With AP Automation is Industry Knowledge Important? 3 Things

It is one of the things I ask when evaluating software… do you know my industry? That’s when the software provider say, “So, what is Accounts Payable Automation anyway?”

Important?

People, generally, believe their Accounts Payable process is unique. If you look at it from a high level, there are only so many ways to open, route, approve and enter invoices into an accounting system. The unique understanding they have tends to come from their internal pain as well as the pain they feel from their vendors. I get those responses a lot where the people evaluating AP Automation say, “There is no way your other clients have the inattention to detail like our users…” or ” Our vendors are so unorganized, there is no way we can automate with them.” Last but not least, “our process has so many twist and turns that I can’t possibly see how Automation would work for us.” With these messages, I can see where someone would gravitate towards a service provider that has knowledge in their industry, but it’s not the most important factor. Consider these three things.

Thing 1 – Problems:

There are some problems in AP that are universal and have to do with the paper and not the company. Problems like, lost invoices, slow process, no visibility to the process, and lack of defined approvals (just to name a few). There are also process problems like spending too much time on certain tasks like filing or data entry as well as skilled employees doing unskilled things like entering consumption information into spreadsheets. My advice when looking for an Accounts Payable Automation service provider is to concentrate on the things I listed first. Find the service provider that solves the problems paper creates… and find the one that does it the best.

Thing 2 – Experience (Period)

If you are looking for experience, industry knowledge should rank belong years. What I mean by that is it is more important (in this day and time) to have more years as an automator than industry knowledge. I wrote “in this day and time” because I wanted to make a point about AP Automation software and service as being early in its development. What I mean by that is AP Automation is still a new idea, and as time goes by there will be more experienced users, leaders and companies. (However) At the moment a company that has 2 years of experience with industry knowledge versus a company with 10 years… the company with 10 years should be more valuable to you than industry knowledge.

Thing 3 – Now!

When it comes down to it and you have two or three evenly matched AP Automation service providers and one has experience in your industry, that’s a plus…. I would recommend choosing that provider.

Want to know more? 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

4 Things that will help you know if your current process is ready for #APAutomation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people that startedAvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information.

With AP Automation, Is Cost The Most Important Factor? – 1 Sad Story.

I think I would turn off an entire group of readers if I wrote that cost wasn’t important. Cost is the way we establish value for things. Cost helps up benchmark and prioritize projects within the business world. Cost is very important, but today I am going to use a real life example to help answer the question, is cost the most important thing?

Once upon a time…

I was working with a smaller size company a few years ago. When the sales representative initially engaged me to help explain AP Automation, I was very happy to find on the other line of the phone a company that was very serious about automation. As you can imagine, the majority of conversations I have are with people who are sorting out if Accounts Payable Automation is right for them or not. Don’t get me wrong, I like those conversations too, but it’s just nice to interact with someone who knows the value, or who I thought knew the value (insert duh-duh-duh music here). A few minutes into the conversation, the prospective client halted the product and service discovery and jump directly to price negotiation. I bowed out and let the rep take over. Then the prospective client started explaining, almost bragging, how they always get a discount in every deal they do. They took pride is getting the best price… better than anyone. I could tell the sales rep will settling in for a continuous ride. After weeks, almost six weeks of pricing negotiations, the client and company agreed to financial terms. The client was happy and the sales rep was battered and bruised.

The rest of the story…

(I loved Paul Harvey) I followed up with the rep on this client to see how the implementation was going, and the rep told me something that, well, shocked me. He said that the implementation had stalled, which is something that never happens with this company and the client was trying to get out of the agreement. Turns out that once the client got into implementation they had no idea what they had purchased (at a good rate) and they had no real goals on what success looked like. Although the rep didn’t, I blamed myself a lot of that. Looking back I should not have let the company go into pricing negotiation so quickly without understanding the values or at least having some back of the envelope goals to guide them. It was a disaster all they way around.

Lessons?

The rep was trained that when a prospective clients wants to buy… sell it to them. That’s pretty easy to understand, and quite natural. However, as a consumer you have to protect yourself and not only know what you are buying but know the impact that it will have on your organization. Buyer beware is something I was taught at a very early age, and it’s still good advice. So is cost the most important thing… no, the offering and the impact is… then cost.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people who started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information

With Workflow Should I Eliminate Steps? #APAutomation

When I think of eliminating steps I always think of George Costanza and the step skipper. Enjoy:

There Is A Thought

When Automating Accounts Payable there is a thought that you need to create as few approval processes (workflows) and steps as possible. This is a good idea because it comes from the notion that automation should be efficient as possible. It’s a good thought, and trying to become as efficient as possible is a great because after all one of the great benefits of automation is efficiency.

