AP Automation and The System of Record


I remember the days of vinyl… I would like to write that I miss those days, but I like digital everything so much better. Today’ article is about “the system of record”.

Competition is Good

I love competition. I can relate every business success I have had from some source of competition, however when it comes to competition in Accounts Payable Automation it can create a lot of problems. The competition I am referring to is the competition between the AP Automation system and accounting system.

Who is the Winner

The competition between systems seems like an innocent enough situations… notice my choice of word, “situation” because that is what people think about when they are faced with competition between system. However, it is not a situation… it is a full on problem.

2 Layers

The problem of system competition has two components or layers. To set the stage, the competition I am writing about is between the accounting system and the AP Automation system. Multiple times I have seen an automation disaster that started with good intentions and ended with two systems trying to electronically enter an AP transaction into the accounting system. Here is an example.

Later this week I am going to be writing about purchase orders and Accounts Payable Automation. This most frequent example of competition is if you employ an AP Automation service provider that will enter an invoice into AP and there is an open purchase order (PO) that when three way matched will enter an invoice into AP. If you look back at that sentence the competition is between the automation system and the PO system. Their end goal is to both put an AP transaction into the accounting system.

Here are a few other places AP Automation and accounting system compete

  • Check Numbers
  • Cash Management
  • Job Cost – Project Accounting
  • Financial Reporting
  • Aging
  • Vendor Management
  • Just to Name a Few

System of Record

My recommendation is to make the accounting system the system of record…. it’s the boss. All financial and cash management should be done in the accounting system, and let the AP Automation system focus on getting rid of the paper speeding up the approval process and enter a translation into the right place of the accounting system to take the most appropriate actions.

You Should Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

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