Prospect from manufacturing vertical : “Our invoices are a major pain area and this may be the perfect solution. With COVID, we may not get the budget”.
Prospect from Education vertical: “Oh, We know AP Automation is a major problem but our CFO won’t approve this budget.”
Prospect from Financial Services vertical : “This product is amazing and can help us so many problems. I wish we can demonstrate the ROI to our Business Head”
All the above prospects are from different industries and have talked with us at different timelines.
Every AP manager or IT manager wants to solve Invoice processing problems in organization but has a common refrain– “How to get the budget approved for AP Automation initiative from the boss”.
The common factors to get AP Automation can be categorized as…
Driving Business Transformation
Reducing Operating and Support Costs
1. What are current Invoice Processing Costs in Time and Effort?
AP Managers can start with calculating the cost of manually handling invoices at organization. They can begin with determining some components:
- Costs for Finance and AP Team to process an invoice
- How many invoices does your organization process per month?
- How much time and effort can you save on processing invoices for the AP Team?
- How long does it take to approve one invoice?
- How long does it take to process a payment?
- Time spent by AP Team on managing exceptions (Our experience suggests 20-30% of invoices have exceptions)
- How much time is it taking your organization to process an invoice from start to finish?
- How much are late payments costing you?
2. What are Industry Benchmarks for All Costs Mentioned?
AP Managers can start identifying industry standards and know how organizations in the same or similar industry works and what benchmarks they follow. AP Transformation Manager can understand the benchmarks and set business goals and benchmarks to match the industry standards. The benchmarking exercise in organization is critical to set a quantitative goal to achieve and can align all stakeholders to participate in AP transformation program.
3. Collate All Possible Benefits and Core Requirements
The AP team already uses an existing set of software tools or solutions to meet business requirements. Some queries to ask internally to not disrupt existing processes:
- How much training will the solution need for my users?
- Can I integrate this new solution with an existing set of tools?
- Should the tool be cloud-based or on-premise solution?
- Can I achieve a single source of truth for my Invoice processing needs?
- Can AP solution help set up the invoice validation rules?
Some requirements will be really core to organizational maturity needed in AP solutions. There will be multiple similar requirements that are specific to AP solutions and some requirements catering to your organization.
To answer this query, Aavenir has also prepared a Checklist of Vendor requirements.
To Learn More About
Accounts Payable Automation Software Buyer's Checklist
4.Focus on ROI and Aligning with Stakeholders
So far, we did internal calculation to achieve all possible outcomes from achieving AP Automation goal. As transformation manager, you need to bring urgency to this process.
You can start with setting up urgency in timelines and why the solution is needed now.
- Why should your organization do this now, not later?
Talk about potential losses and missed out benefits of early discounts, standardized payment terms and Invoice frauds. (Now, the losses can be realized and unrealized)
- Why fix a working system?
You can tie-up industry benchmarks with your organization’s current state of AP processing. If there are any underlying gaps, the AP automation can fix those gaps in the current system and the AP team can start utilizing savings.
- Will this solution grow with us?
C-level leaders need to think of a solution in the present and future. They will evaluate AP solutions in their current state and show that AP solutions fit the future roadmap of the organization. The right AP solution will scale and have maturity levels to grow the organization from invoice onboarding to detecting invoice frauds. C-level leaders will need that confidence from you to give the buy-in from organizations.
To provide savings and costs achieved from AP automation, Aavenir has prepared a ROI Calculator.
Calculate Saving for
5. Aligning with Stakeholders and Buy-in
Congratulations for coming this far and collecting all the information !
If the stakeholders have minimum alignment with your research, your business case has low chances of becoming a reality. Getting the buy-in from each stakeholder level is critical. Your stakeholders can be from IT, Finance department, Business approvers and most importantly, your Boss. You would need a champion from each stakeholder team. You can start with ensuring that the entire team understands all the advantages and each team has a stake in the complete process – both research and choosing the right AP solution. Eventually, your goal is to make the stakeholder cheer for your success. So, you need to onboard each of the stakeholders early and make them part of your vision. To summarize, getting the funding is the most critical step in this process. In this step, spell out quantitative and qualitative advantages of the AP solution.
In all, the right combination of internal analysis(numbers), external benchmarks and financial numbers for stakeholders will help you in turning the AP transformation dream into a reality. As an organization evolves and grows, the AP processing needs to scale up, becoming agile and supporting faster decision making. To support this, organizations will need a highly adaptable and robust AP automation solution to transform the AP function internally.