This week I am writing about competition. I am trying to take a unique angle at it by helping you understand a few tangible differences between AP Automation service providers.

Recap

Yesterday I wrote about automation and document management, and today’s topic is seat license and transactional fees. Here is the great news about this article it can help you evaluate price too. The differences between seat licenses and transactional fees always can make pricing very confusing.

Seat License

What I am referring to with seat license is, the service provider charges you a flat rate per user to use their software. It is usually per person or per user the difference can be that people can share logins but only one can be on at the same time. The benefit of a license based pay structure is that you have fixed cost. You know ever month what you are going to send on the service.

Transactional

A transactional payment structure is based on some aspect of the software. This is usually by the invoice. The benefit here is that you only pay for what you use. This is great for smaller companies because they can use the same software as a larger company and pay a much smaller amount.

WARNING!

Both of these pricing structures have their challenges. With the seat license, your natural reaction will be to limit the number of people who can use the software. One of the great things about Accounts Payable Automation is it can enable people to do work for themselves so limiting logins will stop that. Some companies with transactional fees will have hidden escalators, like a certain price for the first five pages and then an additional amount thereafter. Know all of the parameters of each, but the best advice I can give you is to know which one will fit your organization before you start the evaluation process so you can separate the competition.

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