Is AP Automation Enough?

Is AP Automation Enough

Is AP Automation Enough?

What you are missing by not incorporating Procurement Automation with AP Automation
by Salim Khalife – Founder, President and CEO

Automating accounts payable processes makes smart business sense. The benefits of AP automation have been proven by industry research over and over again. Most companies, in fact, are leveraging at least some aspects of AP automation. But is it enough? Where does AP Automation begin and end? What are you missing by not extending automation beyond payables and into the broader spend management process?

Let’s start with the basics of AP Automation.

Accounts Payable automation (AP Automation) refers to technology that is used to streamline and automate accounts payable processes, eliminating redundant manual tasks and data entry, and providing better visibility and control into and over accounts payable transactions. Done right, AP Automation can drive cost savings through faster invoice processing, better discount capture, and lower labor costs.

There are a couple of key consideration as you review AP Automation applications:

  1. Does the OCR technology in the AP Automation application capture invoice data down to the line-level details? If it only captures “header” information, you’ll still need to manually touch each invoice, robbing much of the efficiency and making processes such as invoice matching much more difficult.
  2. AP Automation only kicks in when an invoice is received – leaving the larger purchasing and spend process unaddressed.


To reap substantial benefits of AP automation, successful organizations combine it with a larger spend management initiative that incorporates the entire procurement process, including purchasing and requisitioning, into a true procurement automation application. Procurement Automation works in tandem with AP Automation to generate further efficiencies and cost savings.

So what is Procurement Automation, what functions and processes can it automate, and what are the benefits? These are questions that we are often asked during our discussions with prospects.

What is Procurement Automation and how can it help?

Procurement Automation refers to the use of technology to speed up and streamline the procurement process by automating repetitive and time-intensive tasks, standardizing core business processes, and speeding and streamlining the entire procure-to-pay cycle. Below are a few of the features and benefits a robust Procurement Automation solution can deliver.

Faster, Lower-Cost Purchase Order Processing

A Levvel Research study found that companies with cloud-based procurement management software are able to process more than twice as many POs a month than companies with manual procurement processes. The study also found that the average cost to process a PO goes down dramatically with a Procurement Automation solution, regardless of company size.

Purchase Requisitions That Get Used

Requisitions are typically the first step in the procurement process and can set the stage for overall efficiency throughout the procure-to-pay cycle. By empowering employees and managers with the ability to create and approve requisitions from their desktops or mobile devices, they can accomplish these tasks on their schedule, minimizing delays. Procurement Automation solutions may combine mobile requisition functionality with technologies such as guided buying catalogs and PunchOut capabilities, providing convenience, control, and efficiencies that help keep more spend under an organization’s direct control.

Improved Vendor and Contract Management

Failure to check against or consider contracts can lead to millions of dollars in maverick spend for some organizations. Without controls in place, organizations risk purchasing items from suppliers at higher rates than long-standing contract terms dictate. Procurement management software provides the tools and structure to effectively manage suppliers and supplier contracts.

Better Budget Control

Generally, organizations either put the responsibility on the purchase requester to check their purchase against their own budget or rely on the procurement manager to monitor all budgets throughout the organization. While this is more effective than no control, it can be very difficult to maintain complete visibility into departmental spend, and control over all budgets, without a Procurement Management tool that includes budget control capabilities.

Streamlined Approval Workflow

With too many approval steps in place, the overall PO lifecycle can be greatly lengthened and users look for ways to subvert the system. On the other hand, when individual purchase requesters in different departments have the authority to submit POs directly to suppliers, the organization runs the risk of much higher maverick spend. When it comes to a proper purchasing approval workflow, the key is finding the proper balance between control and simplicity. Procurement Management software can help you find and enforce a balanced approval workflow.

OCR Data Capture

Purchasing tasks are data-entry intensive, repetitive, and accuracy is vital — making OCR an ideal automation tool and one that you should look for in a Procurement Automation solution. OCR can be used to scan invoices and capture information securely — even down to the line level to reduce the time users need to spend on keying and correcting data.

You Don’t Have to Choose Just One

The corporate spend cycle is ripe for automation opportunities and smart companies take advantage of the automation tools that can help optimize the entire procure-to-pay cycle. Together, AP Automation and Procurement Automation allow organizations to automate much of the spend cycle. This not only reduces the risk of delays and inaccuracies, it lowers overall procurement costs, and frees your team to work on more strategic tasks.

You may also like:

5 Reasons to Consider a More Advanced Procurement Solution
Procurement, purchasing and sourcing— what’s the difference?
Making A Case For Procurement Automation

About the author:

Salim Khalife is the founder, president and CEO of Paramount WorkPlace, a technology company that develops, sells, and supports advanced web-based and mobile requisition, procurement, and expense software solutions for mid-market organizations. The company introduced its first cloud-based SaaS requisition application in 1997 and continues to innovate and expand its partnerships and integrations ever since. Learn more at www.paramountworkplace.com.

It’s really easy now for employees to create their expense reports. From the app or their computer, they just select the expense lines they want to include on the report and submit it. It then starts routing automatically through the approval process we’ve set up.

— Joe Crupper, CPA, Director of General and Trust Accounting at Free Methodist Foundation

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