Streamline Your Finance Function With Accounts Payable Automation For Dummies

Tipalti, alongside Wiley, have published Accounts Payable Automation for Dummies. The extensive guide, available as a PDF download, equips finance leaders with the knowledge to understand the benefits of AP automation and how to make the switch and get started on their journey. Tipalti have also produced a companion webinar, with panelists discussing key findings from the guide while sharing top tips from their first-hand experiences.

In this post, we’ve compiled a topline summary of key considerations as a teaser for the guide and webinar. This covers everything you need to know, including what AP automation consists of, the key processes to automate, how to make a business case for adopting an AP automation platform, and how to undergo change management within your organisation.

Understanding AP Automation

AP automation consists of using technology to reduce manual, repetitive, and time-consuming tasks throughout the entire AP cycle, including six overall functional areas:

• Supplier management, including the collection of contact details, verification of vendor banking information, validation of tax information, and supplier communications
• Tax compliance, including the legal requirement to verify and maintain vendor payment records. 
• PO management, including requesting, documenting, and approving POs 
• Invoice management, including receiving vendor invoices, syncing entries into ERP software, matching invoices to POs, and scheduling payments 
• Global remittance, including executing cross-border payments in multiple currencies
• Reconciling and reporting, including reconciling invoices and payments data

The continued reliance on completing these workflows manually has many downsides, such as:

• Stress on supplier relationships from late payments
• Errors and compliance issues caused by human errors during data entry
• Limits to strategic decision-making due to the slow and inaccurate processing of financial data
• A negative impact on the bottom line from increased staffing costs
• A lack of scalability from the use and complexity of non-integrated tools 

Essential AP Processes to Automate

Whilst the complete Dummies guide covers ten AP processes to automate in detail, we’ve picked a handful to consider from the many you will already be undertaking in your finance function:

• Onboarding vendors, onboard vendors with a self-service portal to enter all of their business information, including tax ID
• Streamlining approval routing, overcome bottlenecks with automated approvals for POs, invoices, and payments that have capabilities for multi-layer approvers
• Processing and matching vendor invoices, seamless invoice workflows with data scanning, data capturing, and invoice matching while allowing suppliers to upload their invoices via vendor portals directly 
• Scheduling payments, execute payments using the method specified by the supplier, including ACH or global ACH, wire transfer, digital wallet, or debit card

Making a Case for AP Automation in Your Business

Today’s unpredictable economy has resulted in businesses shifting from a growth-at-all-costs mindset to one based on sustainability. 

Finance leaders may be concerned about getting pushback from investing in new technology tools. This may be due to a continual reliance on manual processes, but that can result in higher operational costs and an increased risk of human errors.

The benefits of AP automation far outweigh upfront costs, and there is even an argument that failure to adopt these solutions will negatively impact business success. AP automation benefits include: 

• Boosting competitiveness, offset increased costs from inflation and rising interest rates 
• Enabling timely decision-making, AP automation can deliver a 25% faster financial close than manual processes 
• Cash flow insights, track cash inflows and outflows in real-time
• Reduced operational costs, lower costs from using automation to process invoices, alongside the reduction of late payment penalties and human errors
• Enhanced supplier relationships, automated supplier onboarding and vendor portals provide direct access to POs, invoices, and payment updates

A Business Case for Change Management

Automating your AP department will require you to undergo change management, and it’s normal to face resistance from stakeholders and encounter barriers before making the transition. Finance leaders must develop a plan to manage workflow changes and involve colleagues in the journey. Here is a step-by-step guide:

• Map your existing manual AP workflows, this should cover all tasks and people involved in workflows. Doing so will also allow you to identify process improvements before making the switch  
• Assess stakeholder needs, consult regularly with employees across the organization to create an action plan
• Select an AP automation solution, key considerations should include ERP and accounting integrations, current global support, implementation time, ease of use, and price 
• Conduct a pilot test and training, test your selected vendor on a small subsidiary to assess how well it works and to expose any challenges
• Implement and evaluate the solution, before a company-wide rollout, develop a plan for executing the implementation covering its scope, timeline, budget, roles, and responsibilities

Embracing accounts payable automation presents a significant opportunity for finance leaders to enhance efficiency, reduce costs, and improve supplier relationships. By streamlining essential processes and leveraging technology, organizations can navigate today’s challenging economic landscape more effectively. However, successful implementation requires careful planning and change management to ensure stakeholder buy-in and a smooth transition. By prioritizing AP automation, businesses can not only drive operational excellence but also position themselves for sustainable growth in the future.