Accounts Payable Automation Process:
Streamline Your Finances

Master the Accounts Payable Automation Process for your business. Learn how to simplify payments, reduce errors, and save time.
Accounts Payable Automation Process: Streamline Your Finances

Executive Summary

In this article, "Accounts Payable Automation Process: Streamline Your Finances," we delve into the critical aspects of selecting and implementing an AP automation solution, guided by insights from a 20-year veteran of AP automation, Tracy Finn.

You will gain valuable knowledge on what automation features to prioritize, the step-by-step process of automation, and ensuring the chosen system aligns with their unique business needs.

Tracy's expertise provides a roadmap for businesses looking to enhance their financial operations through effective AP automation. You’ll discover the best practice process of accounts payable automation software selection and, along the way, explore the key factors to consider when choosing an AP automation partner.

You will have a thorough understanding of the accounts payable automation process and be ready to streamline your finances!

The AP Automation process needs to be planned

Introduction to AP Automation and Its Benefits

Accounts payable automation transforms the traditional AP process, enhancing efficiency, accuracy, and speed.

This technology automates the tasks of invoice processing, from receipt to payment, eliminating manual entry and reducing errors. Businesses embracing AP automation benefit from improved cash flow management, strengthened vendor relationships, and strategic insights into financial operations.

By shifting from manual processes to automated systems, companies can allocate resources more effectively, focusing on growth and strategic planning rather than routine administrative tasks. The adoption of AP automation is a strategic move for businesses aiming to streamline operations and gain a competitive edge in their respective industries.

The team discusses about the Accounts Payable Automation process
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Meet Tracy Finn

Tracy Finn has a wealth of knowledge and experience in the realm of accounts payable automation.

As a Sales Consultant at CoreIntegrator, Tracy plays a pivotal role in helping businesses navigate the complexities of AP automation, ensuring they select and implement systems that best suit their operational needs.

With a career spanning over two decades in financial process automation, Tracy's expertise is grounded in practical, real-world applications and a deep understanding of the technological advancements shaping the industry. His insights into AP automation are informed by direct experience with clients from various sectors, making her guidance invaluable to companies looking to optimize their AP processes.

Tracy's dedication to client success is evident in his hands-on involvement from initial consultations to post-implementation support, ensuring businesses not only adopt but also thrive with their new AP automation systems. His insights are a blend of technical acumen and strategic foresight, making him a trusted advisor in the field.

The process of AP Automation

Document Your Current AP Process First

According to Tracy, there is one critical step you need to take before you even start looking at AP automation solutions: document your current process.

The key to understanding your automation needs is to know your current processes.

List and map out the day-to-day steps of your accounts payable process from invoice receipt to entry to approvals to payment. This will give you and potential AP automation software providers insight into where the process can be made more efficient with AP automation providers and the AI they can bring to the table.

All non-PO AP processes have the same general steps:

  • One of your vendors sends in an invoice
  • That invoice data needs to be entered
  • It then needs to be approved
  • Once approved, that invoice needs to be paid
  • Now paid, your accounting team needs to have a copy of the invoice available
And all PO invoice process also have the same general steps:
  • A purchase request is generated
  • The purchase request is approved
  • A purchase order (PO) is generated and sent to a vendor
  • The PO is matched against the invoices
  • If the invoice is correct, it is paid
  • Now paid, your account team needs to have a copy of the PO and the invoice available

These are a very high-level look at the invoice processes.

AP workflows in theory are simple, but easily become hugely complex when applied in practice – especially when not managed correctly.

No one knows the weaknesses in your current AP process better than you do. Still, take the time to examine your organization’s AP process from end-to-end to identify and document every step and sub step.

The better you can map out your current workflow process – visually, if possible – and document weaknesses the easier it will be to find software that can automate your specific process and make it more efficient.

Click here to find out about the ROI of AP Automation!

The process of accounts payable automation takes time
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Document your Requirements

Next, ask yourself: how will software integrate into your current workflow? How will it make your process more efficient? What MUST it do to be successful? Is it broken that must be fixed? What is required from the software?

Document these because these are your software requirements.

But if your team is not entirely sure how to thoroughly answer those questions, that’s ok!

Because truly great software providers will be able to help you identify areas where your company can improve your current workflows that you never even thought of.

That’s why documenting your current process is so important.

To get your team started, here are some requirements that every AP automation software project should include:

  • Integrate with your other software systems, especially your accounting and/or ERP software.
  • Simple to learn and use.
  • Eliminate manual processes including data entry and paper handoffs that often result in errors.
  • OCR scanning of paper invoices or a verified data capture service.
  • Automated input from email invoices.
  • PO match at least 85% of invoices and purchase orders at the line-item level on the first-pass.
  • Provide fast online access to supporting data.
  • Flag duplicate invoices.
  • Facilitate communication and collaboration between suppliers and internal stakeholders.
  • Support complex approval processes.
  • Allow for one-click remote approvals online.
  • Use analytics to flag problem suppliers.
a woman wearing glasses thinks about the AP Automation process

What to Look for in an AP Automation Solution

When it’s time to look at ways to automate accounts payable processes you will quickly discover that there are plenty of options, each with its own set of features and benefits.

