Demystifying Accounts Payable Automation

Demystifying Accounts Payable Automation

According to the Ardent Partners market research study: ‘The State of ePayables 2022’, 70% of mid-market companies have made Accounts Payable (AP) automation a priority. While this positive trend represents a 48% increase over that of the previous year, many companies are still hesitant to adapt the technology, especially in the UAE. Why?

Ihab Hashwa

Ihab Hashwa

Ihab Hashwa, CEO at ISTA, mentions :

“In the Middle East, people have the idea that it is too long and too complex to implement an AP automation software(…). People are not even sure what are the benefits of AP Automation because it is new to this region.”

Why manual processes are risky?

1. A complex process

When an invoice is processed manually, the average processing time is 22 to 35 days. This is mainly due to how complex the manual processes are. Indeed, when several people are part of the invoicing process, they all have to enter the data manually, print the invoice, sign it, give it to the right person, and so on.

2. Manual costs

As the process is very time consuming, it implies manual cost, including processing and archiving costs. This cost is very easy to calculate knowing that an invoice takes at least 22 days to be processed, and the salary of an accountant.

3. Late payments

As the process is taking a long time, the accounting department is facing another issue: payments delays. Globally, 31% of invoices are being paid late. Regarding that, the company cannot benefit from any discount or any preferred pricing with the suppliers.

4. Lack of visibility

During a manual process, there is no way to follow where the invoice is in real time. This creates a lack of visibility on the overall process, and lead 3.5% of erroneous or double payments.

5. Victim of fraud attempts

70% of the companies globally are facing fraud attempts. Because of the lack of visibility, companies with manual processes are easier targets for fraud attempts.

6. Not compliant

Long processing time, manual costs, late payments, and lack of visibility leads to a process that is not compliant with the increasing regulations. Indeed, with all these risks, the accountants are not likely to be able to find all the documents that needed to be provided during an audit.

AP Automation Myths Busted

The following are some of the most common misconceptions about AP automation countered by actual testimonials from financial professionals who adopted the Yooz Purchase to Pay & Account Payable Automation solution.

1. The necessary time needed for implementation and the complexity of the set-up process are beyond what we can handle

“I liked the ease of implementation (…). Yooz adapted to our business needs and ERP system instead of us adjusting to the software.” Bryan Schmidt, Controller at Unite Here Health.

2. We’re not sure that there will be an increase in productivity

“We’ve been able to redeploy our AP staff into more strategic, value-added work. They are better organized, have eliminated stress, and feel like they are actually contributing to our company’s success.” Shawn Delaney, Controller at Bridgevine.

3. Switching to AP automation leads to increased risk of fraud

“It is easy to find and manage every step of the AP workflow because everything is captured in one place. We have full visibility into the entire ledger.” Adam Maurer, CPA, CFO at Deutser.

4. We’ll lose control over our processes

“We now benefit from better traceability and reliability (…) and an instant view of expenditure across all of our sites” Frédéric Rivierre, Administrative and Financial Director at Ducasse.

5. Implementing a high-performing AP automation solution will be costly

“Many of the providers we considered offered a 500-pound solution for our 10-pound problem. Yooz, seamlessly integrated with the Sage Intacct ERP, was the perfect fit. And it will scale as we grow.” Tim Carter, CFO at Salsarita’s.

6. The actual results aren’t always obvious

“Storing documents in the cloud has solved most of our pain points. Documents are easily accessible by all department managers. It’s much more secure. And we’re saving money and time by not shredding, storing, or shipping documents.” Jason Kleve, Controller at Transwest.

How to Find the AP Automation Solution That Defies All Myths:

Not all automation solutions are made equal but the right one should at a minimum offer a good balance between:

  • Rapid and immediate extraction (the ability to extract all data automatically without any configuration)
  • An easy user experience (fast, low-stress implementation and a cloud-based platform accessible from anywhere at any time)
  • Broad functional coverage (the ability to integrate and automate all aspects of the process)

However, to achieve all three at least the following criteria must be considered:

  • Ease of integration with existing accounting, ERP, and CRM software.
  • User-friendly dashboards to follow-up on workflow activities and performance.
  • End-to-end traceability and security of operations.
  • Existing client base.
  • Automatic detection of any irregularities and security threats.
  • Quality and availability of ongoing customer support.
  • Use in SaaS/Cloud mode.
  • Compliance with existing and future regulations.
  • Remote access and mobile functionality.
  • Automation of invoice entry and validation.

So, what are you waiting for? Book your demo here!

 

Featured image credit: Edited from Unsplash and Freepik

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