Accounts payable automation has been around for over 20 years, but what are the accounts payable automation best practices for 2020?
At CoreIntegrator we have 20 years of experience in AP automation. So we have a broad perspective on AP automation best practices. We’ve seen AP automation fads come and go.
The fundamental reason to implement AP automation remains the same in 2020: save time and money.
But today there are accounts payable automation options that simply did not exist two years ago that can provide near-100% accuracy in automated and verified data capture. And combining these new technologies can create a totally automated AP process from procure to pay.
So we’re excited to share our Best Practices for AP Automation in 2020:
- Verified AP Data Capture Service has Replaced Optical Character Recognition (OCR) as an AP Automation Best Practice
- Robotic Process Automation (RPA) Technology is Here to Stay
- Combine Verified AP Data Capture with RPA for Fully Automated Accounts Payable Processing
- 2020: The Year Work From Home Became a Requirement
- Understand the Invoice Processing Steps Before Automating Them
- Know the Difference Between Cost Savings and ROI
- Maximize AP Automation ROI in 2020
- Best Practices in Choosing an Accounts Payable Software Provider
Verified AP Data Capture Service has Replaced Optical Character Recognition (OCR) as an AP Automation Best Practice
When most people think of AP automation OCR is the first thing that comes to mind: run an invoice through OCR technology and the key data from the invoice magically appears in your system.
It’s a lovely concept.
But if you have ever worked with OCR technology – or even had a demo of it – you know that even in 2020 OCR software is far from perfect.
Although OCR technology has improved over the past decades and continues to improve, achieving 99% or 100% accuracy with OCR alone is still not possible. Not even close. In our experience, OCR data capture accuracy remains mired at around 70%. That means 3 out 10 characters will be incorrect even if you are using state of the art OCR.
That’s simply unacceptable in the world of AP invoices. Which means that even with an OCR-based AP automation solutions your AP staff still spends a lot of time verifying AP data against invoices.
And that’s why in 2020 state of the art AP automation data capture systems like CoreIntegrator Verified AP Data Capture Service have left unreliable OCR systems behind.
Verified AP data capture services combine technology with human review to achieve nearly 100% accuracy on AP invoice data capture.
To use CoreIntegrator Data Capture Service, for example, no expensive OCR software or hardware is required. Instead, your AP staff or your vendors simply upload or email invoices to our system. Invoice data will appear in your AP clerk’s work queue within 1 business day with important data automatically entered in your system ready to be processed.
And best of all, at least two humans verify the accuracy of that invoice data by the time it is loaded to your company’s AP work queue. And if there are any discrepancies then up to four humans will check, re-check and verify that your AP invoice data is accurate.
So CoreIntegrator Data Capture Service not only automates the data capture, it automates data verification for near 100% data capture automation accuracy.
Verified Data Capture is Far Less Expensive Than OCR
OCR data capture systems for AP automation are expensive. To achieve accuracy greater than 70% you may have to invest over six figures into OCR software and hardware. There will be additional expenses for software licenses and replacing OCR equipment. And even after making that investment you’ll be paying AP staff to review and verify every field because of OCR’s low accuracy rate.
CoreIntegrator Verified Data Capture Service is included with our A/P One solution. With AP One you get a verified data capture service along with our cloud-based invoice processing and approval workflow solution. It’s a complete AP automation package designed for small and medium sized organizations that we can have set up for you in 3 days or less. And our unique subscription pricing means you get all of this AP automation functionality yet never pay more than $2 per invoice (at the 250 invoices per month level…the price goes down as volume goes up). After a small set-up and training fee you only pay for the invoices you process. No other hidden costs or fees – ever!
And CoreIntegrator Verified Data Capture Service can be added onto our CoreIntegrator Enterprise solution. CoreIntegrator Enterprise is our powerful workflow solution designed for larger and enterprise sized companies and organizations. It automates AP as well as HR, travel and expense and any other business workflow. Adding verified AP data capture to your CoreIntegrator Enterprise solution only costs around 50 cents or less per invoice!
So no matter which CoreIntegrator solution you choose, your data capture automation can not only be far more accurate than OCR, it will be far less expensive!
If your 2020 accounts payable automation solution does not provide automated verified invoice data capture then you are missing out on modern best practices.
Robotic Process Automation (RPA) Technology is Here to Stay
Robotic process automation (RPA) makes your accounts payable data entry far easier and more efficient.
RPA like CoreIntegrator’s Smart AP uses key fields to auto populate learned fields.
RPA is a tool that learns how you prepare invoices based on a few “key values”. These key values are indicators to Smart AP so it knows how you want the data entry completed.
For example, if you always prepare your invoices based on the vendor, then vendor is your key field and Smart AP auto-populates your system based on how you processed an invoice from that vendor in the past.
But sometimes your process isn’t quite that simple. Maybe your key values are a combination of fields, such as company name, then vendor as well as the department or facility the invoice should be charged to.
Now you have three key fields and once you enter those key values, all the rest of the information will auto-populate based on how you processed the invoice with those three key values the last time. Smart AP even auto-populates the GL coding.
Think of it like autocomplete on steroids. Because it doesn’t just guess what word you are going to type, it learns how you want fields filled based on how you filled them before using the same key data.
