Many fintech companies offer accounts payable automation as an additional service to their customers. Accounts payable automation is a relatively new concept, and it has been gaining popularity among fintech in the last few years. Automating accounts payable can help B2B companies save time, increase accuracy, and decrease costs.
I had the opportunity to interview Eyal Rosenberg, Co-Founder & CEO of Nipendo, with whom I collaborate, and ask him several questions and practical tips regarding accounts payable (AP) automation.
Q: Hi Eyal, what type of B2B companies can benefit from AP Automation?
AP Automation applies to companies dealing with thousands of invoices per month and higher. The higher the invoice volume is, the higher the value is. Adding to the volume aspect, the complexities that come with many of the purchase to payment processes, the benefits of AP Automation technologies will increase dramatically.
Q: What type of ROI can companies receive by automating their accounts payable?
ROI is achieved through multiple channels:
- Efficiencies: Software Bots work around the clock on invoice reconciliation instead of your current team, relieving their tedious work.
- Scalability: No additional personnel or management is required to scale.
- Eliminate errors: Software Bots do not make mistakes and will track 100% of discrepancies and errors in the process. These Bots will fix the errors and work with your suppliers to resolve discrepancies immediately, resulting in error-free processing.
- Transparency: AP Automation platform will reflect all suppliers the current status of every interaction with you, thus turning emails and phone calls to your AP team redundant.
- Fraud Prevention: Transforming the process to digital leaves no space for any fraud. Payment will be executed only to the confirmed bank account of the registered supplier based on a fully validated invoice, matched against agreement/PO/GR and many other validations and verifications.
Combining the above subject clarifies the return companies make of their investment in AP Automation technologies, given the selected solution fully supports the described capabilities.
Q: What are the main challenges companies face when trying to implement AP automation?
One of the biggest challenges is selecting the right vendor for your AP Automation project as often vendors fail on their promise due to many reasons such as:
- Low supplier adoption rate: The technology fails to provide value to suppliers and make it easy for them to participate. The system is cumbersome and not user-friendly. Consequently, suppliers refuse to cooperate with customers’ requirements.
- Heavy manual investment to transform invoices to electronic format.
- No ability to validate invoices and reconcile them autonomously by the system.
- Instead of reducing work and number of FTEs, the system enforces additional manpower to manually scan invoices, key in data for suppliers, reconcile invoices manually, and more.
Unfortunately, companies realize the situation after they are deeply invested in the project, and they are being blamed for the poor supplier adoption rate; therefore, it is important to set milestones, quantitative goals, and timelines linked with a prize-penalty mechanism for protection.
Q: Does AP automation cover all aspects of the invoice-to-pay process, including invoice capture, invoice routing and approval, payment authorization, and payment execution?
The category definitions include all of the above and more though most technologies out there do not support all the requirements, and even with those that are proclaimed to be supported, only part of it is actually supported.
Q: What do the implementation, training, and support look like?
Implementing the Nipendo platform takes 10-12 weeks and includes two main tasks:
1. Setting up the integration with the customer ERP.
2. Implementing the customer’s business policies in the system and in the RPA engine.
Implementation involves standard project phases: Kick-off, design workshop, setup and configuration, UAT, training, and “go live.”
Design workshop: Nipendo and the customer analyze the P2P business processes and rules and define how to implement them in the system. During this phase, integration with the customer’s ERP system is also defined.
System setup and configuration: Both tasks are performed by configuration and don’t require development.
Integration is performed by using ready interfaces to the customer’s ERP or by using Nipendo’s advanced integration technology to set up the communications and API with the customer’s ERP system.
Business rules are implemented using Nipendo’s RPA design tool, which enables the setup and definition of the robot that addresses process governance rules and automatic validations, as well as the building of automatic workflows according to the customer’s business processes and documents content.
Training: The platform’s RPA process governance component includes the automatic instruction of suppliers on actions per document type and content. This feature, along with an intuitive system UX, encourages quick adoption of the system by suppliers without requiring specific training. Training can be provided through Webinars, video, and/or user guides if training is required.
More Info on Accounts Payable Automation
Accounting and finance teams of B2B companies can benefit from accounts payable automation because they spend most of their time tracking expenses and invoice payments which can be automated by fintech solutions such as Nipendo. This saves businesses money on audit fees while improving accuracy in reporting revenue numbers to internal stakeholders and external investors. In addition, automating AP reduces errors that occur during manual entry or data entry into accounting systems or ERP applications.
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