Decoding the dilemma: automation vs standardization in Accounts Payable

Introduction

When companies decide to modernize their invoice processing using automation technologies, one of the most important questions that arise is the following: “Should we automate our AP processes as they are, or should we try to standardize first?”  

The solution to this dilemma depends on many factors, such as company size, complexity, current degree of standardization and business plans. To help large enterprises in their journey towards P2P efficiency, we shall reflect on this wide-ranging topic below.

What are enterprises trying to achieve by standardizing AP processes?

As companies grow or try to be more competitive, they explore different ways to speed up and optimize processes. The core business function of Accounts Payable (AP) is often ripe for optimization, especially if it still relies on manual processes. 

When finance leaders such as P2P process owners or AP managers look for ways to optimize, standardization and automation both come to the fore. Some companies address standardization first because they see this as a base for the implementation of an AP automation solution. 

By doing so, organizations attempt to gain transparency and improve efficiency. Standardization will help you define clear and consistent flows that can be implemented across offices and entities.  

Another decision companies might make at this stage is about the scope of the technological implementation. In most cases, they opt for a single global AP invoice processing platform which results in higher visibility, more control, and greater efficiency as we discuss in greater detail below.  

This brings us to our next subject. What expectations do companies have as they set off on their AP automation journey?

What are enterprises trying to achieve by automating AP processes?

There are many factors that drive companies to finally get serious about automation. No one regrets saying goodbye to those time-consuming traditional or manual methods of processing invoices at scale. Automation saves money, eliminates human error, and relieves AP agents off the burden of repetitive, routine tasks. But of course there are many other benefits of automating AP processes. Furthermore, the incredible advances in Artificial Intelligence make automation a technological and competitive imperative. 

Below is a detailed list of the main objectives behind the move to implement AP automation technology:

• Enhanced efficiency. Streamline invoice processing, eliminate manual data entry, approvals, and routing. Automation reduces processing times, increases employee productivity, and frees up resources for more strategic tasks.

• Reduced costs. Reduce labor costs associated with manual invoice processing. Additionally, automation minimizes errors, late payments, and vendor disputes, further lowering costs.

• Improve accuracy and compliance. Ensure accuracy in your invoice data capture, approvals, and payments, minimizing errors and enhance compliance with financial regulations and internal control policies. 
   
• Greater visibility and control. Gain visibility across the entire AP process, enabling businesses to monitor invoice status, make better decisions, and identify potential issues promptly. 
   
• Optimized cash flow management. Improved invoice processing and payment cycles lead to better cash flow management, allowing businesses to optimize their financial resources.

• Better relationships with vendors. Timely and accurate payments, streamlined communication, and self-service portals foster stronger relationships with vendors, improving collaboration and supplier satisfaction. 
   
• Scalability and agility. Accommodate changing business volumes and acquisitions, and adapt to evolving processes, ensuring agility and preparedness for growth. This is mission-critical in your choice of AP automation software. Cevinio’s solution supports multi-ERP connections; it is language-agnostic and future-proof to support the growth of your business.

• Minimized risks and fraud. Automated controls and audit trails minimize the risk of errors, fraud, and non-compliance, safeguarding financial assets and protecting the company’s reputation. 
   
• Boost data quality and insights. AP automation tools capture and standardize invoice processing data, enhance data quality, and enable businesses to gain valuable insights into productivity patterns, supplier performance, and optimization opportunities. Cevinio’s Analytics Suite provides a collection of dashboards and views that we invite you to discover.

• Higher employee satisfaction and engagement. Automating repetitive and routine work frees up time for your employees to focus on tasks that add greater value – and are also much more motivating. 

Deciding between standardization and automation poses a challenge for finance leaders. Standardization solidifies AP operations but it’s long-term timeline clashes with the urgency to move towards automation. Drawing from our global enterprise support experience, we advocate for a combined approach. Addressing standardization and automation concurrently accelerates project completion and ensures quicker ROI.

Standardization hand-in-hand with automation 

At Cevinio, we believe that standardization and automation should go hand-in-hand. To help you envision how this approach plays out “on the ground” we have a series of recommendations for AP teams and finance leaders:

1. The power of a compact and committed team
   Efficient collaboration in automation and standardization discussions requires a focused approach. Forming a small, dedicated team with diverse representation enables streamlined decision-making and benchmarked progress. It’s crucial to include members with expertise covering internal processes, tools, and requirements for optimal outcomes.
2. The selection of a trustworthy supplier 
   Choosing a supplier is an important task, as the right partner can make a big difference in achieving your desired outcomes. A list of requirements will help with the selection process, allowing you match them with the vendors’ capabilities.  
    
   For example, Cevinio specializes in AI-powered tools for global enterprises. Our expertise includes handling intricate invoice scenarios, navigating global and local compliance regulations, and enhancing productivity and control at scale.
3. The framework
   Ready to begin the blueprint phase? Allocate dedicated time to craft a high-quality document essential for a seamless standardization process. Designing the blueprint precedes process automation and significantly influences ROI and automation success. It ensures the team gains clarity upfront about future AP processes and requirements and creates clarity and transparency around the decisions that are taken in the course of your initiative. At this framework stage, Cevinio is ready to assist your teams in analyzing your current processes and advising best-practice set-ups.
4. The scenarios
   The project team’s approach can be categorized into two methods: the “bit-by-bit” approach, involving the separate design and testing of parts of your processes – with the risk of missing gaps; and a “scenario-centric” approach, widely considered to be more effective. In the latter method you devise end-to-end scenarios, and then test select use cases with stakeholders before going live. This forces you to set priorities about which scenarios ought to be tackled first.
5. Prioritize high-volume invoice situations
   Uncertain about which scenarios the project team should prioritize? Our suggestion is to group your invoices by volume and concentrate on those that occur most frequently. Once these are standardized and automated, you’ll achieve huge savings in time and costs straight out of the gate.
6. Ensure interaction
   While a core team leads the project, collaboration with other stakeholders and experts is crucial. Establishing communication channels with internal process masters and vendor experts enhances decision-making and engagement throughout the project.
7. Navigating organizational change
   Effective change management is crucial for standardization and automation success. A well-defined plan brings benefits such as mitigating disruptions, improving alignment, increasing adoption, and fostering innovation.

We hope that these recommendations help you in your AP transformation journey.

Conclusion

In our exploration of the question, "What comes first: standardization or automation?”, a combined approach emerges as the most pragmatic solution.

At Cevinio, we advocate for simultaneous efforts in standardization and automation, exploiting the synergy between the two. When standardization and automation go hand-in-hand, you foster a harmonious integration of streamlined processes and cutting-edge technology.  

We invite you to start exploring the market and talk to our experts to discover the possibilities and capabilities of our autonomous invoice processing solutions. We are looking forward to helping you achieve your AP goals!