The Top Blog of 2014 – 6 Trends of the Accounts Payable Automation Universe

My wife gets a kick out of me trying on hats, you know the “one size fits all” variety. The reason she thinks it’s funny is because they never fit my head. It makes so much sense to her that my head is always way too big for the one size fits all hats. In the Accounts Payable Automation world there is a delicate line between software, service, experience and execution. Because of that here are six trend that make it difficult for one size to fit all.

Trend 1 – Accounting System Enter

More and more accounting systems and ERP systems are adding automation functionality. This trend suggests that in the future they may be a one stop shop, but at the moment (next 3 years) the capture process seem to have eluded these systems.

Trend 2 – Document Management Helps

If you read my articles, you know that I write about document management and automation as being two different things They have similarities but the goals for each are different. This trend gets close, but until document management system focus on process improvement and time savings they will be far away from AP Automation.

Trend 3 – Watch out for the Government

This is the trend that I am most interested in. I believe that the United States is two to four federal laws away from mass, mid-market, Accounts Payable Automation adoption. There are already examples in the larger market with Sarbanes-Oxley rules, but this trend will highly encourage mid-market companies to automate. Be warned, however, it won’t be as overt as the government passing a law to automate AP, but laws will pass where automation will make compliance to the law easy.

Trend 4 – Dipping Your Toe In

I am seeing more and more of this where some aspect of the Accounts Payable system is being automated. Like receiving emailed invoices, backend scanning, or using SharePoint for storing invoices. There are even some that have created electronic approvals using Outlook. All of this is people using technology to improve a paper process. The trend here is; as you automate or electronicfy (I like making up words) aspect of the process you will want more, which will lead to a fully automated AP process.

Trend 5 – Education is Still King

This is a current trend that is not only gaining but seems to be the current state of the AP Automation union. Thankfully, because I run AP Automation News and write books, people’s thirst for information about automation is growing. Two years ago, as an example, I did 11 in person speaking events, 24 webinars and 1 article a month. As of 2014, I am booked for 29 live events and webinars up to June and I post 40 articles of different types each month. The traffic to my site has gone up 6000% and people still want more.

Trend 6 – Times Are A Changin?

I write a lot about change. I am not afraid to use the old saying, “the only constant is change”. I believe that’s true. The trend here is people are getting better about changing. Because of a recovering economy and the tech boom hangover, leaders in companies don’t just jump into the latest fad or throw buckets of money at projects anymore, so change is slower.

One Size?

Sure it would be good to have one neck to choke from a technical perspective, but with so many moving parts, one size fits all in AP Automation is too far away to predict.

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

# 2 Top Blog of The Year – 15 Terrible Pieces of AP Automation Advice You Should Ignore

Being the parent of four (with a teenager) I was somewhat hesitant to write an article about ignoring anything, however as an Accounts Payable Automator there are some things you shouldn’t listen to.

15 Pieces

  1. Hurry, time is running out. Don’t get hurried to make a decision… make a good one. Also, don’t delay when the decision is clear.
  2. Workflow and capture are separate. Later I am going to write about “best of breed”; the advice here is to find features that are integrated well.
  3. When purchasing, concentrate on features. The more I help people Automate AP the more the software that does the work becomes less and less important (sorry tech friends).
  4. Find a service provider that works in your industry. I know there is a comfort level in working with someone who knows your industry, but solving problems are more important than knowing the jargon.
  5. Keep everything in the accounting system. There is value in having one neck to ring, but accounting systems do accounting well, AP Automation is a process change and needs to be treated that way.
  6. Try to use one service provider. There is a case to be made for best of breed. My recommendation in best in breed, however, is to make sure everything integration, so you don’t have to manage multiple systems and have everything freed into the accounting system…. have it be the boss.
  7. Our company is low tech therefore we need something low tech. You need to find something that solves problems and frees up time, don’t listen to people who try to convince you to focus on the software.
  8. Cost is the most important factor. I have worked with people who concentrated so much on beating the service provider up on price that in the end they didn’t get what they need. Sometimes it pays to invest a little more.
  9. If you play hardball your vendors will comply. The vendor that I am writing about here are the ones sending in invoices. Some people will give you advice that they will do whatever you tell them if they want to get paid. To some extent that is true, but vendors are a great source of information about automation and you should include them in on your decision (not all of them) to automate AP.
  10. All you need to do is digitize your current process. This is advice that service providers with limited skill will give you because keeping your same process is the least amount of change. Don’t be afraid of change. Change is the catalyst for improvement.
  11. Go all in! Just ripping the band-aid off is bad advice. Create your plan to automate, then do a lot of testing and once you are ready for people to use it, better advice is to phase in AP Automation and “field test” your system.
  12. Get the fanciest scanner you can buy. This is good advice if you are scanning, however find a service provider that will do the scanning. You will find that they can scan faster and cheaper than you, and you get a bonus of losing the paper.
  13. Eliminate as many steps as possible. If you are a frequent reader I do preach that freed up time is the reason to automate, so it would seem that the more steps the better. That’s not 100% true…. free up as many steps as you can that aren’t critical business decision. I frequently get people who want to automate the coding. For the most part that can work, but have the automation software use a default and have your people verify the default… that keeps you in control of the decision.
  14. Everything will be just fine.. don’t worry. I think you should worry some. Changing Accounts Payable isn’t a task that should be taken lightly. If done correctly you should have less stress. The best advice here is to make sure you are partnering with a company (or companies) that know what they are doing.
  15. Whatever you do don’t listen to Chris Elmore (that’s me)! I promise I know what I am talking about… thanks for listening and reading!

