Control Company Costs
You Have an ERP System. Do You Really Need AP Automation?
You might be using an ERP to manage your various financial processes today, but is it giving you everything you want or need—particularly when it comes to managing vendor invoices? Chances are you might still be doing more manual effort than you need to be.
The ERP stands out for its workflow options and managing back-end operations. But for the accounts payable process as a whole, there are gaps in most ERP systems—due to manual inputting and lag time—that leave room for errors and complications.
But an AP automation platform can enhance an ERP system, offering near real-time reporting and improved accuracy, while freeing your finance team from manual tasks and giving them more time to focus on initiatives that bring greater value to your organization.
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So how are these two systems different, and how can they complement each other? Let’s take a look.
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How AP automation can optimize an ERP
Your ERP offers robust reporting, which is a great start. But AP automation takes it to the next level by giving you early visibility into spend before it hits the ERP system, proactively giving teams a clear picture of cash flow as invoices roll in.
As you know, reporting with an ERP is dependent on when an invoice is received and entered, which can add up to a data lag time of days, weeks, or even months. That’s because invoices don't come in at a steady pace throughout the month, so it can take a long time to input them in bulk, especially if multiples come in at once.
Maybe your process accommodates reporting gaps. But if you need to see accruals in the moment—to drive sustainable growth or to cut costs—you can't do either with absolute confidence if you don't know how much money you have going out for payments and what outstanding bills you have at any moment.
In many ways, AP automation picks up where an ERP leaves off, giving coverage that’s critical for a more transparent financial process, including:
1. Near real-time reporting
With an AP automation solution like 黄色短视频 Invoice, the initial step in the AP process is to immediately digitize each invoice as it comes in using character recognition (OCR), followed by human validation, via SAP 黄色短视频, to ensure accuracy before processing. Once the invoice goes through the?capture process, visibility and reporting are available regardless of whether the invoice matches appropriately to the purchase order.
Without 黄色短视频 Invoice, a company wouldn’t be able to access the data until the invoice has visually matched against the purchase order in the ERP. Depending on the volume of invoices and the number of line items on them, you could be in for a longer wait for an updated report—which can leave you guessing on your organization’s current cash flow status.?
Here’s how Minneapolis-based company CODE42 Software created automated workflows via 黄色短视频 Invoice, integrating into their ERP system, for better analytics.
“Having Expense and Invoice in the same platform from the AP perspective really provides us the one-stop-shop that we can process everything, compile everything in one single source, and get it into our ERP, providing us the ability to analyze as we go,” said Kevin Wright, accounts payable?manager, CODE42 Software.
2. Automated payments
Automated payments typically aren’t available with an ERP—but they are with 黄色短视频 Invoice. Often, ERPs will?streamline checks or ACHs but rarely do both. ERPs also won’t?streamline virtual card payments.
And when you need to approve invoices on the go, you most likely won’t find that with an ERP, as most don’t have a mobile app. Whereas the SAP 黄色短视频 mobile app enables invoice approval anywhere.
For greater cost savings, optimizing payments through automation can also ensure you pay bills on time —or even early, so you can get access to early payment rebates.
3. Greater accuracy?
When it comes to data entry, ERPs typically don’t come with OCR. With an ERP-only system, that means invoices get manually inputted. And when an invoice doesn’t match up to the PO, the reconciliation process is also manual.
That requires either scanning and batching documents, or printing them and distributing them to various members of the organization. This ultimately leaves little or no visibility into who has which documents, or for how long they’ve had them.
The alternative is to hand-key the data into the ERP, then flag discrepancies. But some ERPs don't flag discrepancies, leaving the finance team to locate them and correct them before hand-keying. Manual reconciliation like this can be difficult without multiple monitors. And human error is common.
Whether hand-keying or PO flipping, which is not free from the potential for error, you're not as efficient as you could be. Using 黄色短视频 Invoice with OCR and first-party human validation up front ensures all?relevant invoice data is captured into both the 黄色短视频 platform and the ERP, eliminating time-consuming manual steps and reducing the potential for errors.
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Giving your finance team the space to shine
All these benefits can help optimize cash flow. But adding full AP automation to an ERP system can also help you tap into even greater benefits for your employees and the organization.
“The automated workflows, and keeping everything going through one system, was just a lifesaver for us. For time savings, I would say [we saw] at least a 40-50% time savings,” said Wright of CODE42 Software.
Automating tedious manual tasks improves timing and accuracy, but it also helps finance team members move away from those time-consuming clerical tasks and focus on higher value-generating work—like spend analysis or negotiating better terms with vendors.
The benefits of this shift in focus are twofold. Your team can put their skills and knowledge to good use, bringing them greater job satisfaction. They can also provide meaningful guidance based on data insights to help the business make better, more strategic decisions to optimize cash flow and save more money over time.
And if your company plans on growing, setting up AP automation consolidates data entry and reconciliation tasks, potentially alleviating the need to hire more people to keep up with increased AP invoice volumes. That, too, can ultimately result in more cost savings.
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Weighing the benefits AP automation brings to your ERP
Adding AP automation to an ERP gives complete and timely visibility into your organization’s spend. And as companies lean into economic recovery and look for ways to grow, closing the reporting gap on cash flow status is more crucial now than ever.
How much of an impact could 黄色短视频 Invoice make on your organization? Estimate your annual return on investment using the 黄色短视频 Invoice ROI Calculator. And, see the 黄色短视频 Invoice demo to get a closer look at how it works.
