In previous articles on AP automation we have talked about the benefits but before acquiring an AP system aren’t there some fact gathering, evaluation and planning steps to be taken? Let us suggest an approach.
The first order of business is to evaluate your company’s AP system objectives. This step may be easier after acknowledging the overall objective of accounts payable, which is to ensure payment of vendor invoices and expenses while maintaining accurate records and controls. Although increasing efficiency and reducing costs are always in the forefront, what other objectives do you have for AP automation? For example, allowing invoice payment information to be viewed by those outside of accounting to free up the time of your accounting staff. Other objectives may include faster processing time, greater accuracy, reduce staff allocated to data entry, cash flow viewing, automation of the reminder system, and a clearer understanding of what is outstanding and why.
One suggestion is to make a list of the features your company is looking for and place them in order of importance. This is will help you quickly narrow the field of potential providers to the one or two that offer the best fit for your organization and staff. The final determinates then resolve to cost and subjective factors.
AP automation should save you money over time when compared to the current cost of AP processing. Make an honest and thorough examination of the overall process and the time and costs associated with each step. Often when evaluating a process, we look only at the cost of the staff time. Don’t forget to examine the other subtle, but expensive, associated costs including printing of checks, reconciling the items cleared, data entry, postage, signature delays, matching backup, copying, filing mountains of paperwork, storage costs for documentation, printing costs for check stock, and bank fees for processing.
The last set of cost considerations has to do with staff training and vendor utilization. One often overlooked but an important question is how will staff react to the new processing environment and interaction with the AP automation vendor? Will this be an uphill battle or downhill ride?
So, what are the questions you should ask prospective AP automation providers? There are always issues that arise or circumstances that are out of your control but the more questions asked and answered the more likely those popup issues will be minor in nature.
Below are just a few examples of the types of questions you will need to get answered. Some questions can be answered from the sales information or website while others may require an in-depth conversation with a technical individual within the AP automation company.
- How does your automation system work?
- What is required to continue maintaining the system once up and running?
- What is the method of communication with my accounting system?
- What would the training costs for accounting staff and others using the system be and how often would training be needed?
- Would each new hire need training?
- Can that training be provided in-house or would outside training be needed?
- Where will the data be held and who is responsible for the security of the data?
It is often good to request contact information for other companies that have and have not chosen that system. Take the time to speak to those companies and ask why they chose the software or they chose not to use the software.
We are excited to be sharing our in-depth dive into AP automation options with you over the course of our next several monthly newsletters. The first AP automation option we will be discussing is Microix. You can find that blog piece, written by Lee Bengston, here. Here is a quick look at some of the other options we will dive into in the future:
- Nexonia – Nexonia offers a variety of products however we will be concentrating on the Expenses and Accounts Payable modules.
- ACOM Solutions – ACOM offers an “end-to-end” solution with the objective of processing all your business-to-business payments.
- AvidXchange – AvidXchange offers potential clients a series of modules from purchase orders to payment services with vendor interaction.
- Nexus Systems – The Nexus Payables system touts a system which provides “life cycle” processing.
- Possibly others; we welcome your suggestions.
- Implement scanning and receiving invoices by email, ACH payments, credit card importing and other available processes with no additive software or outside provider.
We look forward to providing you with insight, questions, and answers.