Procurement Technology

5 Clichés About Payment Automation Software You Should Avoid

Introduction

Having an automation solution for Accounts Payables (AP) can be a game changer in most companies. According to Gartner, “by 2020, more than 50% of global companies will have fully digitized their AP department making it possible to reduce payment processing time by over 75%.

However, while some organizations are automating their AP process successfully others are struggling with the effort – either because the change management associated with it is being carried out incorrectly or there are some execution mistakes made during the actual implementation of the automated solution . Here are five clichés about automated AP that you should avoid:

  • Not Getting an Internal Approval from Various Stakeholders
  • Not Determining the Right Value Proposition for Automation
  • Organically Built Solution Suite vs Stitched Up Solutions
  • Inability to Identify Risk
  • Lack Of Future Scalability

#1 Not Getting an Internal Approval from Various Stakeholders

When implementing AP automation, the first and most critical step that needs to be taken is getting approval from all stakeholders involved. This includes not only finance but also procurement and management teams who will benefit from the automated process. When it comes to executing an effective AP automation project , one of the biggest challenges faced by organizations is lack of involvement by suitable personnel in the early stages of planning. Lack of employee engagement can lead to serious delays or even failure of your initiative. Therefore it’s important to build a strong internal team which will serve as a driving force for your project . Ensure that the employees involved fully comprehend how beneficial this can be for them and what benefits they’ll gain by participating in the implementation process.

#2 Not Determining the Right Value Proposition for Automation

Internal value propositions play a key role in the success of any AP automation project , yet these are not properly defined by a majority of companies. A value proposition defines why this AP automation is going to be beneficial at your company and what benefits you will gain by implementing it. So make sure to determine whether your organization has an actual problem that needs to be solved with automation or if your solution would just add another layer of complexity. Automating something without having a proper business case behind it might only cause more headaches . Only once you have clear, tangible results can you start creating a strong internal team around your project . With no one involved, there’s almost no way it can succeed.

Learn More: Accounts Payable Automation

#3 Organically Built Solution Suite vs Stitched Up Solutions

The AP automation process has evolved in recent years from a manual process, which involved data entry and multiple data sources, to an automated one – where users can easily import invoices or receipts into their system through electronic data feeds (EDI), scan them into their document management systems for retrieval later on, then match with payments when they’re received.

In fact, some people have gone as far as saying that AP Automation will save your company thousands per year in labor costs alone. The real question is – are you willing to take the chance that this technology actually works?

There are plenty of options out there. The issue, however, is that not all software vendors who offer AP automation solutions are created equal . This means it’s up to individual organizations to do their due diligence in determining which option would work best for them. One important distinction to make when shopping around your future AP automation system is whether or not the vendor provides an organically built solution suite or if they just provide a stitched up solution that does not integrate well with other software and causes a lot of disconnect between disjointed systems. Organically built solutions can be understood by looking at them as solutions that were painstakingly designed so each part works synergistically with each other part, not just merely built to work with each other.

The differences between organically built and stitched up solutions can be summarized in the following points:

– Organically built solutions are developed by one team that works together all day long while stitched up solutions come from different teams that simply string their own systems together

– Organically built solution suites do not require any additional programming on top of what’s already stipulated in the software (no coding) whereas stitching multiple systems together tends to require extensive programming

– Successful integration of an AP automation system is dependent on having a common data warehouse which has become easier for organically built solutions since they were designed with this need in mind. Conversely, most stitched up solutions will have a ton of manual work to do

– Organically built solutions come with pre-configured data mapping within the source and destination systems so that no additional programming is required. Stitched up solutions, on the other hand, require a lot more coding for this very same task

– Most organically built AP automation solution suites are cloud based whereas stitching multiple systems together typically results in a hybrid which means there’s usually an on premise component as well as a cloud one

– The final result from an organically built solution suite is software that has been designed to carry out end to end processes seamlessly without requiring much effort from those who use it compared to stitched up solutions which require users to manually piece together different parts.

#4 Inability to Identify Risk

The fraud detection world has changed drastically over the last few years. No longer is it enough to simply detect fraud in a reactive fashion. More and more financial institutions are using automated tools in their fraud detection arsenal, allowing them to be proactive about preventing fraud from occurring in the first place.

In manual or semi-automated AP processes, there is no way for organizations to have complete knowledge of every single invoice that passes through them daily. This lack of proper analysis can result in major financial losses for an organization when invoices turn out to be fraudulent. As your organization continues to grow and add suppliers, this risk only increases without any sign of stopping.

Using AI powered solutions such as Zycus iRisk and Merlin AP Accelerator’s Invoice Reader, organizations can employ sophisticated technology and analytics to identify supplier risk before it turns into a major financial issue. These tools allow organizations to stay proactive about fraud and minimize the risk of duplicate or fraudulent invoices.

#5 Lack Of Future Scalability

The implementation of an automated solution is essential for organizations who wish to reduce operational costs, reduce manual errors and maintain overall quality in accounting procedures.

As the complexities related to Accounts Payable (AP) processes increases, it has become increasingly important for organizations to adopt automation solutions.

As the complexities increase, so does the volume .

The implementation of AP automation technologies often indicates that you are moving towards “excellence” in your business functions; however, this may not be true for all businesses as such a decision should be carefully considered before implementation.

Organizations need to plan ahead and think about future scalability as they will not only deal with more data but also larger data sets . For example, AI-powered solutions such as Zycus’ Merlin AI Suite would be a great fit for improving what is already a very good solution by leveraging artificial intelligence and machine learning.

Accounting professionals should consider an automation solution that can also adjust, learn and grow when needed . These solutions can help to reduce any possible bottlenecks in the future which may affect performance due to high volume or amount of data.

In today’s business world, organizations need to embrace change rather than fear it. In order to successfully implement AP Automation technologies, companies must have a solid understanding of their own needs in order to find the best solution for their workflow.

Conclusion

Organizations who are looking to reduce costs, minimize manual errors and improve quality in their AP procedures should strongly consider implementing an automated solution. Automation solutions can be adjusted, learned and grown as needed – making them a great fit for businesses who experience high volume or large data sets. Before implementation however, it is important to have a firm understanding of your own needs in order to find the best possible automation solution for your workflow.

This blog post will help you guard against the top 5 Cliches About Payment Automation Software.

[Source: https://www.gartner.com/smarterwithgartner/payments-transformation-start-to-take-shape/ ]
Mahak Khushalani

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Mahak Khushalani

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