Three Layers of AP Automation—And How to Approach Them

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Accounts payable departments run on documents—but documents don’t need to slow AP down.

Invoices come in every day from a variety of sources—especially mail, email, and fax. As a result, routing and approving invoices is often a manual effort. And manual efforts often take too long and get too complicated. An invoice could be lost or simply forgotten. Once it’s finally approved, you then have to rekey data from the invoice into your system. It doesn’t have to be that way anymore.

Enter: AP automation.

Organizations achieve AP automation with document management solutions. With the right solution, manual processes for invoice capture, data entry, and workflow routing become a thing of the past. Your documents become more secure, and your employees are able to work smarter, not harder.

AP automation doesn’t need to be complicated. It can be simple.

The best way to approach AP automation—and get your project off the ground quickly—is to take it in layers. There are three primary layers of automation: simple, advanced, and complete. Simple automation might be enough for your organization, and you can stop there. Perhaps you want to bring advanced automation into the picture. Or, complete automation might be the best fit for your organization.

When you take automation in layers, you create a smooth transition that works for you, your organization, and every employee. Plus, you’ll make it easy to see ROI faster.

Simple Automation: OCR and Barcoding

Start with the paper. Namely, start with the paper invoices.

You can’t always control how your organization receives invoices. As a result, there’s always a myriad of ways invoices arrive: paper by mail, paper by fax, or electronic via email. That’s a lot to keep track of, and it likely involves a different system for each type of invoice. Managing invoices in disparate systems is inefficient, and it takes up too much valuable AP time.

So, get rid of your biggest complication: the paper. Digitize paper invoices as they arrive. Scan them into your electronic document management system. Add optical character recognition (OCR) and barcoding to index invoices—and make them easier to find in the future.

OCR and barcoding also cuts down on manually re-keying information. Instead of scanning an invoice, and then retyping all of the relevant information, you can extract it with OCR technology.

Once your invoices are digital, they can be securely routed electronically. Instead of literally chasing the paper around your office, the system will check in on invoices for you. Bottlenecks no longer need to be your concern—let the system nudge or bypass them for you. In the end, your invoices will be approved faster—and you’ll be able to pay them sooner.

It’s a simple first step towards AP automation, but it has an immediate impact on your organization. The paper and filing cabinets will disappear. You’ll be able to track invoices efficiently and ensure payments aren’t delayed. This first layer of automation might even be enough for your organization—or you may want more.

Advanced Automation: Application Integration

Take AP automation even further by integrating your applications.

Not all of your information is in one spot. You might have an electronic document management system where your invoices live. And you might also have enterprise resource planning (ERP) applications like Great Plains that help you manage your accounts. The information spread across all of your systems should always match.

Making sure it’s consistent, however, can involve a lot of manual work. Data from an invoice may need to be manually entered into the ERP, for instance. Or you have to cross-reference your invoice with the ERP yourself, and that takes time, too.

That’s where integrating your applications gives you an edge. Data can be synced from an invoice into your ERP with the touch of a button. Plus, when a new invoice comes in, your system can verify information with your ERP (i.e., customer name or number). And those hours of manual effort? They’re no longer necessary.

When you implement the second layer of AP automation, you’ll strengthen the first layer. OCR will be more accurate. For instance, once one value on the invoice is recognized (customer number), the system can pull in the rest of the information (customer name, etc.) from the database.

Each layer of AP automation makes your system stronger and your processes more efficient. The third and final layer of AP automation will take your organization even further.

Complete Automation: Intelligent Capture

Go fully automated by implementing intelligent capture.

Need an even more hands-off approach to invoice processing? Intelligent capture—the third layer of AP automation—might be a smart choice for your organization.

Intelligent capture software does much of the work for you. Recognize text and key information on an invoice? Check. Sync data from an invoice across all of your systems? Check. Match an invoice with a purchase order (PO) automatically? Check. Take care of almost any tedious task you might encounter in your AP process? Check.

In fact, there is only one exception to intelligent capture. Paper invoices still need to be scanned. But everything from scanning on is fully automated.

The third layer of AP automation builds on the first two. Everything—invoice capture, data entry, and workflow—comes together and involves minimal effort for you. This layer of automation is especially suited for organizations that receive a high volume of invoices. 

AP Automation: Just for You

AP automation doesn’t go from 0 to 60 in a snap. But when you approach AP automation one layer at a time, you can give your organization a smooth transition and speedy ROI.

So, start with the first layer and eliminate the paper. Layer on automation from there, as needed. And remember, your organization might not need every layer.

What will work best for your organization depends on:

• The volume of invoices you receive
• The number of processors in your AP department
• Whether you need to integrate your systems