There are a lot of positive things that are associated to Accounts Payable Automation. I have witnessed first hand company’s accounting department change for the better and modernize to the point to where the department had become a profit center rather than a pure expense.
Although I am not a huge advocate of making Accounts Payable a profit center (that’s a subject for another time) there are some dangers you should be aware of.
First, if you are a consistent reader you will know that I define AP Automation as only being as good as the time that it frees up. I call the time that is freed up by automation, “New Time“.
There are 8 dangers to look out for when evaluating, implementing and being automated in Accounts Payable.
Danger 1 – Make sure you calculate hard time-saving. Hard time (not like prison) refers to the task (and therefore time) that the automation software or service will free up 100%.
Danger 2 – The service provider has no clue. If your service provider is unable to tell you what task will be freed up 100%, you have a big problem and need to look somewhere else.
Danger 3 – The ROI is on shaky ground. When a return on investment (ROI) is on shaky ground it is generally due to the fact that the ROI is based on both hard and soft time savings. If hard time (not prison) are tasks that are freed up 100%, soft time are tasks that are affected by automation but not completely eliminated (like approving). Make sure when evaluating automation software and services you base your ROI and New Time on hard savings.
Danger 4 – Somebody was surprised. When it comes to time, if you are in the middle of an implementation project and you have a discussion with a team member that their job is changing because of automation you have created a big problem. Make sure you have clear expectation before you embark on automation with all the people being affected.
Danger 5 – What, there was not enough time? During implementation it is a possible danger that the time calculation done in the vetting process was wrong. Now, not every service provider can be 100% accurate, however, if the calculations are constantly off then you have a problem with the service provider.
Danger 6 – More Time? Like the previous danger you can find yourself losing time once you are automated with certain process. They may not show their brokenness until later. That is why I like to advise people who implementing Accounts Payable Automation is an ongoing process not an event.
Danger 7 – Where should I go from here? Along the same lines of a process not an event, always ask yourself (individual and team) where can we improve? Where are we able to add processes, procedures, or technology to continue to free up more time. The danger here is you automate and 2 years later your service provider has improved and grown and you have stayed the same.
Danger 8. Whoops… looks like I didn’t know what I was doing after all. When calculating, implementing and manage time freed up by automation there is always the fear that what you start with is never what you are going to end with. If you use time as the key evaluation point to automation there is a danger the service provider you partner with doesn’t have the same value and is more interested in the technology rather than the impact.
Choose wisely to make sure you and your service provider has the same values. You can read more about this in my book, The Argument to Automation (see the link below).
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