Accounts Payable Automation (AP Automation) is a term used to describe the ongoing effort many companies take to streamline the Accounts Payable Workflow (AP Workflow) business process of their Accounts Payable department.
Of course, improving business processes is a big part of implementing a new ERP system like Acumatica Cloud ERP.
A big part of AP Automation is getting away from paper and only relying on digitally scanned invoice images.
Paper vs. AP Automation
It might surprise you, but many companies still keep Accounts Payable Invoice paper copies. Even companies running on a modern ERP system like Acumatica Cloud ERP.
Why the love affair with paper?
My thoughts on why this is:
1. ROI calculations can be uncertain.
Before a company adds an AP Automation solution to their list of existing software solutions, they have to be able to calculate ROI (Return on Investment) so they can justify the purchase of more software.
The ROI calculation can be scary for some companies because it’s not an exercise that they are accustomed to doing. Even though you can calculate the estimated amount of money that you will save if you go with an AP Automation solution, there are certain assumptions that go into that calculation. And you have to wonder, are those assumptions correct?
When faced with a situation of having to justify additional software costs vs. sticking with the status quo, the status quo often wins.
2. Accounts Payable is not a high priority.
Accounts Payable is quite possibly the absolute last area in a business that people want to think about touching. Want me to invest in Marketing? Sure, no problem. Sales? Absolutely. Accounts Payable? Go talk to Janet, she deals with that.
Accounts Payable is not that complicated. You enter invoices and pay them. It’s not an area that requires a lot of skill. It’s also not an area that requires a lot of thinking. Sorry to be so blunt.
I remember when I started my first Accounting internship back in college. They sat me in front of a computer, showed me how to login to their Accounting system (which was MAS 90), and walked me through how to enter Accounts Payable invoices. Then they put a stack of paper on my desk and showed me where to file each invoice after my data entry had been reviewed by a manager. I put on my headphones and “plugged in” to corporate America.
The point is that Accounts Payable is an area that most people don’t want to think about. They just want someone (other than themselves) to get it done.
3. Paper is more human than computers.
Don’t you just love paper? It’s “real”, physical, kinetic, with a smell that lets you gauge how old it is. It has a history, with thousands of important books like the Bible being written on paper and important documents like the Declaration of Independence being written on paper.
I learned a big paper lesson in the last few years. My dad was diagnosed with dementia about 3.5 years ago. He was a techy guy, good with computers and very comfortable reading on his phone. Early on in the disease he began having trouble with the computer and with the phone. Once familiar devices, they now became foreign objects to him. At church, he used to sing from a digital hymnal on his phone. As the disease progressed, he couldn’t use his phone anymore. But he did just fine singing from the old paper hymnal for quite a while after that. Watching this was a big lesson for me, a technology professional, because I often justify my professional existence because of my ability to “eliminate paper”. I too someday may find myself unable to navigate the digital world, but still able to cling to the paper world a little while longer.
I can relate to paper because I know where it comes from. It comes from trees. I can’t relate to a computer with its processor and memory chip made in some sterile lab somewhere from some synthetic material that was mined on the moon for all I know.
I remember one time growing up, we were on a family vacation somewhere in Northern California or Oregon and we saw a sign for a tree processing company that did tours for the public. We pulled off and wound up going on a tour where we saw a tree come into a room via a conveyor belt, get the bark stripped off by high pressure water power, and get sent further down the line towards the saws. Sitting in a small room directly over the conveyor belt and in front of the saws was a 20-something “kid” who was pulling leavers to decide what saws to use on each tree. In a matter of seconds, he had to decide how he wanted to cut the tree based on its shape in order to get the most out of the tree. He pulled a lever and the desired saw blade automatically popped into place to make the cut. I distinctly remember my dad whispering to me, “that’s the guy with the college education”. It was one of many instances that I remember where my dad, who did not have a 4 year college degree, gently put in me a desire to go to college and get a bachelor’s degree.
Paper is fragile, with a limited life-span, something that we fragile human beings can relate to. I can’t relate to the “Cloud” with its unlimited bandwidth, unlimited storage, and unlimited potential. We human beings are anything but unlimited.
I can relate to paper because it’s more human than computers.
All this talk of paper is making me feel old.
That’s because the love of paper is a generational thing. Young people don’t want to deal with paper. They want everything to be digital.
But, just you wait young whipper snappers, one day you too will get old. And you might find yourself clinging to paper more desperately than you ever thought you would.
Now, don’t get me wrong, I’m not saying that paper is better than AP Automation / AP Workflow solutions. AP Automation / AP Workflow software is great. I’m just saying that I can understand why there are still some companies out there who continue to cling to their beloved paper invoice copies, file cabinets, and paper cuts.
AP Automation Solutions
There are many different AP Automation solutions out there and they have been around for years.
What caused an explosion in AP Automation software was, ironically, the September 11th, 2001 terrorist attacks in the United States. Why? Because air traffic was halted for such a long period of time.
At the time, the banks still required paper checks in order to cash checks against other bank accounts. In order to cash checks as quickly as possible, banks would fly these paper checks all over the country using planes so they could be cashed at the destination bank without too much delay. When the planes were grounded immediately following September 11th, 2001, this process was frozen. It was a painful lesson that no one wanted to have to repeat.
Congress enacted the Check 21 Act (click here) on October 28, 2003. This caused an explosion of AP Automation software vendors. So AP Automation software has been out there for quite a while.
Typically, AP Automation software solutions are standalone (often legacy) applications that then integrate with a variety of ERP systems.
Since Acumatica has gained a lot of momentum in the past few years, many of these AP Automation solutions have been flocking to Acumatica and building integrations. It’s definitely nice to have a number of different AP Automation options available to you if you are an Acumatica customer.
There is one AP Automation solution for Acumatica that I personally am a fan of.