Efficiency and Order

When looking at eliminating steps in an approval process, efficiency shouldn’t be the first consideration. The first consideration should be who needs to approve the invoice. I put an emphasis on “approve”. I really hate to write this, but the point behind an approval process is to approve invoices. The word approve, however, is where people struggle. When you automate your AP process before you ever choose a service provider you need to have a very good definition of “approve”. The one I coach people on is that approvals are only those actions that holds some sort of purpose in the invoice getting into the accounting system for payment. Some of these actions are:

      • Sign off that the work has been done
      • The goods have been delivered
      • Check against budget
      • PO match if not automated
      • Conditional situations (job cost, capitalized expenses…)
      • Coding assignment or validation

Paper Dysfunction

You may think that I have just given you some obvious advice, but when automating AP you need to take out those things that are associated to “Paper Dysfunction”. Paper dysfunction are those steps that are created because of paper. Paper unlike automation needs additional steps for controls, checks and balances. Other steps that are somewhat dysfunctional are people inserting themselves in the process to either get or see certain information on the invoice. I would see this a lot with utility invoices that needed consumption data analyzed.

Good News

With Accounts Payable Automation, your software will be your controls, checks and balances, that’s one of the great benefits of automation. Also, the person who needs to see or gather the information, can get a report of that information or the invoice, therefore there is no need for them to be in the approval process. The rule should be, only approves are in the approval process, everyone else is accommodated by a report.

Skipping Steps?

Don’t be a step skipper like George said, but eliminate the steps that are needed for paper because you don’t need them for automation.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people who started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information

The Outcome and Impact of #APAutomation

I tell people who are new to Accounts Payable Automation, whether they are a users, evaluator or salesperson the same thing. I tell them the problem with AP Automation is people don’t know what it is, how it works or the impact that it will have on their organization. Then a pause for a minute and say, “other than that they are fine with automation” and a pause again to see if they laugh.

Need to Define

I have written many times in these articles that I wrote The 8 Pitfalls of Accounts Payable Automation to help define the automation world. I have also written many times that the book didn’t meet that goal, and became more of a best practice book (which is great!).The second book I wrote, The Argument to Automate – How Innovation Can INSPIRE Not Fire was intended to help people develop facts on use to answer the question, “should I (customer) automate AP”. So far that book has also missed it mark (not by much) and has become more of a tool to help define AP Automation (oh boy).

The Definition:

In both books I define Accounts Payable Automation with words… “the independent movement of liabilities through a predefined approval process” (p.18 The 8 Pitfalls). However, what I have found is a definition needed to be more “action” oriented. So my wordy definition changed to, Accounts Payable Automation is only as good as the people time and effort that it frees up.”

What Next?

Once I changed my definition from wordy to action(y), people had the opportunity to quickly understand and (better) were able to transfer that understanding to others within their company. As time has gone by, I have learned another very useful aspect about the action defining; it created a really big question that needed to be answered, and that is if automation is only as people as the people, time and effort that it frees up, then (1) who are those people, (2) what is that time and (3) how much effort?

High Level:

This is really the key to finding out if AP Automation is something that would work for your organization. The book (Argument to Automate) gives you a step by step process on finding people, time and effort, but the important question to ask yourself before you go through the steps is: Do you have any need for more time or to better use your people? If you answer yes to either one of those questions (or better both) then you have at a high level found out that Accounts Payable Automation is something you need.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people who started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information

9 Days and Paper Free in AP – 2 Things

I am going to call that my “broken english” title. I saw a 60 Minutes report about an old guy getting a bride from Russia. When she arrived in the US, she only knew a few words of english. To help, the creepy old guy who just got his internet ordered bride started talking to her in broken english… I don’t know why he did that.

9 Days Huh – Really?

That’s right nine-day. The company that did this, I had the privilege of doing the consulting on the deal. They were highly motivated and had a deadline set to automate their Accounts Payable process in two weeks. They had more than two weeks, but had other pressing things to do so they waited until the last-minute…. I guess that’s what made them “highly motivated”.

The Key – Those 2 Things

Moving the codes, setting up the technology and configuring the approval process wasn’t a problem. Like I wrote… they were highly motivated… It was the vendors that they were worried about. The secret? Well it wasn’t as much of a secret as you might think. Fortunately the service provider they choose gave the vendors plenty of options to send in invoices. That’s not one of the two things… here they are:

Thing 1 (not like the book) was not requiring the vendor to choose one method of sending or entering invoices over the other. It was the prerogative of the vendor the send the invoice in any method they could and if paper was their choice, there was a processing center that allow the client to not do any scanning. There was a bonus to this… where the vendor didn’t have to add or change anything on their invoice. The invoices the vendor naturally sent was enough to work with the system.

