Digital-business priorities are finding a prominent place on the company agenda, and more executives expect IT to drive growth through the use of these technologies over the next few years…It is therefore increasingly important for IT executives (as well as business executives well versed in these issues) to continue helping others throughout the enterprise to understand the adjustments required to prepare the company for capturing the full value from new technologies – and their role in making these adjustments happen.
Some ERP systems have an AP Automation function, and some do not. There are pros and cons to each offering, but whether or not your ERP system includes AP automation, allows integration - or none of the above, there are a number of important factors to consider.
Making the case for a new way to approach workflow, purchasing new software, or implementing an AP Automation solution will take thoughtful planning. Particularly in finance, where one wrong move can spell disaster.
However, the upside of prudent planning can mean significant time and cost savings, as well as a smarter way of working.
When implementing an
Let’s face it - the executive team must believe in the project in order to empower their teams to implement a new system. If management doesn’t support it – you may as well be talking to a brick wall. Projects without champions always fall flat.
Here are 5 steps to help you reduce roadblocks and get on your way to better, more efficient AP management.
State Your Case
Understanding the business case for automating your AP may seem straightforward to you, but the way you communicate the benefits of a new system to your employees and executives can make a big difference.
How will the business be impacted negatively or positively? For example, illustrating the potential for cost and time savings by reducing the procure-to-pay time may be music to the CFO’s ears.
For your AP manager, however, the notion that all invoices can be stored, routed and approved electronically could simply mean more time for him / her to focus on more meaningful work.
Any software implementation or integration means time spent organizing data and testing. In the short term, there may be some challenges for your staff, but ultimately, they will realize long term benefits.
Communicating both is a necessity.
AP Automation and ERP Integration can take many forms. You can start with simply scanning and uploading invoices to a database via a document management system. Or you can take a full-on approach and fully integrate AP with your ERP system.
Don’t take for granted that people know what you are talking about. Clearly identifying to all stakeholders what you are specifically looking to do and the most efficient, cost-effective way to do it – is critical to gaining support.
For example, let’s say you are looking to fully integrate an AP Processing with ERP. It is important to work with AP Automation products that can integrate directly with an ERP in order to provide the benefit of streamlined reporting and workflow – without your teams having to do double the work.
If you are planning to start small and automate your invoice processing as a first step, make sure you are working with a system that is flexible enough to integrate with an ERP down the road.
Benchmark and Quantify
Aberdeen estimates that entities with executive support for the AP Automation projects are 40% less likely to have lack of internal support or their improvement efforts.
That’s a large percentage when you are trying to rally the troops for a big change. In order to get the support you need, you will need proof that this will actually save time and money in the long term. Measure how AP Processing can have a positive impact on the business that results in a financial benefit to the company and to the staff in order to demonstrate value.
The best way to start is to benchmark your current processes. Benchmarking gives you a great launching pad for measuring performance and reporting on specific ROI.
For example, measure the time it takes to manually process an invoice from receipt all the way through to payment in calendar days, human capital and handling costs. Then make the case for how this can be improved.
Establish key performance indicators and metrics for success – including:
- IT Costs of hardware, software, training, support – Measure these costs against how much you may save in time and human capital.
- Data efficiency impact – Better data equals increased insight. How the information gets from point A to point B and the impact that speed has on your organizations cash management – like increasing visibility into payment status and capturing early pay discounts – can mean reductions in bottlenecks and late payment penalties. Demonstrate how this data can be used in an innovative and beneficial way.
- Paper costs – What is the current cost of paper to print, copy, file, fax, mail – these add up. Calculate the cost of what you can save on paper stacks, storage and shipping, and demonstrate how effective AP Automation can make an impact by reducing paper and streamlining interdepartmental communication.
Best in class enterprises process invoices 81% faster than laggards.
Establish Teams, Tasks and Timelines
“By failing to prepare, you are preparing to fail.” Benjamin Franklin
If you have ever been through a software implementation or systems integration, you know how important it is to develop project plans with clearly delineated tasks and frequent updates.
The biggest challenge may be keeping your AP stable during the entire process – and you can be sure this is something executive management will mark as a top priority.
Develop a plan in advance that takes all of this into account ahead of time to reduce anxiety and highlight areas within your organization that need specific attention.
Make sure the team consists of key personnel in all departments who will use the system and clearly indicate who is responsible for which tasks – including operating your legacy system until it is time to “go live” with the new one.
Creating a project plan with milestones and performance checklists can not only help management visualize the timeline of the project, it also provides a tangible roadmap for all stakeholders.
What is the time frame for the company to fully realize the value of the system – say, when an invoice is finally captured, routed & approved electronically? Or is it when your AP is fully integrated with your ERP?
Make sure you give enough time in your project schedule for importing data from a legacy or paper system, training, running parallel, and going live. Take into consideration your organizations “busy” season and work around that timeframe.
Maximizing the impact of automation on all AP processes, from receipt to scanning and approval workflow through payment is the end goal. Respondents that have completed this picture report invoicing processing costs 21% lower than others, while also securing early payment discounts on more than twice the number of transactions.
Become the expert
If you are making the case for a new system, you better make sure you can be a terrific resource when it comes to asking the right questions and getting the right answers.
- What are some ways you see your company gaining the most benefits?
- What are some of the pitfalls you may experience and how might you overcome those same obstacles?
- What are some proven, tangible ROIs that you can envision and then start to measure?
Making sure you have done your own research, reviewed relevant
Whether you are moving from paper to automated processing, or upgrading your AP / GL / ERP integration capabilities – preparation is the key to success. Developing a well-researched and thoughtful plan around your idea can only help get others on board and bring your business to the next level.
Want to learn more about the benefits of integrating ERP with automated AP processing? Take the docSTAR