The C-Suite’s Guide To Successful Accounts Payable Transformation
Every organization agrees that AP automation will prove to be beneficial for them in terms of increasing efficiencies and saving cost. Their belief is that AP process transformation will facilitate removal of labor-intensive and manually heavy, paper based processes and replace them with shorter invoice processing cycles and increased savings. However, it becomes difficult for organizations to decide where to start from.
There are apprehensions about the cost incurred, the time consumed and efforts required for this transformation. Due to these uncertainties, they decide to drop the transformation project and employ a plug-in or partly automate the process which may, in the long run, prove to be more harmful than advantageous.
Prior to reaching the decision of automating their invoicing processes, the top level executives should understand why they need automation. Analyzing the challenges faced by the AP department would help them immensely in this step. Shared below are a few challenges that AP departments commonly face that automation can resolve:
– Manual routing for invoice approval
– Manual data entry
– Paper invoices received
– Missing or lost invoices
– Lack of visibility
– Number of discrepancies and exceptions
These challenges can be compared side-by-side to evaluate the benefits gained through automation:
– Quicker approval of invoices
– Increased employee productivity
– Lower processing costs
– Better compliance
– Reduction in late payment penalties
Once all these factors are evaluated and the management decides to opt for AP process transformation and automation, it is imperative that they preempt the response and potential scenarios that they may face from their stakeholders and prepare well in advance.
Mentioned below are a few common scenarios that the C-Suites may face:
– Resistance from Stakeholders: Various stakeholders, internal and external, may resist this AP transformation initiative. The AP staff might show the most resistance as they are comfortable with manual processes. The Information Technology department may resist because they may be skeptical about their integration capabilities and the fact that they may be required to hire additional resources for accommodating the transformation project. The upper management may also show some apprehension as they may be worried about the ROI as well as the disruption that the transition may cause.
– ROI Timelines: One of the most potent motives for AP process transformation is the returns from the technology initiative, especially for the c-suite executives. While ROI from sourcing technologies may be hard to estimate, the returns from AP automation can be evaluated through cost reduction and rebates. This being said, the operational and efficiency based results will be evident sooner, whereas the strategic benefits may take time but will follow suit.
– Process Improvement Timelines: All benefits from AP automation might not reflect in hard-dollar savings. They will also be prominent in the form of process improvements like cycle time reduction and employee productivity enhancements.
AP Change Management Best Practices :
To ensure that the organization gains the most out of their automation projects, a more streamlined approach should be adopted. Organizations that adopt these best practices are more likely to achieve a successful AP process transformation through the following areas:
– Gaining widespread internal cooperation
– Involving external stakeholders
– Measuring the current and future state
– Choosing a suitable provider
– Staying within the project budget
– Completing the project within the determined timeframes
Read the whitepaper titled “The C-Suite’s Guide To Successful Accounts Payable Transformation” to learn the best ways to commence and executive an AP Process Transformation Project.
We think you’d also be interested in registering for our Upcoming Webinar By Jon Hansen, Editor Procurement Insights “Invoice Automation & Beyond : The New “Sophisticated” Tool For Finance“