Thing 2 (still not like the book) was, there was no charge for the vendor to use the Accounts Payable Automation system. This is a big one. When you get into bed with a service provider that convinces you to charge the vendor to use their automated system, it put you directly in the position of being the “sales person” to the vendor. You have to convince the vendor to use and pay for part of the service. That is a difficult spot for any IT, Accounting or Finance person. I am not writing that IT, Accounting and Finance can’t sell. The point is, during an AP Automation implementation, there is a lot better things you can do with your time.

The Outcome (other than 9 days)

The outcome on the two things is a fast and efficient change on the vendor, and in my experience is one of the keys to a fast implementation process. I have found that the more you burden the vendor to change the longer your process to go from paper to automated.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

About The Author:

Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and travels around the country speaking on on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people that started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information.

The World Is Changing So Back To The Basics – e-Invoicing 101

I don’t really like to start a article off with “101”. I really hope that it doesn’t turn anyone away, but I felt that it was time to go back to the basics.

E-Invoicing

E-Invoicing is one of those terms that people throw around a lot as a “catch-all”. It can be used to explain the software that receives invoices, as well as the invoice itself. It also describes an industry and the companies who provider software to get rid of the paper. So, it’s easy to understand that where confusion can come about when referring to e-Invoicing.

1st – What Is It?

E-Invoicing or an e-Invoice in its purest form is referring to what was previously a paper invoice is now an electronic invoice. I don’t think I just broke great literary ground with that last statement, but what comes next is where the confusions start.

What Is It Really?

The term “electronic” is where the problems seem to start. There is no real standard for electronic, so it greatly depends on what your service provide, that’s the company that provider your company with accounts payable automation software, defines as electronic. Here are few examples.

  • EDI – Electronic Data Interchange. This is a very old form of electronic invoices that is expensive to set up and expensive to maintain. However, you will see this form in a lot of manufacturing companies. You have to make sure your service provider can send and receive EDI information.
  • Electronic Formats – This is the most common form of electronic invoice, and the service provider you pick will need to be able to receive and convert these formats into an invoice. The most common version of the electronic formats are XML, CSV and TXT. Your service provider may have a preferred format as well as a preferred structure which is commonly known as a schema… you should ask if they have a schema.
  • PDF – Portable Document Format. As the name implies a PDF is an image and not text. This is the most commonly misused form of an electronic document. You really have to know your service providers capabilities when it comes to PDFs. Some providers will require you to print the PDF upon receipt (this goes for other images too, like TIFF, GIF and JPEG) and scan it into the system which is not an electronic invoice at all.

I am sure you have heard the old saying that knowing is half the battle. Well, know what an electronic invoice is and isn’t is more than half the battle, and knowing can also save you a lot of time, effort and destroyed dreams.

Want to know more? 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

How about a children’s book? The Princess and the Paper – click here to buy

 

9 Days and Paper Free in AP – 2 Things

I am going to call that my “broken english” title. I saw a 60 Minutes report about an old guy getting a bride from Russia. When she arrived in the US, she only knew a few words of english. To help, the creepy old guy who just got his internet ordered bride started talking to her in broken english… I don’t know why he did that.

9 Days Huh – Really?

That’s right nine-day. The company that did this, I had the privilege of doing the consulting on the deal. They were highly motivated and had a deadline set to automate their Accounts Payable process in two weeks. They had more than two weeks, but had other pressing things to do so they waited until the last-minute…. I guess that’s what made them “highly motivated”.

The Key – Those 2 Things

Moving the codes, setting up the technology and configuring the approval process wasn’t a problem. Like I wrote… they were highly motivated… It was the vendors that they were worried about. The secret? Well it wasn’t as much of a secret as you might think. Fortunately the service provider they choose gave the vendors plenty of options to send in invoices. That’s not one of the two things… here they are:

Thing 1 (not like the book) was not requiring the vendor to choose one method of sending or entering invoices over the other. It was the prerogative of the vendor the send the invoice in any method they could and if paper was their choice, there was a processing center that allow the client to not do any scanning. There was a bonus to this… where the vendor didn’t have to add or change anything on their invoice. The invoices the vendor naturally sent was enough to work with the system.

Thing 2 (still not like the book) was, there was no charge for the vendor to use the Accounts Payable Automation system. This is a big one. When you get into bed with a service provider that convinces you to charge the vendor to use their automated system, it put you directly in the position of being the “sales person” to the vendor. You have to convince the vendor to use and pay for part of the service. That is a difficult spot for any IT, Accounting or Finance person. I am not writing that IT, Accounting and Finance can’t sell. The point is, during an AP Automation implementation, there is a lot better things you can do with your time.

