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Writer's pictureJack Arnston

If Everyone is Automating Their AP Processes, Should You Too?


Remember when you were a kid and did something wrong, got caught, and used the excuse, “I did it because my friends did it”? And remember the reply you got from your parents? “If all your friends jumped off a bridge would you jump too?” Well today it seems as if everyone is automating their AP processes, so I ask the question, should you too?


It is always easy to follow the leader, that is the safe route. We are told that true mavericks take the road less traveled and find new ways to innovate. They don’t print books about leaders who did what others before them did, and thus were successful. So why follow the pack and automate your AP processes?


Well we have all read business school case studies about companies that failed to automate and keep current with technology. And what we have read is not typically pretty. Companies like RIM (Blackberry), Nokia, Barnes & Noble, Kodak and Blockbuster are just some of the recent companies that come to mind. Their reluctance or unwillingness to adapt had catastrophic consequences.


Now, I do not mean to imply that if you do not automate your company will fail. But what I would caution is that by failing to automate and stay current you do open yourself up to a number of different risks. First, you will remain inefficient. Many studies have been conducted that prove that automating your AP processes saves a minimum of 50 percent in operations costs. Next, you will continue to be less nimble to react to cash flow issues, take advantage of early pay discounts, and be able to proactively manage your payables process. In a time when the economy is recovering and it is more difficult to recruit good talented employees, having old and outdated processes becomes a red flag to top flight candidates. These individuals want to work for companies that are progressive. The best candidates want to work smarter and more efficiently.


So, what is holding you back? Is it cost? We already established that with the right system will save you money, and today's solutions are priced so that nearly any mid-sized company can afford the technology. Is it time? We have also determined that your staff will be more efficient. Is it the fear of change? If this is the reason then you have some sole searching to do. Companies that fail to adapt, die. It is not typically an immediate death, it is usually drawn out, as we have seen with Sears.


Taking the reins and moving forward it the necessary thing to do. As a leader, you should feel compelled to implement productive changes to your processes. The nice thing about implementing AP process automation is that you are no longer a trail blazer. Rather you are deploying technology that is now considered mainstream, proven and reliable. You are also positioning your company for future growth without the need to add additional people to you legacy AP process.


Finally, I often hear from smaller companies that they only have one or two AP clerks, so the cost savings is not there to deploy a solution.  If this is your excuse, you need to begin thinking more strategically. If you have good workers, doing your AP processing, then free them of the laborious tasks of keying information from an invoice to your accounting software. Put them in more value-added positions where they can grow professionally and have a greater impact on your organization. Begin taking control of your processes. Stop paying the same invoice more than once. Start taking advantage of early payment discounts. Have the ability to see into the future to understand your cash flow needs. Never again miss paying an invoice on time because you did not know it existed.


It is time to take the lead, and this time it is okay too.


Jack Arnston is a Principal at The Priton Group. He can be reached at jarnston@pritongroup.com.

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