Accounts Payable

AP Automation And ERP Growing In Tandem

ERP systems

Enterprise resource planning (ERP) systems began as a mid 20th century answer to increasingly complex inventory control and supply chain management issues. It could do a lot more though, and over time ERP has been endlessly adapted to many other data-intensive duties.

For its manifold uses, ERP is particularly valuable as an accounting solution. In the latest Next-Gen AP Automation Tracker, a PYMNTS and Bottomline Technologies collaboration, we provide an informative deep dive into how ERP and accounts payable (AP) automation are combined to form a superior invoice-to-payment-to-reconciliation process solution with a significant financial upside for all.

Hidden Efficiencies

Small and medium-sized businesses (SMBs) are driving impressive growth in ERP spending right now, snapping up cloud-based ERP solutions left and right, and for good reason. As the Next-Gen AP Automation Tracker states, “Implementing cloud-based ERP software has appealing benefits, but industry analysts find most companies lack the comprehensive AP capabilities necessary for efficient record keeping or rapid invoice and payment processing.”

Adding AP automation to an ERP system “… simplifies the invoicing process to the extent that it can cut the cost of processing a single invoice to $2.74 — far less than the industry average of $15.02. The time it takes to process an invoice also drops from 10.3 days to 3.5 days,” the report says.

The report details numerous ways that users of ERP-AP automation combos are constantly finding hidden efficiencies (and unexpected cost savings) by reducing human or computer error that results in duplicate invoices, missed payments, bad feelings and lost business relationships.

Integration jitters accompany ERP-AP automation, but those concerns are often exaggerated with AP automation projects particularly which, with the right planning, are gaining a reputation as one of the shortest and most painless integrations firms are likely to face.

Leveraging APIs

The leveraging of application programming interfaces (APIs) to realize the full potential of ERP with AP Automation is a key point of discussion in the latest Next-Gen AP Automation Tracker.

“There are multiple technology approaches a provider could take to solve for integration. Common examples include APIs and ERP-specific connectors, which can sometimes be API-based,” said Bill Wardwell, vice president of strategy and product at Bottomline. “APIs create plug-and-play connectivity between banking platforms, ERPs and other core business technologies or financial applications. As banks and FinTechs increasingly work together, alignment on what levels of integration customers need, the associated technical requirements and, ultimately, the approach to solving [collaborative strategies] will be critical,” he said.

Taking a cue from that collaborative approach, Wardwell says providers “must design solutions that easily integrate and connect to customers’ commonly used systems and banks.” That crosses over into how to design a compelling user experience — also crucial to ERP/AP success.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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