Sep 27, 2019
6 Steps to Painless Accounts Payable Automation
Author: Mark Brousseau, Analyst and Researcher in Business Process Automation, Brousseau & Associates
Time: 15 Minute Read
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Automation no longer is a matter of why, but a question of when for most payables departments.

Digital technologies such as intelligent data capture, workflow automation and seamless enterprise resource planning (ERP) application integration are significantly cheaper, more accurate, faster, more transparent and less vulnerable to compliance risks than manual and semi-automated processes.

But many accounts payable departments perceive automation projects as being painful.

Automating accounts payable doesn’t need to be a painful process if you follow the six steps below.

STEP #1: Analyze
Diagnosing your pain points is the first step towards painless accounts payable automation. This information will ensure your business case presents a sound problem- and solution-based premise.

For instance, Ardent Partners reports that accounts payable departments are challenged by:

  • Poor information access
  • High costs
  • Too many exceptions
  • Lost invoices
  • Missed early payment discounts

Uncover your department’s invoice processing pain points by identifying and documenting the workflows that are now in place, and the challenges and hidden costs that are tied to each one.

Stage #2: Engage
There are many reasons that accounts payable departments automate.

Achieving real-time visibility into accounts payable data, better aligning accounts payable with procurement, and capturing more early payment discounts are three priorities, Ardent Partners finds.

Setting clear objectives early-on helps ensure that a project stays on track.

Form a project management team that includes stakeholders from departments such as information technology, finance and accounting, procurement, human resources and sales and marketing. Create a prioritized list of objectives based on the business needs of these stakeholders. Be sure to solicit feedback on the objectives from front-line users such as travelers, managers and accountants.

Defining objectives will help you measure results, galvanize user support and avoid confusion later.

STEP #3: Evaluate
Confusion about technologies is a big reason many payables departments haven’t automated.

While payables leaders don’t need to become an expert in each technology that they deploy, they need to make sure that prospective partners will meet their objectives from a technical standpoint.

Here are some attributes you should evaluate:

  • Functionality
  • Ease-of-use
  • Flexibility
  • Reliability
  • Scalability
  • Interoperability
  • Security
  • Compliance
  • Auditability

Prospective technology vendors should be able to provide a ‘yes’ or ‘no’ answer to well-defined business requirements, or a brief explanation for ‘areas of grey.’ And never take a “canned” product demonstration at face value; ask solutions providers to demonstrate how their product will handle your approval workflows or business requirements, preferably using your actual documents.

Finally, always validate vendor claims through third-party references.

STEP #4: Justify
Building a strong business case is the linchpin of any automation project.

A business case for automation should include:

  • Hard savings: labor costs and physical document storage and retrieval
  • Soft savings: faster cycle times, efficiency improvements and better staff morale
  • Risk mitigation: fewer lost receipts, less fraud and streamlined reporting

The hard and soft savings should include conservative, moderate and aggressive estimates.

Once you have built your business case, create a summary page highlighting the hard and soft savings, risk mitigation and the assumptions used to create them. When all these elements are well-defined and properly articulated in a business case, it accelerates senior management approval.

Stage #5: Embrace
The next step to automating accounts payable is to embrace change management.

Resistance to change is a big challenge in accounts payable departments, where most managers “come up through the ranks” and front-line staff undergo less turnover than other finance functions.

Proactive communications reduce the risk of poor user adoption.

Executive sponsorship also is critical to getting buy-in from frontline users. The sponsor must make it clear to users that the effort is important. The sponsor should understand the challenges that created the need for adopting new technology and the details to justify the technology.

Stage #6: Measure
Finally, monitor and measure the performance of your new technology on an ongoing basis.

Periodically update stakeholders and senior management on the post-adoption results.

Following the implementation, begin monitoring how the new process is flowing, track the savings in supply costs, and log the reduced number of hours spent by employees, managers and accountants.

By gathering and reporting this data, you can begin to demonstrate the actual return on investment as the new technology is adopted by a greater number of users across your organization.

Automation is a top priority for accounts payable leaders.

The six steps described in this article will help make your automation project painless.


For more information about the steps to a successful accounts payable automation, check out our on-demand webinars.

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