Making the AP Automation Business Case
Driving accounts payable change within a business is challenging—especially when AP is overwhelmed with everyday tasks. A major hurdle is making the business case for AP automation to C-suite executives. Particularly a CEO, CFO, and Controller.
AP Automation Impact on CEOs
A CFO wants a cost-efficient system, real-time information, and metrics for decision-making. A shared vision includes access to the same data rather than duplicative information silos.
AP automation strengthens corporate governance by reducing fraud, errors, and overpayment risks. It can match or exceed benchmarking statistics for industry best practices, allowing them to beat the competition.
AP Automation Impact on CFOs
CFOs need access to up-to-date, real-time data. Present data in easy-to-understand formats, like dashboards with KPIs, trends, and drill-down reports.
AP automation software electronically onboards suppliers, captures online invoices, screens vendors, and reduces duplicate payments. Invoices, purchase orders, and receiving reports enter the system sooner than mailed documents.
With less time spent on approvals, CFOs can focus on more strategic matters yielding a favorable ROI for the company’s growth and profitability.
- Improving company planning and decision-support
- Achieving labor efficiency to reduce company costs
- Shifting part of payables workload to suppliers with vendor portal
- Enhancing corporate governance
- Improved profitability
AP Automation Impact on Controllers
Reporting to the CFO, the Controller is responsible for accounting and financial reporting and expense control. They oversee assets, including human capital.
If suppliers aren’t paid on time, vendors may cut off shipments. Customers won’t receive goods when they need them, or they’ll buy from another company.
With AP automation software, controllers can cut the costs of manual invoice processing and paper checks by choosing other payment methods. They can also speed up the AP workflow and ensure vendors get paid on time.
AP Automation Benefits for a CFO
AP automation helps to improve cash flow management and working capital, including financial adequacy. With automation, the CFO can run an efficient and functional operation in finance and accounting. The CFO automatically complies with multiple country regulations, including AML (anti-money laundering).
Additional Benefits Include:
- Improving the speed of operations and closing the books
- Increasing payments efficiency and methods
- Using global mass payments in multiple local currencies
- Proactively negotiating and taking early payment discounts from vendors
- Maintaining or improving the company’s credit rating and vendor relations
- Having vendor self-service onboarding for contact and tax information
- Accessing central storage of electronic documents through the online supplier portal
- Having system-generated automatic approval notifications and reminders for approvers
- Speeding up time to close the books at month-end and year-end
- Having access to up-to-date reports and information
Trends Related to AP Automation Software
- Self-service supplier portals
- Data capture and storage of supplier invoices and supporting documents
- Machine learning and artificial intelligence
- Scrubbing suppliers for fraud and regulatory requirements
- Automating approval workflow
- Multiple payment methods
- Automatically preparing tax compliance reports.
The ROI of AP automation
AP automation software saves up to 80% of processing payables end-to-end, beginning with self-service online supplier onboarding. There is a 25% acceleration of closing the books.
Tipalti, a leading accounts payable automation software vendor, provides a customized ROI report for the first year. You can request a report from Tipalti’s ROI Calculator webpage.
These results revealed that the ROI of AP automation is extensive. Payables and global mass payments automation provide a significant return on business resources.
Beyond ROI, AP automation improves corporate governance, including internal control and the quality of financial statements.
Chapter 2: Key Things CEOs, CFOs, & Controllers Should Know about AP Automation