Beyond meeting your basic requirements, Tracy Finn, with his extensive experience in AP automation at different providers, highlights several critical considerations businesses should keep in mind to ensure they choose a solution that not only meets their current needs but is also scalable for future growth:

Integration Capabilities: This one is simple: make sure that the AP automation systems that you consider don’t just integrate with your accounting, ERP and other systems – be sure they are specifically designed to work with your accounting and enterprise software.

This ensures that data flows smoothly between systems, reducing manual data entry and the potential for errors. Tracy emphasizes the importance of looking for solutions that offer robust integration tools and support for a wide range of ERP systems.

And make sure the vendor has actual experience integrating with your systems. No organization wants to be a vendor’s learning curve or beta test for integrating with a system.

So, if a vendor does not have experience integrating with your system they may not be the vendor for you.

User Experience and Accessibility: The user interface of the AP automation solution should be intuitive and easy to navigate for all users, regardless of their technical expertise.

Change is hard enough. Having to learn a complex AP automation system will slow user adoption and could end up creating as many problems as it solves.

Tracy points out that a user-friendly solution can significantly reduce the learning curve and enhance adoption rates across the organization. So you’ll be able to quickly realize the ROI of automation.

Customization and Flexibility: Each business has unique processes and requirements. Tracy advises seeking solutions that offer customization options to tailor the system to specific workflows, approval hierarchies, and policy compliance needs.

This flexibility ensures that the solution can adapt as the business evolves.

You want an accounts payable automation system that truly works for your organization.
If you are a larger enterprise processing 15,000 invoices per year or more then the complexity of your purchase to pay system is going to need to be customized to your workflows, approvals and GL coding.

On the other hand, turnkey systems are great for smaller companies. But even turnkey systems need to be configurable to your specific needs.

No organization wants to be the round hole that is having a square peg rammed through it. So, make sure all the solutions you look at are flexible enough to meet your needs.

Security and Compliance: With the increasing risk of cyber threats and the need for regulatory compliance, Tracy underscores the importance of selecting an AP automation solution that provides robust security measures.

This includes data encryption, secure access controls, and compliance with financial standards and regulations.

As a rule of thumb, Tracy suggests making SOC II certification compliance a requirement from any AP automation provider you talk to. This will ensure that your data will be secure and that the provider is taking proven steps to ensure security and compliance.

Real-Time Analytics and Reporting: Access to real-time data and comprehensive reporting tools allows businesses to gain insights into their AP processes, identify bottlenecks, and make informed decisions.

Tracy highlights the value of analytics in optimizing cash flow management and strategic financial planning.

Scalability: As businesses grow, their AP automation needs will change. Tracy recommends choosing a solution that can scale in terms of transaction volume, users, and functionality.

This ensures that the system remains efficient and cost-effective over time.

Support and Training: Effective implementation and ongoing support are crucial for the success of any AP automation project.

It’s critical to bear in mind that you are entrusting a vital function of your business to the Best AP automation software vendor that you select. They will be a business partner in your success. So, choose wisely.

Consider whether a vendor has gone the extra mile in preparing your proposal.

Did they tick every box and then some? Vendors will never be more focused on you than when they are trying to sell you something.

If they under-perform here, then think how they will perform when you need support during or after your implementation.

Another consideration is whether the vendor has carried out an implementation to the scale you need before. This is particularly important if your current process is complex, extremely manual and/or involves a high volume of invoices.

So, make sure you have client lists and references. Better yet, ask each vender if each and every current customer is referenceable!

Tracy points out that your relationship doesn’t end once your solution is installed. Ask about ongoing training, support, and customer happiness

Because that’s what you deserve from an AP automation vendor.

Look for vendors that offer comprehensive training programs and responsive customer support to address any issues that arise promptly.

Be sure to get references and talk to current customers about each AP automation provider.

Cost-Effectiveness: Finally, Tracy points out that while cost should not be the sole factor in the decision-making process, it is important to consider the total cost of ownership, including implementation into your accounting system, customization, and ongoing maintenance fees.

A solution that offers a clear ROI will be a valuable investment for any business.

In conclusion, selecting the right AP automation solution requires careful consideration of a range of factors. With Tracy Finn's insights, businesses are better equipped to make an informed choice that aligns with their specific needs and goals, ensuring a successful transition to a more efficient and effective AP process.

Hint: Find out about the Top AP Automation Benefits!

Enjoying the process of automating Accounts Payable

FAQ on AP Accounts Payable Automation

Accounts payable automation involves the use of technology to streamline and automate the processes involved in managing and paying vendor invoices. This includes invoice capture, approval workflows, payment processing, and data entry into accounting systems, with minimal manual intervention.

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