RPA technology can help significantly reduce repetitive data entry tasks.
Combine Verified AP Data Capture with RPA for Fully Automated Accounts Payable Processing
AP data capture services provide near 100% accuracy for automating the entry of key data from AP invoices.
AP RPA populates learned fields including GL coding based on key data from AP invoices.
So combining a verified AP data capture service with RPA creates a fully automated AP process.
For example, CoreIntegrator Verified AP Data Capture takes care of entering the key fields like vendor name, invoice number, invoice date, the amount and the PO number (if available). Then Smart AP RPA automates tasks like assigning GL codes and launching invoice approval flows based on how you teach it to handle combinations of key data automatically entered.
With this powerful combination of tools your AP staff are completely freed from repetitive and time-consuming invoice processing because every AP invoice processing step from procure to pay is truly and fully automated.
2020: The Year Work From Home Became a Requirement
2020 is the year that the ability to do remote work went from ‘nice to have’ to ‘must have’ as companies and organizations around the globe rolled out mandatory remote work or work from home policies in response to the COVID-19 pandemic.
This resulted in major disruptions to business flows. Especially for companies that are still mired in manual and paper-based business processes.
In 2020, your business operations need to continue no matter where your staff are forced to work from – and that includes paying the bills.
So a new AP automation best practice (if not an absolute requirement) for 2020 is the ability for your company to maintain business continuity in a virtual environment and accommodate the processing AP invoices from home.
And even as the COVID-19 pandemic ends, companies and organization must make the ability to work from home part of their business continuity or disaster recovery plans in the event of a future recurrence.
Understand the Invoice Processing Steps Before Automating Them
Business owners and their AP staff can quickly get overwhelmed by the growing complexity of their invoice processing.
So best practices dictate understanding the invoice processing steps as well as the inherent inefficiencies and risks they create.
We provide a primer to help you here: What Are the Invoice Processing Steps?
But to summarize, these are the general steps to invoice processing:
- Receive Invoice
- File Copy of Invoice
- Invoice Approval
- Invoice Payment
Depending on the size of the company, the rules and hierarchy can make this a far more complicated process than it seems.
So best practices dictate that you understand these steps and figure out how they are managed in your organization.
Because understanding the AP invoice process in your organization is the first step to automating it.
Know the Difference Between Cost Savings and ROI
Another AP automation best practice for accounts payable automation in 2020 is understanding the difference between cost savings and ROI.
Processing a SINGLE invoice manually can cost a company anywhere from $14 to $20 in hard and soft costs. AP automation solutions bring that cost down by creating efficiency.
Those cost savings are great.
But AP automation solutions also have a price tag. And – as we have noted – that price can be very high if your AP automation solution includes state of the art OCR hardware and software.
The key to AP automation ROI vs. raw cost savings is creating AP processing cost savings at the lowest price possible.
And that’s why our A/P One AP automation solution pricing is based on a per-invoice subscription model. It’s easy to calculate per-invoice ROI when you know the per invoice subscription price is a couple dollars per invoice – or less!
Our CoreIntegrator Enterprise solution also provides significant cost savings as well as real ROI that your organization will start seeing on day one.
Maximize AP Automation ROI in 2020
The most expensive part of any AP process is people.
According to Glassdoor, the national average salary for a Accounts Payable Specialist is $40,456 in United States. And that’s just base pay. Benefits, taxes and bonuses can drive that cost much higher.
But even if you can find an accounts payable specialist or AP clerk for less, you will be adding permanent overhead costs to your company or organization.
So it makes sense to consider AP automation before you start spending money on an accounts payable specialist or AP clerk salary.
AP automation can make your existing AP clerks and AP specialists up to 500 times more efficient.
And if it includes Verified AP Data Capture Service, not only will you eliminate the need for people to do data entry, you’ll also eliminate the need for AP staff to spend time on data verification.
And you can use CoreIntegrator’s OnPay Solution to automatically make electronic payments by check, ACH or wire transfer. Or why not use virtual credit cards and receive a 1% rebate on every payment you make!?
You can then have your AP staff spend time on strategic initiatives rather than data entry and verification – or even reduce headcount in your AP department.
Best Practices in Choosing an Accounts Payable Software Provider
Best practices for choosing an AP automation solution in 2020 haven’t changed. They still dictate following the classic software selection process: planning, requirements gathering, vendor evaluation and vendor selection.
We go into great detail about this process in our guide How to Choose an Accounts Payable Automation Software Provider.
Selecting an AP automation software solution can be overwhelming. But by following these tried and true software selection best practices, you will significantly improve your chances of getting the right software for your business.
It does require an upfront investment of time and work but getting things right the first time often does!
Bottom Line – Accounts Payable Automation Best Practices for 2020
There have never been better reasons to automate your accounts payable process.
Automating accounts payable has always been a great investment.
But 2020 is a year when the ability to process AP invoices from home became a business continuity requirement.
And it’s the year when unreliable OCR technology was surpassed by verified AP data capture.
Most importantly, it’s the year when combining verified AP data capture with RPA to create a truly fully automated AP process became possible.
Applying accounts payable automation best practices in 2020 can create a fully automated AP process with high ROI. So high that it will pay for itself and start putting money back in your pocket.
Right now is the time to look into automating your AP process!