The internal discussion happens every year, doesn’t it? “We don’t have the budget … We don’t have the resources at this time … We have another project that is taking priority … Let’s consider AP Imaging and Workflow Automation next year …” Automating your AP department may feel like a daunting undertaking, but can you really afford NOT to do it?

If you break down the project into a few key considerations and partner with a proven provider, this could be the year! But in order to fully maximise the benefits of AP automation (and avoid the pitfalls), here are 10 factors you should absolutely keep in mind, when evaluating your options:

Examine and document your existing Accounts Payable processes so that you can easily communicate how invoices are received, the format they arrive (e.g. Paper, EDI, email, etc…), how approval routing is completed, how invoices are coded, how long invoices must be retained and how PO vs. Non-PO is processed just to name a few. Keep an open mind to new processes–the application of best practices will save enormous amounts of time and effort!

Understand the cost benefit analysis associated with your project. What is the Return on Investment (ROI) you should expect and how many months until the project pays for itself? Take the time to really understand the ROI calculator being utilised and err on the conservative side to ensure that the numbers are as accurate as possible. A cost benefit analysis that your Controller or CFO buys into, is a project with a much greater probability of approval. A fully integrated AP Imaging and Workflow automation solution will cut your AP process costs by 50%. You can’t afford NOT to do this… Really! 

ERP Integration is extremely important to the success of your project … this cannot be emphasised enough. Understand the options available for the solution selected and ensure that your expectations match what the new system actually delivers. Some systems add transactions to your Accounts Payable module realtime and validate against the most current vendor and GL data, while others require staging tables and nightly batch uploads. Also, make sure you understand how document images may be attached and retrieved from within your accounting system. The level of ERP integration can stifle organisational adoption and greatly influence your staff’s satisfaction with the system.

Indexing Options vary widely from one OCR (Optical Character Recognition) application to another. Some systems require templates be setup for each vendor where XY coordinates are utilised to indicate the location of an invoice#, invoice date, PO#, etc. Templates are tedious to maintain and accuracy degrades over time. Other systems read the invoice much like a person reads an invoice–labels like vendor, invoice date, remit to and amount are identified and associated with corresponding data values. 

Imaging as a Service may be the best approach for your organisation. Invoices are sent directly to the scanning (or imaging) service bureau via lock box or PO Box for processing. The service bureau will open envelopes, remove staples and paper clips, sort the invoices by type, scan, index and validate the invoices to then be transmitted directly to your approval routing engine. Your AP environment is now paperless without the worry of filing, storing, tracking retention dates and managing document destruction.

Is your organisation’s current Accounts Payable workflow structure Centralised or Decentralised? Are invoices processed in a single location? Will scanning take place at remote locations? What are the software and hardware considerations across the organisation? Often times, an efficient method of aggregating invoice documents is to “capture” (scan only) at remote locations, but perform the OCR processing at a central or corporate AP office location.

Do you have Historical Documents that are present on shared drives, various folders and individual workstations? You may have a rudimentary scanning mechanism in place that images documents but doesn’t index or archive documents efficiently within a robust enterprise content management repository. These historical documents should be migrated over to your new solution’s ECM repository.

Document Security and “Audit Ability” are paramount to Accounts Payable Automation Solution. Documents must be archived and secured by company, division, department, group, individual, etc. to ensure that only authorised personnel have access to documents.

Consider the preferable type of licensing for your organisation, Perpetual Software License or Software as a Service (SaaS). SaaS continues to gain more and more momentum; cloud-based systems are easier to maintain, upgrade and deploy that an on-premise option. However, running a 5 year total cost of ownership analysis against licensing options under review is an important part of your due diligence. If you have a full IT team in place already, an on-premise implementation may be more cost effective.

And lastly, the Implementation Resource Requirements is a consideration that must be quantified early on within your evaluation process. Your solution provider should be able to produce a detailed document which breaks down the effort requirement for IT and business user personnel over the course of the implementation.

Keeping these key considerations in mind, a well-planned and managed Accounts Payable Imaging and Automation project can actually be a pleasant, enjoyable and very rewarding experience. An increase in efficiencies, along with a 50% reduction of AP process costs, shouldn’t be pushed out to next year!

Vance Talbot is a Senior Account Executive with Ascend Software, which offers a financial automation suite that  integrates with most leading ERP systems. vtalbot@ascendsoftware.com