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Is "A/P Automation" just trendy jargon?

I have to say, I kind of think it is.

I just had a meeting with a guy, whose company shall remain nameless, and all I can think is "I will never get that 30 minutes back."

It was all about "the cloud" this and "the cloud" that. Whenever I hear "the cloud," I sincerely wish we were talking about the weather.

Okay, so I can now...

"See the state of payables instantly!"

Ummm... we had that before the cloud.

"Faster payments!"

I don't know about you, but we're not exactly chomping at the bit to pay net 1.

Maybe he said something else while I was daydreaming about my high school girlfriend, but I can't really recall anything important.

What do you think?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Funny.

A/P automation can be lots of things, from having your software email the invoice, to providing your vendor the ability to look at their account without calling you up to a "seamless" EDI and with some SAAS based systems they have a built in e-Invoicing.

Will it get you paid faster... not sure, but the argument that I didn't get the invoice is really getting harder to sell....

Anonymous
(CFO) |

What do I think? I think that THAT is a long time to be still daydreaming about your HS girlfriend. Hopefully she turned out to be your wife. If not, you have some splanin' to do. Oh wait, you mean AP Automation?

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

David
I wish I was a fly on your office wall during that conversation:)

You raise some good points.
If cloud is the answer, what really is the question? In my humble opinion, if the cloud app fails to provide the functionality you need, how on earth can you buy it?

If AP automation is the answer, what about PO effectiveness? The invoice normally comes AFTER the services/goods are provided, so what about improving controls over purchase decisions?

Wayne is right on a number of fronts re some steps that can be automated. Another is non-check payments; another is improving the notification step when your vendor executes a drop ship to your customer but fails to tell you at the same time.

In many new age companies, the old AP process - I order stuff, receive stuff, then I get the invoice, I enter it and then I pay it and reconcile my bank account-is being replaced by debit card/credit card purchases that change the AP role dramatically.
As the CapitalOne credit card ad says, "What's in your wallet?"

Cheers
Len

Anonymous
(Agent) |

Depending on the current set up of your AP systems, AP automation can be HUGE in terms of process efficiency and greater visibility to all things AP. In my current position, when I started if there was a problem with an invoice, let's say the Goods Receipt wasn't completed, the invoice sat on a clerk's desk until the issue was resolved. I changed that process so the invoice is then parked (put in a holding pattern) until it can be posted. This now gives us a more accurate view of liabilities. EDI is also an automation that can save a ton of time - our 3 largest vendors are or will be on EDI and that saves processing about 600-800 invoices a month. That's about .5 FTE for our group.

With more advanced solutions like e-invoicing and OCR, the time savings will be even greater. Also, with some of the provider solutions available, you can see where the hold up with invoices really occurs - is it a slow AP clerk? is it a plant location that's slow to enter receipts? Getting invoices in the system and visible faster also means better cash forecasting and greater ability to take advantage of available early pay discounts when they make sense. Allowing PO invoices to automatically post if the 3-way match is good further reduces the number of invoices the processors need to touch. When that happens, the AP team can do more value-added work or the number of staff can be reduced.

Vendor self-service portals are another great tool that fall in the automation category. Giving your vendors access to update their remittance information and check invoice status reduces the number of calls and emails the AP team has to take.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

I always enjoy your posts, David. If the HSGF knew, she might be flattered.

As others here have indicated, it's more than trendy jargon and has real benefits. Although, I too am a little tired of hearing about "the cloud."

Here are two good whitepapers on the subject:

"AP Automation Best Practices"
https://www.proformative.com/whitepapers/ap-automation-best-practices

and...

"Accounts Payable: Embracing The Strategic Evolution"
https://www.proformative.com/whitepapers/accounts-payable-embracing-strategic-evolution

Best... Sarah

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