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

#3 Top Blog Of The Year – 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 Top Blog Of The Year – What does 1500 invoices per month mean to AP Automation

Tuesday I was speaking to a group in Boston… they asked me to talked fast because there was a snow storm on the way. You know I was very conflicted because I thought that people in Boston were used to the snow… even liked it. Then it was explained to me that the panic was due to the fact that traffic was going to be terrible, so they were more nervous of being in traffic than snow… I can understand that.

As Usual

When I talked with groups I want to make sure that they understand the purpose of Accounts Payable Automation… Time. I don’t try to be too dramatic, but I want them to know that automation is only as good as the time that is freed up. I also want them to know that an automation service provider should be judged on the amount of time they are able to free up, and that service provider should be held accountable for delivering on the amount of time they can free up.

So?

Once you buy into the idea that automaton is only as good as the time it frees up, there are two types of time, I won’t go into them too much, but you can read an article I wrote about them by clicking this link To give you the short version, there are soft dollar time savings and hard dollar time savings. The difference between the two are soft time savings is that time that Accounts Payable Automation impacts but does not completely eliminate. The example I always use is coding and approving. With paper you code and approve and when you are automated you will code and approve. Hard time savings, on the other hand, are those tasks that automation eliminates 100%. .

The 1500

Using the idea of hard time savings, there is a very interesting benchmark within your process that you are able to use, and it is one of the biggest pools of labor that can be eliminated from manual work which is entering invoices into the accounting system. Most AP Automation service providers are able to transfer invoices from their system to your accounting system without you doing anything. Note that if the service provider is unable to do this, you may want to look somewhere else. (Back to the 1500). I have found that, and this is based on thousands of AP cost per invoice studies, that for every 1500 invoices that your process every month it take 1 full-time, 40 hour a week person to do data entry into the accounting system.

Think of This

This number can work multiple ways. Frist it can tell you how many invoices per month you process, which is a fact that seems to go without notice for most accounting departments. Second, if you are doing more or less than the 1500 you can use the number as a benchmark against other companies to judge how efficient your AP group is. Third it can give you a quick measurement on the impact of AP Automation. What I mean by that is if you process 3000 invoices a month an immediate impact with automation is you will have an additional 80 per week that you can use for other tasks. Be warned those 80 hours may be spread out over 6 people, but at least you can know the impact.

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

#5 Top Blog Of The Year – Bad Habits When Automating AP – 6 of Them

Habits are an interesting thing. You have probably heard the saying you can’t teach an old dog new tricks. Well, good things dogs don’t run accounts payable processes. If you are like me, it seem like every time you turn around something is changing. Don’t get me wrong, I think change is good, so where do habits come in?

Habits:

The dictionary says habits are,an acquired behavior pattern regularly followed until it has become almost involuntaryI think the two key words that affect AP Automation in the definition is “behavior” and “involuntary”: Both of those words denote that the person may or may not know they are doing the habit, and when that is the situation it makes it very difficult for them to change. On occasions I have known that people get core principles confused with habits. Those are referred to as “bad” and there are six of them that you need to be aware of with Accounts Payable Automation.

Habit 1 – Minimize Change – This is a common habit that comes from years and years of managing money where change is a bad thing because change could potentially open up risk. Accounting and finance people are naturally good risk managers, but a successful outcome of AP Automation is change. Making a good process better takes change.

Habit 2 – Let IT Drive – IT meaning information technology. Depending on your service provider IT may play an important role, or they may play no role at all. If they are in the driver’s seat that will insure your company will get a good piece of software. Getting a good piece of software is only half the objects, changing the process for the better is the other half.

Habit 3 – Control! – Paper needed control, Accounts Payable Automation doesn’t, it has reporting (enough said).

Habit 4 – Tip Toe – When you enter into automation there may be a bad habit of starting slow and changing piece by piece over time. Although that will see like a nice safe plan it puts your organization into a position to managing two processes. One, automated and the other paper, so in essence you have doubled your people’s work… not good.

Habit 5 – Stay Close To Home – This bad habit is directly associated to doing what your accounting or ERP system recommends. Although this is a good place to start, you should venture outside to make sure you have the best for your company.

Habit 6 – That’s The Way We Are – The worst habit with AP Automation is to not be open to new practices because you have never done them before. Sure, not everything new is good, but not every you have done in the past has worked. Right?

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