7 Steps to Choosing a Stellar Accounts Payable Solution

July 12, 2017

4 min read

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Automation makes invoice processing less costly, faster, more accurate, more transparent, and less risky. But choosing the wrong accounts payable solution undermines the benefits of automation.

Not to worry. Choosing a stellar system is easy if you follow these seven steps:

1. Set your objectives: Creating short-term and long-term goals is the first step in selecting an accounts payable solution. Common automation objectives include: eliminating paper handling and manual keying; reducing labor costs; accelerating cycle times; enhancing visibility into the status of invoices; and better integrating accounts payable with downstream systems. Setting these objectives keeps the evaluation team focused on what’s important. 

2. Clearly define the processing requirements: It also is important to develop functional requirements before diving into technology evaluations. Start by performing a thorough analysis of the total volume of invoices and payables documents your department processes each month, the types of accounts payable documents that need to be captured and processed, and the processing that needs to be performed as part of the process. Then look at any staff that needs to participate in approval, posting and exceptions processes and their functional responsibilities. Be sure to involve front-line staff in developing the functional requirements, and solicit feedback from stakeholders, such as procurement and treasury, to avoid functional silos and to ensure that their needs are met. If you are using a request for proposals as part of your evaluation, resist the temptation to haphazardly include a laundry list of questions. 

3. Get technical: Evaluation teams must ensure that the system will meet critical technical capabilities such as invoice validation, data extraction, two-way and three-way matching, electronic approval and exceptions routing, and the upload of approved invoice information. Be sure the system allows users to configure workflow rules to eliminate manual paper handling. Also consider the level of integration required with downstream systems such as enterprise resource planning and general ledger systems. Vendors should also show that their solution meets your corporate standards for audit, compliance, reporting and security.

4. Look beyond a vendor’s brochures: Evaluation teams must carefully investigate potential technology vendors with an eye toward finding a business partner. Start by creating a shortlist of potential vendors based on vendor-neutral thought leaders. Next, validate vendor claims through third-party references, preferably with end-users whose processing requirements are like your own. Also dig into the vendor’s organization: understand the company’s history and the tenure of the executive team, review the company’s financial statements, gauge the company’s stability, learn the company’s recent growth trends and determine the number of customers the company has in your industry and its customer retention rate. Evaluation teams should also understand the vendor’s user support options. 

5. Don’t overshoot the available budget: Understanding the budget available for automation keeps an evaluation team grounded as it evaluates potential systems and vendors. There is no point in engaging with a vendor whose technology is too expensive. Selecting a system that meets budget constraints will also help win the backing of senior management. 

6. Make sure your business case covers all the bases: A business case for automation should include three key elements: the hard savings (e.g. labor costs, physical document storage and retrieval, software licenses), the soft savings (e.g. faster cycles, efficiency improvements, enhanced supplier relations), and risk mitigation (e.g. fewer lost or misplaced invoices, better document tracking and control, streamlined reporting and disaster recovery).

7. Head off a poor implementation: Look for vendors with a professional services team that is skilled in process improvement. Require vendors to conduct a thorough analysis of your current processes, and ensure that they understand your desired end-state — before the implementation begins. To ensure the correct configuration of your system, vendors should become well-versed in your business processes, applications, challenges and objectives.

Following these seven steps will help ensure that you choose a stellar automation tool for your specific needs.

Now that you’ve chosen the best accounts payable solution, it’s time to sell the need for it to senior management. Download a recording of our latest webinar to learn how to make a business case for AP automation.