How to choose accounts payable partner

How to Choose an Accounts Payable Automation Software Provider

So you’ve decided to automate your accounts payable process to save time and money. Smart move! But how do you choose an accounts payable automation software provider?

Software selection can be a daunting process.

And because implementing a software solution requires an investment of time and money it’s critical that you get it right the first time.

Luckily there is a tried and true approach to choosing the best software for your company. And that process applies to choosing the right AP automation software too.

So let’s walk through the best practice process of accounts payable automation software selection and, along the way, explore the key factors to consider when choosing an accounts payable automation partner.

In this post we’ll cover:

The Software Selection Process

Whether your company is considering an all-encompassing enterprise solution or small software system, best practices dictate following the same software selection process: planning, requirements gathering, vendor evaluation and vendor selection.

How to Choose an Accounts Payable Automation Software Provider

And the same holds true for how to choose an accounts payable automation software provider.

Planning for Accounts Payable Automation Software Selection

Failing to plan is planning to fail. So start your accounts payable automation software selection process by making a plan.

Create a Team

Good planning begins with forming a cross-departmental team to assist in exploring the key drivers leading to the initiation of your software selection project.

In the case of accounts payable automation software your team should include representatives from accounting as well as departmental invoice approvers and your IT team.

This team should be engaged in all aspects software of the selection process from planning to requirements to vendor evaluation to vendor selection.

The team is also responsible for dealing with change management. There is always grumbling during times of change. But the goal of automation is to make things easier for everyone. So the team must not only include key stakeholders to the AP process, but the team must listen to concerns and suggestions from across the company.

This will not only help with organization-wide buy-in to change, it will help the team identify potential challenges and considerations they would not otherwise have known about.

Create a Plan

The software selection team’s first step is to list the overall goals and objectives of the software acquisition, how the acquisition will improve the company’s bottom line and how the project aligns to the company’s overall goals. Documenting these points will result in a project charter that guides the software acquisition project.

An AP automation software acquisition project charter should at a minimum include the following objectives:

  • Simplify AP processing
  • Significantly reduce paper
  • Automate AP data entry
  • Reduce or eliminate data entry errors
  • Speed up AP processing
  • Make the invoice approval process easier and more convenient for approvers
  • Give immediate insight into an invoice status
  • Provide auditors with immediate access to invoices and invoice approvals for review
  • Save time and money for the company

Armed with a project charter your team will be ready to tackle your company’s software requirements.

How to do Requirements Gathering for AP Automation Software Selection

Software requirements are a description of the features and functionalities of the system you want to implement. What do you need from it? What do you want it to do? Requirements convey what you expect from the software and how it will improve your business process.

Document Your Current Process

The key to creating great requirements is to know your current processes.

When selecting accounts payable automation software, the first step is to document, document document!

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

All AP processes have the same general steps:

  1. One of your customers sends in an invoice
  2. That invoice data needs to be entered
  3. It then needs to be approved
  4. Once approved, that invoice needs to be paid
  5. Now paid, your accounting team needs to have a copy

This is a very high level look at the invoice process. 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 every step and substep.

The better your cross-departmental team can map out your current workflow process – visually, if possible – and document weaknesses the easier it will be to automate your process and make it more efficient.

Identify Your Software 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 has to 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.

At CoreIntegrator, for example, we bring 20 years of experience working with companies big and small to not just automate their AP software, but to help our customers implement AP processing best practices beyond automation.

We’ve learned a lot about how great companies run their accounting and especially AP processing. And we love to share those best practices with our customers!

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
  • Automated input from email invoices
  • Match at least 90% of invoices and purchase orders on the first-pass.
  • Validate invoice data early in the process against information in downstream systems.
  • 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.

Create an RFP

Once you have documented your current workflow process as well as your requirements you can simply combine those documents to create a request for proposal (RFP).

The basic elements of an accounts payable automation RFP are:

  • Project overview.
  • Company background.
  • A detailed description of the project along with the reason why it is being undertaken.
  • Goals of the project.
  • Project scope and expected deliverables.
  • Current AP process documentation/map.
  • Software requirements.
  • Target deliverable schedule.
  • The principal point of contact.
  • Potential and existing roadblocks along with contingency plans.
  • Budget constraints.
  • Criteria for selection based on requisites and conditions for potential vendors.
  • Proposal timeline.

Use this document to communicate the full project requirements to potential software suppliers and conduct an objective evaluation of vendors.

Great RFPs that include current processes and software requirements make for great – and much simplified – vendor evaluation and selection!

Performing Vendor Evaluation for AP Automation Software

Doing the hard work of creating a great RFP allows your team to make apples to apples evaluations of different vendors.

Send your AP automation software RFP to several AP automation software vendors. If you are not sure where to start, use software comparison websites like TrustRadius and Capterra to identify and get a feel for AP automation software vendors.

The vendors will use your RFP to create a proposal tailored to your current process. And great vendors will not just tell you how their software will automate your AP – they will also provide best practice recommendations for improving your overall accounting and AP workflow.

