If you’re the head of an accounting department or a CFO, the need for accounts payable automation might be obvious. You already know that traditional paper-based processes mean countless staff hours spent handling invoices, looking for supporting documents and getting approvals. But how do you get the CEO or Managing Director on board with this new technology?
Accounting personnel may encounter a variety of obstacles when trying to get the rest of the company to buy into an automated accounts payable (AP) process. In addition to general budget limitations, these obstacles may include:
- Benefits don’t appear relevant at the corporate level: Adopting document management and accounts payable automation may be important for the accounting department, but executives might not see how the solution is relevant to the company as a whole.
- Reluctance to take on a new initiative: The CEO may be reluctant to push a new initiative that moves employees away from existing, paper-based processes. For example, if executives anticipate employee resistance based on previous experience, they may avoid taking on process changes that don’t seem absolutely necessary.
- Unclear purpose for the use of time saved: The value of improving efficiency might appear self-evident, but the CEO wants to see how that efficiency gain plays out. If accounts payable automation would save your department a certain number of hours, do you plan to have employees take on additional duties, or would you reduce your headcount to save money for the company?
When proposing a document management system for the accounting department, it’s important to show how this tool would impact the company and its executives.
A good approach is to start with the general benefits of accounts payable automation and match those benefits to your company’s specific needs. This helps you identify the most relevant and urgent reasons for executives to support a digital document management initiative.
The benefits of accounts payable automation start with faster throughput of the payables approval process. A faster AP process improves vendor relations and helps you capture early payment discounts. It also reduces the time your company spends processing each invoice. The accounting department has fewer unapproved invoices to monitor, and digital document management makes it easy for department heads to approve an invoice without having to hunt for supporting documents.
Here are a few examples of how to position these general benefits to help get executive buy-in:
- Improving vendor relationships: Failing to pay your vendors and suppliers is a sure way to strain those relationships. The importance of good vendor relationships usually makes a lot of sense to management at midsize companies, depending on your supply chain management and how much your company relies on the quality and speed of your vendors. Paying vendors in a timely manner should result in receiving better prices and speedier service.
- Saving money through faster processing: Many suppliers offer early payment discounts of 2 or 3 percent. With an inefficient system, it could take weeks to route and approve invoices for payment, causing your company to miss out on these savings. If your suppliers offer early payment discounts, this is a straightforward way to show executives the cost benefits of accounts payable automation.
- Reducing time spent preparing for audits: Preparing for an audit often demands a huge investment of staff time spent finding and organising documents requested by the auditors. Automation eliminates searching and stressing to locate these documents. With digitisation, documents are located in a centralised, searchable repository. The information can be shared electronically with authorised personnel.
- Becoming a more modern, efficient organisation: Upper management is usually eager to make a company more efficient and modern, and replacing paper for digital document management is clearly a move in the right direction. This is more of an emotional argument than a clear calculation of savings, and its effectiveness depends on the personality of the CEO.
In the end, showing the relevance of office automation for your particular company is key to getting executive buy-in for accounts payable automation. Instead of presenting general statistics about the benefits of document management, be prepared to show how you plan to get results in your specific situation.
To see how an accounts payable system would work for your business and the value it would bring, we are offering free consultations with businesses to show how implementing systems like these would save time and money, interested? Call 01282 479466 or email email@example.com.