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AP Automation for Separate Companies and Multiple ERP Systems

 You might be using an ERP to drive your various financial processes today, but is it offering you everything you want or need? Similarly, when supervising supplier invoices, you are still doing too much manual work and more than you require. A well-designed ERP system incorporates multiple business processes into one, but it won't be adequate to determine your AP issues.

Therefore, ERPs were primarily used by global corporations because they were the only ones who could afford to implement them. But, with the upgrade of cloud-based ERP solutions, this trend has changed. Apps Run the World evaluates that the cloud ERP market size will balloon to $32.1 billion by 2025 globally, with total ERP market values growing to $98 billion. 

ERPs are designed to simplify business processes and record information, but they won't help if you want to turn your AP department into a profit centre. ERPs aren't designed for invoice capture, approval, and matching. When you consider a recent report by Level Research ranked manual routing of invoices for approval and manual data entry as the two biggest challenges within the AP process, it's clear that your ERP will not solve your AP problems.

One of the best ways to enhance efficiency within a large organization is integrating AP automation software into the existing Enterprise Resource Planning system (ERP). By doing this, businesses can handle their finances more accurately and improve overall performance.

There are different AP automation systems in the market, but not all are compatible with ERP platforms. We will answer all of your AP automation questions and examine which software solutions integrate seamlessly with popular ERP platforms for greater efficiency.

 

What is ERP and Why Use it?

What is ERP?

ERP directs to a set of systems that link all of the company's business processes and allows data flow between techniques and operations. It will enable standardizing, streamlining, and integrating processes across HR, finance, distribution, and supply chain. The underlying software utilizes an integrated platform and everyday data purposes. ERP systems offer business intelligence, sales force automation, and marketing automation. Most eCommerce websites are now heavily connected to some form of ERP back-end. An effective ERP execution needs not just the right software but also detailed documentation, buy-in from key stakeholders, communication with vendors, and employee training.

While there is no formal timeframe for an ERP execution, it can take six months and two years. Impacts on the timeline vary by enterprise but can include:

·         Company size.

·         Transfer of data from legacy systems.

·         The complexity of the system being installed.

Unlike many critical decisions that can be diverted away, it's unusual for a company to go through more than one ERP execution.

 

How does AP Automation Integrate with Top ERP Systems? 

When an account payable automation solution is incorporated with an ERP system, it evolves into an add-on to the ERP. Unfortunately, not all AP automation software is compatible with ERP systems. For the two approaches to work together seamlessly, they must be incorporated. This means that the AP automation software is linked to the ERP and can be accessed from within the ERP system.

The integration procedure differs depending on the AP automation software and ERP platforms implicated. The AP automation software is established on a company's server in most cases. Your automation software provider will offer in-depth training and consulting to set your group up for the hit.

Why do businesses need AP Automation?

While automating this process, businesses can minimize cycle times, provide employees more time for intellectually challenging jobs, minimize human errors and improve employee satisfaction. Also, AP processes appear simple, but the rising number of business transactions expands AP teams' complexity and resource requirements. 

Lesser Cycle Times

Delayed payments can risk supplier connections of businesses. Therefore, completing payments on time is essential and keeping cycle times short. AP automation controls these tardy payments and lowers cycle times. According to Ardent Partners, AP automation can reduce the cycle time to 4 days, whereas most companies' manual process takes 17 days. They also demonstrate that this is the main reason why only 4% of companies pay all of their invoices on time.

Extensive Cost Savings

By eradicating manual tasks, AP automation can effectively protect a company. Similarly, it can minimize costs by optimizing vendor portfolios, evading duplicate or inaccurate payments, and benefiting from early payment discounts. They suggest that the payment processing cost per receipt declines from $11 to $5 after automating AP processes. 

Controlling Manual Errors

As human-made invoices are inclined to errors, duplicate or erroneous payments can always happen. AP automation can decrease these errors and allow companies to maintain this process effectively.

Fraud Detection

Manual invoices payable procedures have inferior visibility because businesses primarily utilize these processes in paper documents. It would be more challenging to follow up on AP operations without digitalization, and completing these processes would make it more open to fraudulent actions. AP automation might witness artificial invoices and lower the possibility of internal or supplier fraud to rescue the company.

Employee Satisfaction

No employee wants to spend their work time punching in numbers from a document. Automation allows employees to concentrate on higher value-added duties.

 

The Effectiveness of ERP and AP Automation

Businesses use accounting software such as QuickBooks, Sage, and NetSuite to boost APautomation power. Using configurable workflow rules for acquisition orders and invoices. Also, you can instantly witness where an invoice is in the approval procedure at any presented time and handle critical AP processes from the mobile app.

 

If that wasn't enough to get you asking for more from your current ERP's accounts payable functionalities, allow us to introduce several other significant benefits and features that client constantly yell about:

·         Effortlessly hosted, stored, and managed invoices and PO images for seven years.

·         Gather detailed reports with invoice images for auditors and fast back up critical financial reporting data

·         Configure workflows while segregating users, approvers, and enterprise units across numerous departments in various geographic locations

·         Offer online, remote, read-only access to an auditor so that you have complete control over what sections on invoices they can notice.

·         Deliver a single place for all legal commodities to see vendors spend at the same time

 

How to determine an AP automation solution?

Integration Abilities

AP systems require to be incorporated into a company ERP system like SAP. Comprehending the company's experience with system integration helps estimate the timeline for the integration. 

High Level of Automation

The automation software should improve automation to an adequate level. A good measure of automation is the no-touch processing rate—directing solutions in the market claim - 80% no-touch automation rates.  

User-Friendly Interface

As in any solution, they were retaining a user-friendly interface is essential for companies. Employees can evolve friendly with such software speedy and use them more suitably. AP automation solutions are the same. The UI will be used as transcribers to fix issues in the pulled data and other exceptions.

 

The Conclusive Note

As per authors Howard Smith and Peter Fingar, "Not all process-integration problems are technical and not all about IT. Integrating computer systems is not the same as integrating the business."

Whether there are numerous benefits to using an ERP system, its performance is admittedly risky. However, the risks can be diminished by employing best practices and operating the process well. The zest from this blog should gather some ideas for improving the possibilities of success.

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