How to Choose the Best Invoice Processing Software

Posted by Rich Arminio on Jun 9, 2021 2:45:25 PM
Rich Arminio

The business case for invoice processing software is proven and compelling.  But choosing the wrong invoice processing software can undermine an otherwise solid business case.

To keep your business case for accounts payable automation on track, here are some considerations:

Best Invoice Processing Software

Set your objectives: Creating short-term and long-term goals is the first step of selecting the right invoice processing software. Ideally, these goals should be developed in consultation with stakeholders such as procurement, treasury, senior management, and front-line employees. Setting these objectives keeps the evaluation team focused on what’s important.

Get technical: It’s easy to become overwhelmed by different approaches to AP automation. You don’t need to become an automation expert. But you need to make sure that prospective solutions will meet your needs from a technical standpoint.

  • First, be sure the software allows you to configure workflow rules to eliminate paper handling and email shuffling, help eliminate bottlenecks, and ensure the control and tracking of documents.
  • Second, make sure the software was designed for invoice processing and not another application, such as procurement and/or travel and expense management, with accounts payable capabilities “bolted on.”
  • Lastly, consider the level of integration required with ERP systems. Tight integration with ERP systems such as SAP, Oracle, MS Dynamics and Sage enhances the invoice processing software’s usability and improves payback on both the solution and the ERP.

Make sure your business case covers all the bases: A business case for accounts payable automation should include three key elements: the hard savings (e.g. labor costs, physical document storage and retrieval, software licenses), the soft savings (e.g. faster cycle times, efficiency improvements, enhanced supplier relations), and risk mitigation (e.g. fewer lost or misplaced invoices, better document tracking and control, streamlined reporting and disaster recovery). The sections on hard and soft savings should include conservative, moderate and aggressive estimates. While developing your business case for automation, calculate your current processing cost-per-invoice and payment, considering the proportion that is non-purchase order based or non-goods orders, as well as overhead allocated by the company.

Keep your budget in mind: Nothing good comes of shopping for a car without having a budget in mind. The same is true when shopping for invoice processing software. Keeping your budget for automation in mind as you evaluate solutions keeps you grounded as you evaluate potential solutions. There is no point in engaging with a vendor whose technology is too expensive. Selecting software that meets budget constraints will also help win the backing of senior management. Also, be on the lookout for potential additional costs that will result in budget overruns. For instance, try to estimate any professional services fees required to properly configure the invoice processing software, as well as the costs associated with having a vendor’s staff on-site to implement the system and train your front-line staff.

Many accounts payable departments are challenged by manual processes and outdated technologies. The sudden shift to remote working has further disrupted operations and created new inefficiencies. Modern cloud based solutions address these challenges. Selecting the wrong software can undermine an otherwise solid business case. But following these considerations will help ensure that you maximize your automation investment and optimize your overall invoice-to-pay process. Are you ready to automate your accounts payable department?

Want help selecting the right invoice processing software?

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FAQ

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Tags: AP Automation, AP Automation Solutions, Accounts Payable Automation, Invoice Automation, Invoice Automation Solution, Invoice Processing Automation, Invoice Processing Software