Reviewing Vendor Proposals

When you receive AP automation software proposals from vendors read them carefully.

Make sure each of your requirements are addressed. Read the proposals with an eye toward whether the vendor is trying to apply a cookie-cutter solution to your AP process or if they are willing and able to configure their product to your specific situation.

Vendor Evaluation Checklist

When you review AP automation software vendor proposals it’s helpful to have a checklist of the most important aspects of software selection.

We suggest that, at a minimum your checklist include cost, features, customizability, integration and support.

CoreIntegrator Vendor Selection Checklist

Cost

Cost is obviously a critical factor in determining the AP automation solution you end up choosing.

Fortunately, when it comes to AP automation software the question isn’t ‘How much will it cost?’. The question is: How quickly will you see a return on your investment?

That’s right: AP automation software will not only pay for itself – it will create a permanent cost savings for your business.

How much can AP automation software save for your company? One way to find out how much you’ll save per year, is by using our cost calculator.

Be sure to run a net savings analysis of each vendor’s proposal: how much will the software cost vs. how much it will save your company.

Features

Features are the heart of any AP automation software solution.

If you clearly defined the features you want in your requirements then each vendor should specifically address those features in their proposals and what those features look like in their solution.

If they do not, they are not the vendor for you.

The most important feature is simplicity. Again, change is hard. So you want to implement an accounts payable automation system that is easy to use and learn.

This feature will make your accounting employees happier, your approvers happier and, most importantly, will ensure full adoption of the automated process.

Customizability

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.

At CoreIntegrator our solution for larger customers is CoreIntegrator Workflow. It’s a fully customizable workflow automation system that can be specifically tailored to your processes and needs.

On the other hand, turnkey systems are great for smaller companies. And we offer A/P One as our cloud-based turnkey smart AP automation system as an out-of -the-box AP automation solution for companies that process under 15,000 invoices per year. 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.

Integration

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.

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 systems they may not be the vendor for you.

Support

Support makes you happy

It’s critical to bear in mind that you are entrusting a vital function of your business to the 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. For example, here at CoreIntegrator we’ve been automating AP workflows for over 20 years and have worked with huge clients such as NASA and Bridgestone as well as small family businesses.

Rather than just selling products, at CoreIntegrator we believe in building partnerships. Therefore our job doesn’t end once your solution is installed. Our team will always be available to assist you whenever needed.

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

How to Select a Vendor for AP Automation Software

Choosing an AP vendor

Product Demonstrations

Based on your analysis of their proposals, your team should choose the 3 or 4 vendors that best meet your organization’s requirements and request product demonstrations.

Product demonstrations are an opportunity for the vendor to show you exactly how their solution is the best for your organization. It’s also an opportunity to take the various AP automation software systems for a test drive.

Your entire software selection team should participate in these demos so that all stakeholders are represented.

TIP: During the demonstration ask to have some custom processes that you use regularly created. You need to see the software solving your day to day struggles.

Here are key things to look for in sales demos that tell you a lot about the vendor and their solution:

  • Does the vendor touch on each of your requirements and demonstrate how their software addresses them?
  • Has the vendor taken the time to customize or configure their system to your RFP and requirements or are they just showing you a generic version of their software?
  • Does the user interface make using the system intuitive?
  • Can you easily follow along the product demonstration or do complicated processes and screen transitions make it hard to understand?
  • Will your staff easily understand how to use it?
  • How long will it take to learn the functions and get the full benefit from it?

Focusing on these questions during product demonstrations will not only give you a feel for the AP automation software and how intuitive and easy it is to use, it will also give you some insight into the vendor itself and how customer-oriented they are.

Vendor Selection

After product demonstrations it’s time for your team to choose an accounts payable automation solution.

And also select a backup solution in case you can’t agree to terms with the selected vendor.

We’ll explain why.

What to do When You Select an AP Automation Software Vendor

You’ve chosen an accounts payable automation software provider! Congratulations.

But there is still plenty of work to do before you sign a contract!

Discovery Process – More Detailed Requirements

Decision making

Once you have selected a vendor/partner – it is time (before contracts are signed) to perform a discovery process and document exactly what is to be delivered by your selected vendor based on your requirements. 

This documentation process should result in a project scope document that will be used to determine: 

  • Final cost
  • Deliverable items
  • Schedule
  • Resources to be used
  • Out-of-scope requirements (if there are any). 

Do not short cut this process.

You want to have a clear understanding of exactly what you are going to get from your selected vendor before you sign a contact in order to avoid misunderstandings later.

Post selection discovery is also an extension of your selection process. If coming to terms is difficult or if something doesn’t feel right about what was promised in the demo vs. what is discussed during post-selection discovery then consider going with your backup software vendor solution.

Contracts

Between your RFP and post-selection discovery you should have everything you need to write a contract with your selected vendor that explains everything to be delivered, what the implementation process includes (and does not include), as well as ongoing support and maintenance fees/policies.

Once you have a signed contract it’s time for implementation!

Conclusion

Selecting an AP automation software solution can be overwhelming. But by following these tried and true software selection processes, 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!

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