May 24, 2017 Ralph P
Congratulations! Your organization is the proud recipient of an automated accounts payable solution. A little bundle of joy that'll bring you and your finance team smiles and savings for years to come. Mazel tov!
By welcoming this little addition into your payables department, you should also expect to gain rebates and extra hours in the day. Gone will be the days of wearing out your shoes from scurrying around the office securing check authorizations.
But as any sleep-deprived new parent can attest, welcoming a new addition takes planning and patience—much like onboarding an automation solution in payables.
Following these steps will help you avoid sleepless nights and give you a better idea of what to expect from AP automation.
It's best to take a conservative approach to AP automation. So before you click that proverbial “yes to all" to AP automation, consider onboarding a handful of suppliers first. You may quickly discover that what worked in a manual process may not hold up in an automated environment.
Stress testing your workflow—what a gradual migration to full AP automation accomplishes—allows translation issues to float to the top without the risk of damaging supplier relations. After all, no supplier really cares how you pay them so long as they actually get paid.
Using a divide-and-conquer approach is best to accomplish this.
Half of AP should continue with the normal, status quo of manual processing, while the other half supervises the automated environment, intervening whenever necessary. Best of all, these digitally automated workflows are written in pencil, so revising any part of the workflow is quick and painless.
It takes a village
Onboarding suppliers—a crucial step to rolling out an AP automation solution—is an involved process requiring open communication. So pick up the phone and reach out to each and every one of your suppliers.
Let each know the upcoming changes in your payables process. Address how they should anticipate faster funds availability along with better payment visibility—oh, and be sure to mention the ease of accessing their payments status portal.
Suppliers shouldn't expect interruption in payment, but in the off chance that something doesn't go right, reiterate how you'll work to resolve any issues. Setting correct expectations is, after all, the cornerstone of open communication.
A gift that keeps on giving
Your AP department can expect to find savings in several places: purchasing fewer office supplies—such as postage stamps, envelopes and printer ink—to labor savings from no longer going on check runs to the bank. And by pairing those savings with rebates earned through card payments, you may even see AP go from red to black. How much have others realized through automation?
In the case of New Orleans College Prep, about $85,000.
What will you do with the extra revenue that AP generates?
Simplifying workflows—like remittance.
Much like the invoice is the key to AP, remittance is the key to AR. Simply put, it's how receivables knows who's paid what—and where it went.
In the printed-check world of accounts payable, remittance is the perforated bottom half of the check. With automation, that bottom half is automatically digitized and emailed to suppliers. AP no longer needs to splinter its workflow just to send remittance to suppliers' AR department.
True AP automation means that remittance is sent automatically.
Growing up quickly
Yes, you should expect better supplier relations through automation, too. After all, what supplier wouldn't appreciate faster payment?
That's the biggest benefit to automation—aside, of course, from the extra revenue it generates. Automating even a part of AP's workflow allows invoices to go from received to paid much faster. Doing so also empowers the AP department to renegotiate invoice terms—so long as a supplier is willing to accept faster payment in exchange for a discount.
Soon, you'll begin to wonder how AP ever got by without the agility of automation. You'll marvel at how quickly your AP department has improved.
They grow up so fast, don't they?