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3 Things to Consider Before Choosing an Automated Accounts Payable Solution

AP AutomationCFO StrategyFraud Prevention

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AP Automation is a very ambiguously defined term.

Many of the teams that are embarking on a transition into the world of automated accounts payable have drastically different ideas of what they are looking for. There are a lot of ways to ease the pain of manual accounts payable. You could automatically transfer invoice data into your ERP. You could also set up automated approval routing workflows. And there are also plenty of ways to streamline executing payments. Up until now, each of these ways has taken claim to the term “AP Automation,” which can create confusion if you’re an accounting team looking to get a maximum ROI.

The truth is that taking a holistic approach to automating accounts payable is the best route to an optimal ROI. Finding one solution that can address all of the accounts payable process provides broader benefits than solutions that are simplifying single steps within the process.

Essential guide to ap automation download link

As you research possible solutions, here are three things to know that will help you fully realize all the benefits you stand to gain from your investment in AP Automation:

1. End-to-End vs. Point-to-Point

While investing in point solutions helps smooth individual steps in the AP process, the approach ultimately limits the return on your investment, and can actually create overhead by forcing you to juggle several different vendors.

In contrast, finding one vendor that can automate the end-to-end process with one complete solution enables you to preserve all accounts payable operations—including approval and payment details—into one central location. You also simplify transitions between each of the four steps. At the same time, you avoid the overhead of managing multiple vendor relationships.

Leading solutions on the market today take this holistic approach by automating the end-to-end AP process:

Invoice Data Capture and Coding: Simplify invoice data capture by automatically digitizing all data with OCR technology, and leading solutions also add a layer of human review to guarantee 99.5% accuracy. No manual intervention is required at any point.

Invoice Approvals: Streamline approvals by automatically routing invoices to the appropriate department head for one-click approvals, and following up with an automated cadence of email reminders. Invoices above certain dollar thresholds can be set to require two levels of approval. With all invoices that need approval centralized into one location, department heads can easily stay organized and ensure quick approvals and on-time payments.

Payment Approvals: Enable CFOs and Controllers to authorize payments from any location with any device, preventing bottlenecks. Also provide an Approver dashboard to review vendor payment histories. This segregation of duties makes it very challenging to forge approvals, and all approvals are documented and preserved for easy access during audits.

Payment Execution: Make it easy to select the most advantageous payment method for each vendor. If a vendor accepts credit cards, you can pay by card with one click to cash in on rebates.  If you want to hang on to a payment until right before it is due, you can pay by ACH transfer and schedule the payment accordingly. Additionally, built-in virtual card platforms provide an added layer of security to card payments through the use of tokenization, which allows for one-time use card numbers that can be charged for each vendor payment.

2. System Integrations

Another key consideration is how well the solution integrates into your existing accounts payable workflow. Currently, there are two key integrations that you need to consider:

ERP Integration

A bi-directional integration into your ERP allows you to avoid the tedious process of uploading files that has typically been required to ensure both systems are in sync. With a bi-directional integration, data flows freely between your ERP and your AP Automation solution to ensure accurate and up-to-date information.

Bank Integration

While most solutions integrate with your bank to process payments, some do this more effectively than others. Some solutions will transfer money from your bank into an intermediary account, and then process the payment from this intermediary account on your behalf. While this gets the job done, it removes visibility from your payments, and makes the practice of daily reconciliations a challenge to keep up. Leading solutions will transfer money directly from your bank to your vendor, as if you made the payment yourself.

3. Electronic Payments

Electronic payments are becoming a bigger and bigger part of business’ vendor payment strategies. The benefits of paying electronically include:

  • Improved efficiency
  • Increased command over cash flow
  • Enhanced protection against fraud

Leading solutions provide easy access to them. When considering a potential solution, be sure to verify access payment methods like:

ACH Transfers

ACH transfers are becoming mandatory for a lot of vendors. These payments are more well-protected than paper checks, and can also be processed much faster. Leading AP Automation solutions enable you to set ACH-transfers up with just a couple of clicks, and executing them is just as easy.

Virtual Cards

Virtual Cards are also taking the vendor payment process by storm, and for a couple of key reasons. Payments via virtual card can be processed even faster than ACH transfers. However, these cards also utilize tokenization, which is a process that generates one-time use card numbers for every payment. This protects your company’s payment information, while also expediting the payment process. Leading AP Automation solutions will not only build virtual card platforms into their solutions, but they will also provide you with a list of all of your vendors that currently accept your card.

Transitioning to electronic payments is no simple task, so it is also important to consider finding a solution that can continue facilitating check payments on your behalf as you gradually make electronic payments a bigger part of your vendor payments strategy.

The Best Path to AP Automation

Investing in MineralTree’s accounts payable automation solution has improved efficiency for businesses by as much as 80%. MineralTree Invoice-to-Pay streamlines the entire accounts payable process, seamlessly integrates into your existing financial operations, and is the only solution that integrates with MasterCard, Visa, and American Express virtual card platforms. In addition, MineralTree provides an in-house virtual card payment option that every business can leverage at no cost.

With MineralTree, you also benefit from automatic functionality that includes matching purchase orders to invoices, scheduling payments, and applying discounts for early payments. These capabilities ultimately provide your company with increased efficiency across the AP process, improved vendor relationships, extended working capital, simplified company audits, and enhanced security protection against check fraud.

Curious to see what your accounts payable process would look like with MineralTree? Contact Us for a personalized demo


Scott Siegler
Scott is the editor of P3, and also a co-curator of The P3 Newsletter, a weekly email newsletter covering the best (and worst) in financial strategy.


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