5 Questions to Ask Before Automating Accounts Payable Practices
5 Questions to Ask Before Automating Accounts Payable Practices
Today, many businesses suffer from painful traditional accounts payable practices. According to Goldman Sachs, North America spend an average of 187 dollars each year on payment processing expenses. Small business enterprises also sacrifice about 22 dollars a year to pay invoices with a traditional paper check.
However most companies do not consider the security risks, data entry errors, along with timeline ineffectiveness which are all related to outdated systems like traditional processes that mainly rely on paper.
A good accounts payable practices automation solution can provide relief to better position your finance department, in order to contribute to the organization’s overall success. But you might be unsure how to start assessing whether your business requires an update with an automation system.
Here we present 5 Questions to Ask Before Automating Accounts Payable Practices
1. Total Cost of Your Present AP Process?
Every Business wants to know their return on investment from implementing a new solution. The price of your present traditional processes is equally as significant in your current ROI equation. Hard expenses from substantial things such as checks, envelopes, and stamps might seem unimportant, but as recurring costs in large volumes they can add up to a pivotal spend.
Also, there are many soft expenses that should also be considered in your ROI equation. Ultimately, you are paying employees for their time, and so much of their time is tied up in tedious tasks in order to process traditional paper payments. Consider the value that you could acquire if the time each employee took to complete these tasks could be spent on some more strategic and effective business objectives.
2. Deployment – How it Works?
Examining the advantages of automating your AP is only a partial view of the larger picture. You should consider when and how a solution will come to life and be useful for your organization. How long will it take to complete the setup for new software, what’s included in this process, and what type of support you can expect once you are done and running?
Automating your payment and invoice process is not a costly process in the long run, compared to the traditional paper processes. At the same time implementing an accounting software could take seven to even nineteen months to fully complete. Whereas an AP automation solution can have the implementation finished within a month, with some flexibility to fit your organizations’ requirements and comfort level.
Many organizations do this in one shot. Others decide to automate their methods over short time intervals. With cloud-based AP providers, you will get a team of dedicated specialists working with your team directly. They will support employee training and implementation to aid you in working through issues down the road.
3. Is the AP Solution Compatible with Your Accounting Software?
This may be the most significant question of all for financial leaders with ERP or accounting software often seen as the business’ bible. An accounts payable automation system worth your time must be able to integrate with your present accounting software instead of forcing a migration into the latest central platform.
Today, many automated AP solutions can work in tandem with central enterprise resource planning, thus making the software you already depend upon the system of records, via file-based integrations or an API. Both these versions automate and file-based need to be compatible with your current accounting software, so the procedures are streamlined.
4. Automating AP – A Good Fit Based on the Organizations Status and/or Volume?
Below we list some informative aspects about where your organization is currently, or may be very soon, from a macro perspective.
- Status of Your Organization –
When your business enterprise is humming along at a constant speed, you might feel all right with keeping the status quo. But when your enterprise is fortunate enough to be in a scale-up form, you are likely debating whether there is a requirement to extend your accounting team to manage the overloading work pressure or to look for ways to free your staff from excessive manual data entry and put their time to more strategic use.
- Volume of Transactions –
It takes a lot of time to process one payment or invoice in a traditionally paper-based process. When you have more than a hundred invoices every month, you can save your team from drowning in paperwork with an automation system. On the other hand, if we don’t make this transition, we start seeing mistakes and ineffectiveness in the traditional paper process more frequently.
5. Can AP Automation Transform the Accounting Processes You Currently Deal With?
Procedural ineffectiveness has led you to this point where you are searching for a new solution. You might not have the time to explore every solution out in the market because most are still unable to solve your specific issues.
Hence, it is very significant to map out the methods you presently have in place so you can recognize exactly where ineffectiveness exists. Plus, the reason behind all this research, is to verify whether automating your processes can address the problems you face properly.
Also, you must understand what pieces of the procedures are sacred to you and how automation can have an impact on your control and visibility. Processing invoices and payments manually include multiple steps to route invoices, open mail, coding line items, entering data, applying postage, emailing payments, and more. All these steps can cost your organization time and money.
The right AP automation tool like SutiAP can ease your work pressure and optimize procedures by taking over the process you would rather not complete such as, manually entering data, stuffing envelopes, filing paper invoices, and more while keeping control over all approvals and routing within your hands All you need to do is code, approve, and choose type of payment.
Technology can enhance overall effectiveness within your organization’s financial operations. After you are armed with the right aspects to consider, automating your AP must be a significant part of your plan for the future of your business.