look for when you Evaluate an Accounts Payable Automation Solution Provider for your Company
“I am bogged down by errors in data entry.”
“The invoice processing is so slow, even a snail seems to move faster.”
“ I am having nightmares tracking past invoices!”
“ I get too many calls from suppliers in a day .”
These are some common woes of accounting employees who are struggling with a manual system for accounts payable. Does it seem familiar? It’s time, you moved to an automated AP solution.
You know the criticality of the Account Payable function in your company as it deals with paying money to your suppliers and partners timely and accurately. One decimal point here and there or one “zero” more or less will result in overpayment or underpayment.
While moving to an automated AP solution is a good move, you may get overwhelmed by what are the factors to consider while choosing the AP solution that’s right and what suits your company the best. This article throws light on those factors.
What are the factors that you should consider while evaluating an AP automation solution ?
End-to-End Versus Point Solutions
Features and Functionality
Invoice volume and Variety
Return on Investment
1. End-to-End Versus Point Solutions
Some solutions offer point solutions, whereas some offer the entire end-to-end solution.
There are four important distinct tasks that moves Invoices from start to finish:
Step 1: Invoice Capture
Step 3: Payment Authorization
Step 2: Invoice Approval
Step 4: Payment Execution
Each of these steps from 1 through 4 are “Point Solutions” and all the 4 steps strung together seamlessly will be an “End-to-End Solution”. Of course Point Solutions solves part of your problem and End-to-End Solution will solve a lot of your problems!
2. Features and Functionality
Some of the questions you should ask around features and functionality are:
- Find out what are the Technologies the AP Automation Solution Provider has used. Optical Character Recognition(OCR)/ Intelligent Character Recognition(ICR), Intelligent Word Recognition(IWR)/ Robotic Process Automation(RPA). This is important to judge the degree of Automation achieved. Less Automation means more time consuming manual work for you! Depending on the technology used, solution providers will claim that their Invoice Capture Engine captures 90%,95%,99% etc. of the Invoice data correctly.
- Does the Application have flexible and easily customizable Approval Workflow to design approval flows with predefined timelines within a short span of time?
- Does it allow you to Configure the Business Rules you want to set easily?
- Does it have an Unified Digital Cockpit which shows: Invoices to be processed and invoices under process, Supporting Documents required for Approval?
- Can you generate various Reports readily for Management Review and to analyze the current state of the process?
- How does it help your Audit requirements?
- Is it able to handle and detect suspected duplicate invoices?
- Does it collaborate with other databases and matches invoices against Purchase Orders(PO)?
- Does it allow you to handle Exceptions easily which arises after invoices are under process during the Workflow?
- Does it allow the user to approve invoices on mobile devices like iPhone, iPad, Blackberry and Android based mobiles?
- Can Stakeholders access invoices, collaborate to resolve problems, and re-route invoices for approval?
- Whether it is hosted on Cloud or Server? What are the Security features?
3. Integration with your Existing ERP or Accounting System
Before you get too deep into the process with an AP Automation solution you should verify that it is compatible with your existing accounting system or enterprise resource planning (ERP) system. Not all solutions work with all systems, so this should be one of the first questions you ask.
Check if the AP Automation Application has any Out-of- the Box Integration feature with your ERP or Accounting System. If Out-of-Box Integration is there then it means less time to integrate and less technical issues faced while integrating or even thereafter. In case Out-of-Box Integration Feature is not there then you may like to know how many months/weeks will it take to integrate? Further, you also need to check what are the payment platforms this solution integrates with.
4. Implementation Support
Changing from one system to another or upgrading a system while keeping your business process ON is like changing the tyre of a speeding car while it is running. This is seen to happen easily in James Bond movies but in reality it is very challenging.
You need to know how fast can they implement your automated AP solution? Will the solution be easy for your AP and management teams to absorb? If technical support is needed, can you get someone on the phone right away? The best way to answer these questions is by asking other customers. So request that your vendor provides references—preferably businesses that are similar to yours in terms of size and industry vertical.
Further, will the vendor offer initial and ongoing training to help your staff understand how to use the solution? Will the vendor offer an SLA for resolving support tickets and give you the option to access support any way you want—phone, email, webchat?
5. Invoice volume and variety- Can this AP Automation Solution Handle our Invoice Volume and different types of Invoices?
If we ignore this topic then we are assuming that any AP Automation Solution provider can handle any volume of Invoices per day/week/month. Well, normally it does but if your company is handling a high volume of invoices per day/week, it is better to discuss with your AP automation solution provider with an estimated number and check if it can handle this volume.
Invoices come in various forms to your company. Do a due diligence to ensure that all types of invoices which comes in can be handled by the AP Automation Solution.
6. Return on Investment(ROI)
Your ROI will be different for different AP Solution Providers. Hence it is important for you to calculate your ROI separately for each of your prospective AP Automation Solution providers. Why is it so? It is mainly due to the initial cost of the Solution and also the Features of the Solution. For Point Solutions the initial cost may be low but your ROI may also be low. To know more about “How to measure your ROI on your AP Automation” , go to our Blog
7. Reputation of the AP Automation Solution Provider
When you buy something on-line from an E-retailer website you read the product reviews and look at the ratings. You can do the same thing here as well. There are multiple open- source sites where you can read reviews from Verified Users of various AP Automation Solution providers.
If you want to know further information related to the company like financial information, leading investors, merger and acquisition, there are open-source sites for these as well.
8. Experience of the AP Automation Solution Provider
AP Automation Application handles one of your most important business processes – the money you spend! You definitely don’t want to entrust it with a fly-by-night software provider or a new entrant to the market.
CFOs and AP Heads are, by nature, careful and meticulous people. Any decision they take they consider the Risk factor and it’s Mitigation plan. And when it comes to AP automation software, the greatest hedge against risk is experience. So carefully consider the track record of the companies you consider entrusting with your AP automation.
So how do you do it? Read the Case Studies with specific customer names carefully pertaining to your industry. Ask for at least three references where they have implemented the AP Automation Solution. Talk to the references to find out their experience in implementing the AP Automation Application.
As you continue to evaluate an automated accounts payable process, make sure you are asking the right questions on your vetting calls with potential vendors.
If you are looking for the highest level of efficiency and the best return on your investment, the best route to take is an end-to-end solution. Taking a holistic approach and connecting all aspects of accounts payable into one streamlined workflow enables companies to benefit from the greatest amount of efficiency, the most flexibility, and highest level of security.
When CFOs and AP Heads evaluate to buy an AP Automation Solution provider for their company it is recommended that the IT Heads are also involved in this evaluation process from the very beginning.
Are you ready to take the plunge into automating your AP? Check out our videos…
Why CFOs and Account Payable Heads wants to go for Digital Invoice Processing
What are the Product Features of PEOLs Digital Invoice Processing Application