It costs $12 to cut a check from receipt of invoices, approvals, printing and clearing the checking account! Take your AP department spend and divide by the number of checks you send. It might be startling! AP automation, the process of automating AP transactions, is a hot topic for any organization trying to reduce their back office spend.
Are you just looking to fix AP processing or is your project bigger? Do you need to image multiple departments, even route HR, Manufacturing AND AP? Is this just for the back office, or does the entire organization need imaging. Perhaps back office is the driver, but you want to keep your options open for a wider need.
If AP is enough, you have two choices-outsource the whole enchilada or automate in house procedures. Bill.com, Anybill and Concur, are examples of systems that will outsource your AP function. They house your vendor information, checking account information and GL structure. Documents go to these systems, get routed for approval then paid as approved. You pay a monthly fee plus a per check/EFT fee. Your checking account is drafted in advance of the checks clearing so you lose any float. 1099 processing needs to be managed and vendor setup is still your job, but if you like the outsourced model, you might like these systems.
Lets say you want to benefits of AP automation, but you still want to own and manage the process. A variety of ISVs can provide web-based systems that integrate with your accounting system. They read your AP system for vendors and GL structure, manage the web-based routing and approvals, keep an image of documents and even create the entry in your accounting system. Payments can be made by check or EFT. The net savings is about $9.65 per voucher paid!!! Plus, you get a file of images of AP documents, so originals can be shredded instead of filed and stored physically. Its a big win!! ISVs that we like include PN3 and Imagelink.
Imaging for the Organization
If you draw the box larger, you might see that many departments handle documents and route them. AP is only one area that needs imaging and routing. In that case, you might consider an imaging system with a routing engine. The best ones have pre-built solutions for AP, a quick win for low hanging fruit.
The routing engine is designed for custom routing and while they might require some technical skill to set up the initial work flow, management of the system is easy and efficient in the best ones. HR often needs an onboarding system. Manufacturing needs a work flow for production, especially for custom products. Contracts are unique for every organization. Spending a little bit more for a comprehensive solution, gives the ability to grow the system as other departments see the value. AP wins right away! ISV in this category include ImageTag and Altec.
There are many ways to solve this need and the payoff is significant!! If you haven’t looked at AP automation yet, what’s holding you back?
Let me know your experience and what you like and use.
Bill Aiton, President