AP automation is no longer the new trend for finance departments—it’s the norm. Over the past few years, automated solutions have proven to be the easiest and most efficient way to manage B2B payables, but selling payment automation and eInvoicing to board members isn’t as simple.
According to a recent PayStream Advisors report, most organizations shy away from automated AP solutions for a few reasons. Most don’t set aside the budget (36 percent), while a vast majority of other organizations believe their current AP processes work just fine (21 percent). So, AP managers and specialists are forced to juggle paper-based processes and other HOA responsibilities until they build a business case for AP automation worth selling.
Here’s the deal: leaders are looking for ways to reduce spending while increasing profits. Luckily, AP automation does just that with a few other benefits board members and leaders can appreciate.
So, how do you build a case for AP automation?
It’s all about finding a balance. A blend of case studies, research, and demos can persuade your team, but to sell automation to your boss, having the answers to key questions is even more important. We’re here to answer a few questions leaders may raise when you’re building a business case for AP automation.
Why AP Automation?
AP automation streamlines current manual HOA payment processes from start to finish. Over time, finance departments have developed “tried and true” accounts payable processes. Even though these workflows may be time-consuming and prone to errors, they still work. Consequently, organizations don’t allocate budget for AP automation solutions. After all, AP automation brings forth a bundle of fears: no ROI, lack of control, and a steep learning curve for the new technology.
So, Why Fix What’s Not Broken?
The answer is simple—time and money. Even though current manual AP processes work, they’re riddled with errors, risks, and inefficiencies. There are other electronic accounts payable efforts that digitize some of the payment and invoice process— OCR or PDF—but different parts of the process that aren’t digitized still have to be manually managed.
PayStream Advisors shared an extensive list of AP challenges, including manual data entry and inefficient processes (48%). Wasteful AP workflows that are fully paper-based or only automate half of the process often lead to pricey pitfalls for HOAs, including late payments, missed discounts, and an overall lack of productivity.
For most AP solutions, from the moment the invoice is received, details are electronically extracted. As a result, processing costs are immediately reduced due to less paper, storage, and mailing expenses. After the invoice is entered, approval workflows are routed and payment is disbursed based on your vendor’s preferred payment method. This streamlined workflow allows your team to spend more hours volunteering, planning, and managing HOA responsibilities which directly impact homeowners.
Why Now? What If We Wait?
Every organization is undergoing change, whether it’s a new partner or organizational structure. It may not seem like the right time to implement new technology, but leaders may not be aware of the risks that come with manual processes. Every day your team manually handles vendor invoices and payments means more wasted money and time. In fact, it can cost up to $22 to manually process an invoice and anywhere between $4 and $20 to process a paper check. Years of these processes add up to quite a sum your association could spend more efficiently.
In addition to expensive processing costs, prolonging AP automation increases the risk of fraud. Stacks of printed invoices and paper checks used in the payment cycle put your organization in danger. A recent AFP report shared that 78 percent of surveyed organizations were targeted for payment fraud in 2017, with 74 percent of those businesses primarily being targeted by check.
A big selling point for your board leaders is the immediate improved security for each invoice and payment after implementation. With these security measures, there’s less risk that fraud will occur. These improved security features include:
- Paper-free processes to reduce the risk of information falling into the wrong hands or suspicious vendor invoices
- Digitized vendor verification, including requiring W9s and 1099s before processing the initial payment or invoice
- Positive Pay to double-check every check for duplicates or fraud attempts
- Increased control with a streamlined, automated process follows your current manual process without skipping a step
How Can We Measure the Success of AP Automation?
After implementing AP automation, board members will be eager to hear about changes, constraints, and successes. “How much time and money was saved?” “What does the payment process look like now?” It’s important to share any big wins so board leaders will know they made the right choice. Your team is bound to expect immediate wins such as less paper and less time spent manually handling approvals, but there’s much more to evaluate.
Leaders may ask for more data-driven answers to questions about vendor performance, the average approval time, or invoice processing costs. With AP automation, your board will have the qualitative and quantitative big data needed to make well-informed decisions, get answers to those questions, and more.
AP automation solutions include customizable reports with all historical payment information, including invoices, payment disbursement dates, and any additional vendor and payment information your HOA board needs. Both board leaders and property managers will also have the visibility and transparency to measure the impact of financial decisions and budget better. Other convincing success measurements include improved cost savings, payment processing, and approval cycle time.
Measuring success is easier when your board members have more time to analyze data properly. Your team will be able to provide transparency into vendors, payments, and invoices—all without paper. No matter how your board measures success, community managers will find happiness in knowing that this easy, efficient paperless process will allow them to spend time focusing on their associations and concerns that matter most: the comfort of their community members.
Free On-Demand Webinar: Building a Business Case for AP Automation for TOPS Users
Want to learn more about how AP Automation can help your organization improve your AP and payment process? TOPS and AvidXchange is here to help finance departments build a business case for AP Automation without hesitation. Watch our recently recorded webinar Build a Business Case for AP Automation for TOPS Users.
AvidXchange revolutionizes the way companies pay their bills. Serving more than 6,000 clients throughout North America, AvidXchange is an industry leader in automating invoice and payment processes for midmarket companies spanning multiple industries including HOA. AvidXchange has been recognized as one of the 50 fastest-growing private companies in the Charlotte area for six consecutive years, ranked among Deloitte’s Fast 500 this past year, and recently was named one of the top 100 technology companies in North America by Red Herring. For more information, visit us at www.avidxchange.com.