Accounts Payable is one of the most challenging aspects of managing a business that has many vendors. It is important to make sure you have dealt with any overdue payments so they don’t have a damaging effect on your business. Otherwise, there is a high risk for late payments, which can result in penalties and fines for your company.
That is why there are tremendous benefits to using a complete accounts payable automation platform: it can improve efficiency, accuracy and make human errors a thing of the past. Automation reduces the need for humans to take care of tedious and time-consuming tasks. This not only saves a lot of time for employees but also helps to increase productivity.
In this interview article, we had the pleasure of speaking with Eyal Rosenberg, Co-Founder & CEO of Nipendo, one of the leading Fintech companies that offers a Cloud-based hyperautomation platform for RFx-to-Payment processes, based on RPA (Robotic Process Automation) AI and Deep Learning technologies.
What challenges are associated with manually handling accounts payable?
When large amounts of data are manually processed, there is a high likelihood that processing will be slow and that there will be many typing errors. Fraud is also more likely when humans are heavily involved in the process.
Organizations that don’t have effective automation tools often maintain large AP teams that spend most of their time handling administrative issues – gathering invoices, typing them into the system, manually following up on open items, and the like. They spend a significant amount of time dealing with incorrect invoices – checking them, identifying the precise discrepancies, communicating with suppliers, and resolving the issues. This doesn’t leave much time for more professional tasks and usually results in an abundance of data and payment errors.
Finally, suppliers rely on the AP team for information, flooding them with inquiries about invoice status, payment issues, and the like.
At which point does manual handling of AP become counter-productive and cost-inefficient?
Smaller organizations that have few and often standard suppliers can usually handle processing manually. But when an organization finds itself spending more than half of its time dealing with administrative issues related to gathering and typing invoices, or when they consider hiring additional AP staff, they should consider automating the processes.
What are the benefits of implementing a software platform for the automation of accounts payable processes?
An effective software platform that automates AP processes can save an organization time, effort, and money that’s currently invested in manual processing, minus the processing time, errors, and associated potential fraud.
An effective solution, which does not require an exorbitant investment of funds or implementation time and which effectively addresses the processing challenges, should free up AP personnel to perform more professional tasks and, by doing so, improve process control and the team’s ability to manage exceptions and complicated cases.
Such a platform would shift the responsibility of handling invoices correctly to the suppliers, providing them with simple, step-by-step guidance and ensuring that only correct data is transmitted and consequently that they receive correct payment and on time.
Another advantage to such a solution is improved communications with suppliers – automatically updating them regarding invoice status and payment dates, and the like.
What is the direct and indirect cost associated with implementing a software platform for the automation of AP processes?
The actual dollar cost of implementing an automation platform could vary quite significantly and depends on such factors as the level of automation that it provides, the processes and spend categories it covers, how it addresses complex situations, what percentage of suppliers will ultimately be onboarded to it, etc.
When considering such a solution, organizations also think about the number of resources they’d have to dedicate to the implementation process, how long it will take, and whether they’d need to replace or customize existing resources.
An effective solution should not require the replacement or customization of existing ERP systems or the replacement of existing procurement applications. It should be implemented within a matter of weeks and require minimal dedication of internal personnel to the task. The platform should be as close to “plug-and-play” as possible.
What if the organization has already implemented automation tools around procure-to-pay processes – are they sunk cost?
This might very well be the case with some solutions, but not with Nipendo’s. We do not require our customers to replace existing ERP systems, procurement applications, or AP automation tools. In fact, the Nipendo platform was designed to complement them, to extend their functionality and ultimately to help organizations get a better return on the investment they already made in them.
How can AP automation tools be incorporated into existing ERP infrastructures?
Companies invest significantly in their ERP system, and the last thing they want to do is to replace or have to customize those systems in order to implement AP automation capabilities. Ideally, interfaces would be built between the AP automation tool and the ERP system in order to automate invoice posting in the ERP system; enable the AP automation tool to use the ERP information around orders, goods receipts, price lists, service entry sheets, and the like, in order to perform automatic invoice validations using two, three or four-way matching; and to communicate information from the ERP system to suppliers regarding their invoice and payment status.