Spend Management Meets AP Automation

As reported in an article published by Top Sage Resellers, Sage recently conducted a survey of customers that identified accounts payable (AP) automation as the most requested new functionality. This is big news in the ERP world, where we’ve historically seen more technology investments occurring on the revenue-generating side of operations. AP automation can help organizations control spend from beginning to end. What is AP automation – and is it all it’s cracked to be?

What AP automation is – and what it isn’t

AP automation is a broad term that refers to the automation of the processes surrounding entering, approving and paying invoices, to reduce paper and postage costs and streamline invoice handling. Document imaging capabilities are often associated with AP automation solutions, as are workflow automation and electronic payments. Whenever companies can automate routine processes, they can gain efficiencies, reduce overhead and improve accuracy. All good things to be sure.

But AP automation only kicks in when an invoice is received – leaving the larger purchasing process unaddressed. To reap the benefits of AP automation, it is best combined with a larger spend management initiative.

Spend management is about controlling the spend before it happens

Spend Management is an overarching process that brings all corporate spending under control or management, and typically encompasses processes such as outsourcing, procurement, e-procurement, procure-to-pay and supply chain management.

Spend management happens long before the invoice ever exists. Once a purchase has been approved, AP automation comes into play, but there is much activity – and opportunity to improve – that happens earlier.

Key components of spend management that aren’t typically addressed by AP automation include:

• Supplier Management – This includes vendor portals, vendor contract management, vendor approval and requests for quotes. Automating supplier management allows you to shift your focus from cost cutting and communications to determining more important areas of your supplier partnerships.
• Requisition – Control “rogue spending” while making it easier for your purchasing team to get their job done. Your team can browse and shop your punch-out or guided buying catalogs, save items to a shopping cart or submit as a requisition that can be routed automatically for approval.
• Purchase Order Management – Tracking, managing, organizing and routing requests for PO creation helps you keep purchasing commitments up to date and streamlines the procurement process company-wide.
• Advanced Budgeting Engine for Procurement – Budget detail visibility throughout the entire requisition and procurement with real-time GL budget validation makes it easy for your team to make decisions not just based on items and vendors, but also based on any budget limitations.

So, what’s the takeaway?

While AP automation can deliver valuable efficiencies and cost savings, it’s value is increased when combined with a larger initiative to manage spending from the outset with a spend management solution. Want to learn more about the subject? PairSoft provides both AP automation and spend management tools that integrate with your Sage ERP solution.