The Outcome (other than 9 days)

The outcome on the two things is a fast and efficient change on the vendor, and in my experience is one of the keys to a fast implementation process. I have found that the more you burden the vendor to change the longer your process to go from paper to automated.

Want to know more? 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

AP Automation Is Only Good If… 3 Things

I have made a lot of progress in the last few months around the definition of Accounts Payable Automation. Some of you may know that’s the reason I wrote The 8 Pitfalls was to help people define AP Automation. Others of you may know that I didn’t reach my goal when writing that book. Good news is, the book was a success for a different reason, however I still chased after a definition to help people.

Action

Turns out that one of the reasons my definition of AP Automation in The 8 Pitfalls didn’t work was it wasn’t that useful. Now, it takes a lot for an author to admit something wasn’t useful. I freely admit it because I am looking for what works, not for what sounds good or what I think is good. I really want something that is useful (I hope you can appreciate that).

Got It!

At the end of many articles and speaking engagements, I think I am on to something. Well, I know I am on to something because people are telling me that it’s working and the new definition is useful and easy to understand. The new definition is rooted in action, explaining the impact of AP Automation. That’s not the best thing, however, the best thing is the new definition is something that is easily understood and can (just as easy) be explained to others when asked. The new definition is, “Account Payable Automation is only as good as the people, time and effort it frees up”.

Thing 1 – People

I talk with a lot of people that don’t want to have anything to do with AP Automation because of it perception that automation’s key benefit is headcount reduction. For some companies, especially big companies this is a true fact. However, for most companies getting rid of their valuable employees just doesn’t make any since. What does work, however, are those people that are freed up by automation can better use their skills in more important places in the business.

Thing 2 – Time

Time is the business world’s unofficial second currency. Just like thing one, this thing allows an organization to more strategically use time. I had a friend who was talking with a woman that firmly believed that if her company bought automation then she would be out of work. He asked her, when she went to school for accounting did she take a class on data entry, filing or finding lost paper? She said no, and I think he made his point very well.

Thing 3 – Effort

Ask yourself a question… as a leader in your company, where do you want your people’s effort, on meaningless task or meaningful task? That answer is easy, but in most businesses in the US the proof is in the day in and day out meaningless task that accounting professionals do.

Time To Define

I wish I could claim that I made this wonderful definition up, but I took it from other industries and departments that are automated. If you look at something like the auto industry, years ago they replaced people with robotics and over time the people in the industry have become more technically skilled, and it’s better for the worker and the employer.

Want to know more? Buy My Books!

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

The 8 Pitfalls of Accounts Payable Automation – click here to buy

4 Things that will help you know if your current process is ready for AP Automation

I consider myself a person that does a lot of preparing. To give you an example my family and I moved about 8 months ago and I had a detailed project plan with an attached Spreadsheet that nobody but me paid attention to. In the end we moved but I think the rest of the family would have been better off if we would have fallen the plan.

The Key

I think the key to good planning is preparation. The better prepared you are the better the plan. Being prepared is one of the reasons I wrote The 8 Pitfalls of Accounts Payable Automation. Generally an automation journey starts with an internet search. The search present 3 or 4 service providers with great websites, which starts you on a path that leads to demos, analysis, more demos, and no clear decision. In The 8 Pitfalls I recommend that you do some internal soul search before you every pick up a clicker and start an internet search.

4 Things

Thing 1 to help you know that your current process is ready for AP Automation is to ask yourself and team, and then ultimately analyze the last time your Accounts Payable process was updated. It is a very good practice whether you automate or not to review your process to make sure it is current. If you answer this questions between 3 years and never then you aren’t ready to automate.

Thing 2 to help you know that your current process is ready for AP Automation is to create a process map of all invoice activities. Some of you are lucky (you probably didn’t think about that when you were putting it together) you were mandated to map the process. Larger or public companies are required to create written approval rules… that’s a process map. For those of you that don’t have this mandated, you will need to write down each step of each process to have a full view of where invoices are going, who is approving and what the exception process is during the approval process.

Thing 3 to help you know that your current process is ready for AP Automation is to establish a cost for the process. Regardless of how many invoices and the dollar amount on those invoices. your process cost your organization a certain amount of money. Traditionally I refer to this as cost per invoice (CPI). One of the key indicators that proves the impact of automation is cost reduction. If you don’t know your current cost you won’t know if it can be reduced.

Thing 4 to help you know that your current process is ready for AP Automation is after you have done your research, cost and map to take a very critical look at every process and ask each step what its purpose. I have a belief that is walk a step in a process back to it origin you will find out why it was created and who it servers. If that purpose doesn’t match with what you need to accomplish then you have to put a big red “X” on that step.

Want to know more? 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