3 Signs Your Organization Is Ready for AP Automation
Companies invest in optical character recognition (OCR) software for their accounts payable because they think it’s the most economical solution, or because they think it will help them streamline their invoicing process. Unfortunately, neither of those is true. There are many hidden costs when it comes to OCR, starting with the software itself and the hardware necessary to operate it. You also need a team to train it, maintain it and, eventually, update it. Plus, OCR software is never as accurate as you hope it will be. The quality of extractions is only as good as the quality of the scanned or source documents they come from. In the end, your team will still have to inspect the documents for quality and fix any errors, in addition to coding the invoices.
It’s for these reasons—and others—that AP automation is gaining ground as the alternative to investing in OCR software. AP automation combines robotic process automation (RPA) with OCR, leveraging an innovative rules engine to improve efficiency and quality with every invoice they process. But before you sign on the dotted line with anyone, it’s important to stop and assess your organization’s readiness. Having a solid foundation in place—like Workday Financial Management—is important, but that’s not all you need.
If your organization can answer yes to the questions below, you may be ready for AP automation.
Are You Culturally Ready to Innovate?
Embracing new technology is exciting, but it also forces you to change your mindset. When you eliminate manual data entry and automate accounts payable, you have to step back and let the technology do what it was made to do. That’s easier for some people than for others. But it’s even easier when your service partner can promise an accuracy rate of 98 percent. With technology performing the same work with a higher degree of accuracy, your AP team can focus their attention on reviewing the exceptions rather than the manual processes necessary to complete it in the first place. With this in mind, there’s no doubt that some of your business processes will have to change. For example, you may need to ask your supplier to include a PO number on every invoice to make sure your new process works smoothly. There may be other best practices to be aware of as well, and the right service partner will have a deep understanding of these leading practices to make the transition as smooth as possible.
Do You Have a Plan for Redeploying Your People?
Because AP automation leverages not just OCR but also RPA, the results aren’t just more accurate, the entire process is also more efficient. This means employees have more time to focus on activities that will add value to the organization. Before signing on with an F&A service partner, you need to have a plan for redeploying your people. If everyone on your team is used to processing every invoice, automating AP is going to change that. Do you know how that process will change? Have you developed a clear career path for every employee so that they’re contributing in new, and hopefully, more satisfying ways? And do your employees understand how their jobs will change over the coming weeks, months and years?
Are You Ready for Change Management?
If you’re worried about the change management associated with moving to a new F&A solution, there’s good news: There is less change management with a service partner than there is with a new OCR software. It’s not nonexistent, but it is less, and the right service provider will have change management agents to make the process even smoother. That said, you do have to be prepared, and you have to be willing to drive the process on your end. Part of this, as we’ve already mentioned, is educating your employees. If they think their job is going to be the same as it always has been, you haven’t done enough to prepare them for what’s next. Similarly, you will have to notify your suppliers of the change so they can add any missing information to your future invoices.
Your Path to an Innovative Solution Begins at Home
When you compare the pros and cons of OCR software versus a service partner, there are some very clear reasons for choosing a service partner: faster close cycles, improved accuracy and efficiency, and the opportunity to redeploy your existing employees. But before you make the switch, you need to assess your organization’s preparedness. If your organization can say yes to these questions, the right service partner can help you move forward and embrace this innovative solution.