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When AP Automation Goes Wrong

when-ap-automation-goes-wrong

There’s no question that AP automation, when done properly, saves money. The sheer number of invoices (paper and electronic) an AP department is tasked with processing in a medium-sized business is significant. But what happens when the process of “automating” causes more problems than it solves?

AP Automation is a natural progression for businesses to ensure cost savings, and also free up their staff to concentrate on more productive activities, other than data entry and mail scanning.  However, instead of hiring a company to handle all the steps required to manage an effective AP automation solution, there has been a trend recently for small to medium sized businesses to bring their AP automation in-house. That is, to try and automate their AP processes via software alone. This option sounds great in theory, however there are some major inherent challenges with in-house AP automation that many businesses fail to consider.

learning-curve

AP Software Learning Curve

All software comes with a learning curve. Some platforms are more complex and cumbersome than others. If a software interface is posing significant barriers to AP management staff getting their work done, then the in-house automation is likely costing more than it is saving. Plus, if the solution isn’t accompanied by a reasonable support package, your AP staff may find themselves trying to figure out how to work with the software on their own.

Then there’s the constant issue of upgrades to operating systems, and other software conflicts that may pose significant problems. Not all software plays nice together, and in some cases, data can even end up lost or corrupted. This is decidedly bad, when we’re dealing with invoice payments and other critical AP functions.

Consider also what happens when you have an employee that is well-versed in using the AP automation software, and that person decides to leave the company. That means, unless there is sufficient documentation in place, the succeeding AP staff member will have to start the learning curve from scratch.

By outsourcing your AP automation, the responsibility is on the outsourced company to remain up-to-date and keep on top of software advancement.

error-rates

Error Rates in Optical Character Recognition (OCR)

A tool is really only effective if it is used properly. AP error correction is likely one of the more time-consuming stages of the Accounts Payable approval process.

This involves the manual act of checking whether the software was able to capture the correct data from the scan; that there were no discrepancies in amounts, or incorrect importing of field data into the system.

If your AP staff is spending a significant amount of time “training” the software about how to read the myriad invoices from your vendors, then it can end up refuting the purpose of having an “automation” solution in place.

In addition, OCR despite its advancements, is not foolproof, and needs human intervention to ensure accuracy. This shifts the workload from manual data entry to proofreading, and still ends up taking time away from the AP staff’s ability to do the high-level thinking they were likely hired for in the first place: forecasting, reporting and budgeting.

A professional outsourced AP automation company takes account of the proofreading stage of the AP cycle, and they will have build that part of the process into their workflow.

one-size

One Size Does Not Fit All

No two businesses are run the same way. There will be differences in approval process, payment terms, budget schedules… the list goes on. An AP automation software solution is essentially a cookie-cutter application that you are forced to shoe-horn your processes into.

With a professional outsourced AP Automation company, your specific needs and processes are taken into account. An organization like Octacom is set up to handle every step of the AP automation cycle, or only a few of the steps if that’s what your company needs. Instead of assuming a one-size-fits-all business model, an outsourced AP automation company is inherently flexible, and can be customized to work with you in the best way possible.

Outsourcing AP automation is a great option, especially if you find a company that can handle your AP requirements, and that can work with you to customize their services based on your specific needs. Outsourcing means that you can take all the menial tasks of the AP cycle out of the equation.

Talk to Octacom. We can help.





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