For Cloud-Based AP Management, Sky’s The Limit

In the small and mid-market arenas, AP management can use some modernization. Here’s how Laurent Charpentier, chief innovation officer of Yooz, sees the benefits and challenges of moving to the cloud for AP automation.

Accounts payable automation has advantages in helping reduce costs and impacting a firm’s bottom line in meaningful ways, especially for small to mid-sized firms. The challenge is to get those firms that would benefit most to take the plunge and move to the cloud, says AP automation outfit Yooz.

In an interview with PYMNTS, Laurent Charpentier, the company’s North America chief innovation officer, said that education remains key to getting small and medium-sized businesses to feel comfortable with adopting cloud-based and automated accounts payable services. Key concerns when adopting software platforms come as business owners and finance executives want to know “about security and also how services are available 24/7.” There’s even discussion over, if needed or decided, how a firm can choose to walk away from a service that automates so many functions.

Charpentier maintained that security concerns are traditionally addressed by his firm with encryption and “a strong sense of how and when they can control the audit trail and to track the history” of invoices from receipt through to approval and settlement.

In addition, the movement to cloud-based software has cost advantages, continued Charpentier, in that there is no need to install additional hardware on premises to scale into automated services. Many firms look to cut costs, with an eye on the bottom line, but, in fact, said Charpentier, “accounts payable can be a place to start,” with a movement to the cloud able to help automate and streamline as much as 80 percent of the accounts payable process, which, of course, saves time in addition to money.

Even today, with the technology available, SMBs, said Charpentier, continue to use paper-based and manual processes to route invoices and issue paper checks, which leads to lengthy cash flow cycles. In Yooz’s own study, automation can be seen to add, on average, across industries, as much as 50 basis points to profit, which can be significant. Charpentier told PYMNTS, in one illustrative example, that one Yooz client, a nursing home operator with as many as 30 locations, was now equipped with automated AP management so that invoices can be scanned and maintained. Processes are streamlined so that AP turnaround can be reduced from 20 days to as few as four, said Charpentier, and also allow for the capture of early payment discounts.

“We’ve noticed the main concern among SMBs has been a process issue,” said Charpentier, “which has been centered on how to map process and workflow with the need for a system that is flexible.” It is also imperative to have integration in place that can “capture and move it with optimal … flow through the system,” added the executive. Finally, said Charpentier, software processes, installed without disrupting legacy systems, can be simple to use, merely mandating that users open apps and documents and go from there, an advantage especially useful as, via the iPhone, the cloud software can be used “in the field,” with image capture and communication with back office professionals, facilitating a relatively easy transition from paper to electronic invoice format.