Businesses of all sizes and across all industries use accounts payable (AP) invoice automation to save time in each stage of their invoice processing. By eliminating paper-driven tasks, such as routing, tracking, retrieving, faxing, and more, businesses improve overall accuracy, efficiency, and visibility with AP automation. Finance departments can reduce labor costs and gain better control and understanding of expenditure. But within AP automation, there are two core options and then multiple considerations within each of those options for each business to evaluate and consider before implementing.
Option 1 – Outsourcing AP Automation
This outsourced approach to AP automation means you’ll enjoy a hands-off method of invoicing. You can choose to outsource the entire process or only certain silos of your AP automation. With outsourcing, you will primarily be looking at the invoice capture and the invoice data entry parts of the process. If you decide to outsource the capture of invoices, for example, you won’t touch a piece of paper or see an email attachment. A third party will perform the capture process, and you’ll pay fees based on the number of pages being captured. In an outsourced scenario, you can also choose to have your AP automation provider perform the indexing/data entry process. This data entry silo typically has fees associated with it based on the number of keystrokes being performed. In some cases, both the capture and data entry fees can be combined into a per invoice fee based on your preferences.
The invoices and the data will now be sent into your AP workflow solution. You will have options to either use the workflow tools within your ERP system or use a workflow solution that sits in front of your ERP system. Workflow will be the first time you look at an invoice if you have chosen to use the outsourced capture and data entry services.
Option 2 – In-House AP Automation
If you choose not to outsource invoice capture or data entry, this can be part of your in-house solution. An in-house solution can be in your data center or provided in the cloud based on your preferences. The capture and data entry part of the solution lives on its own, regardless of the workflow tool chosen. Invoices will typically be captured via email attachments or paper, which you can scan within the solution. Once the data validation phase is complete, the invoices will be sent to your workflow solution. Below are a couple of significant decisions that need to be made to determine the best tool to use for workflow.
Doing AP Automation Inside Your ERP System
One benefit of integrating AP automation with your ERP system data is that it can validate data throughout the capture or workflow phases. It can also allow for the ERP workflow to handle various workflow processes and can enable employees to retrieve documents from within ERP, so they don’t have to work in other applications.
Many businesses choose to do AP automation inside their ERP systems because they want to maximize the investments they’ve made in those systems. If this is the route you choose, then the ERP system can handle certain workflows like the approval process. Your business will benefit from streamlining many processes through one solution as users will have a single point of entry to perform many tasks. And by giving users the ability to stay within your chosen ERP system, you’ll see accelerated user adoption because users won’t have to learn new interfaces.
A second option for workflow is considered where a solution inside your ERP system doesn’t necessarily have to be native ERP technology. There are third-party products not native to the ERP system that can be plugged into the ERP interface to replace the native workflow tools with a simpler and more functional tool. These tools have been developed using the native ERP programing language and look and feel like the ERP system. This scenario may be preferred because of the consistency within the user interface and due to the fact that organizations prefer to have their users work inside of the ERP system. As an example, these tools can appear in an ERP system like SAP as a new Tcode but will replace the standard SAP worklist tool that handles workflow for invoice Tcodes like MIRO or FB60.
Doing AP Automation Outside Your ERP System
A third option is to do AP automation outside your ERP system, which means all workflow is performed externally in front of the ERP system, and the ERP system is primarily used as the system of record to pay invoices. This option is typically chosen for the below reasons:
- ERP workflow tools are more difficult to implement.
- Workflow tools external to ERP are simpler to implement and exceed the ERP tools in flexibility and functional capability.
- Or the majority of the users who participate in workflow are not ERP users.
Workflow tools that provide more flexibility include options to work from applications such as Microsoft Outlook, a graphical dashboard, a web portal, or from mobile devices. You’ll still be able to integrate your ERP with AP automation, and the integration will allow for transactions to be created into the ERP system and related invoice documents to be retrieved from within the ERP interface.
The mobility aspect of AP automation can extend the capture, workflow, and retrieval actions to mobile devices as well as help eliminate spending time and resources trying to mobilize ERP if you choose to use your ERP workflow. Users can review and approve transactions from their mobile devices in the field while your ERP workflow is still driving the transaction. In this scenario, AP automation complements the ERP workflow by configuring case management and workflow software to help mobilize the transaction.
If you’d like to learn more about how AP automation can help your business save time and money, reach out to All Star Software today. We’re experts in streamlining invoice processes, and we’re here to help you.