Three Pitfalls to Avoid When Transitioning to Automated Accounts Payable
“If you don’t have time to do it right, when will you have time to do it over?” – John Wooden
Many businesses have realized the benefits of adopting cloud-based ERP technology. They are also recognizing the prime opportunity that this move creates to adopt new out-of-the-box cloud-based solutions that drive efficiency in the processes running through their ERP.
One such solution being adopted at an increasing rate is accounts payable automation. With the most reputable solutions built to integrate directly with your ERP, accounts payable automation represents an opportunity to learn a more efficient accounts payable process alongside of your new cloud-based ERP.
If you’re among the increasing number of businesses making an investment in accounts payable automation technology, here are a few costly pitfalls to avoid.
1. Investing in a point solution
The processing and payment of each invoice requires a lot of manual human intervention. This means that there is a lot of opportunity to eliminate repetitive and manual tasks, but make sure that you are taking a holistic approach.
At the end of the day, every accounts payable process includes these four distinct steps:
- Invoice coding – recording invoice data into the accounting system
- Invoice approvals – verifying an invoice is valid with the appropriate department manager, or by matching with corresponding purchase order
- Payment authorization – submitting payments for an executive / controller to authorize the release of funds
- Payment execution – transferring funds and sending remittance details
There are solutions on the market that are solely dedicated to individual steps within this 4-step process. These solutions are known as “point solutions,” and include document scanning solutions, document management and workflow solutions, purchase order management solutions, integrated payable solutions, and more.
Investing in a point solution will help you smooth out whichever step in the process it is geared towards, but ultimately limits the type of return you are getting on your investment. Automating the end-to-end process provides benefits that automating individual steps within does not, including:
- Centralization of all accounts payable operations
- Automatic preservation of all approval and payment details
- Simplified transitions between each step of accounts payable
While piecing together a mishmash of point solutions will potentially address the end-to-end process, the overhead that comes with managing all of those vendor relationships is simply not worth it. The best route to investing in AP automation is finding a single solution that addresses the entire accounts payable process.
2. Leaving IT out of the loop
It’s easy to see your IT department as a roadblock to be circumvented when transitioning to automated AP. However, after running into technical issues during implementation that trigger a department-wide fire drill, everyone eventually realizes that their IT team is actually their best friend during transitions like this.
As a rule of thumb, it’s best to run an AP Automation transition by your IT department while you are still in the evaluation process – before committing to a new vendor – in order to give it a proper heads up. This will enable IT team members to plan accordingly and set aside time for any work required on their end, and ultimately ensure a seamless transition.
Like many undertakings, planning ahead is the best way to avoid implementation issues. Map out your strategy well in advance with consideration to all stakeholders, and build in cushions of time for unexpected challenges so they don’t derail your implementation timeline.
3. Mistiming your transition
As mentioned at the beginning of this article, it is an excellent idea to implement AP automation alongside a cloud-based ERP. Upon transitioning your ERP to the cloud, there will inevitably be changes to how your accounts payable process is run. So why re-learn your AP process with your new ERP, and then re-learn it again after deciding to automate?
Businesses that implement a cloud-based ERP and automated accounts payable simultaneously are able to limit the time spent in “transition mode,” when teams are less productive as they are learning a new process. Rather, they learn their new accounts payable process as they learn the ins and outs of their new ERP, and start operating at optimal efficiency much more quickly.
Ensure a Simple Transition
Direct Integration into Your ERP
MineralTree integrates directly into your ERP. This means that all updates made in your ERP system are automatically reflected in MineralTree, and all updates made in MineralTree will flow back into your ERP system. This ensures that the information you are reporting is always up to date with no additional overhead required.
Direct Integration into Your Bank Account
Another characteristic of MineralTree that makes transitioning to AP automation so seamless is its integration into your bank account. By integrating directly into your bank account, you can have complete transparency into every payment while avoiding the need to use settlement accounts.