The history of accounts payable automation is relatively short and painful. The future looks much brighter.
Until the 1990s, the accounts payable world harbored paper piles, filing cabinets, and calculators, with most of the work done manually. Toward the end of the last century, ERP systems gained traction in the market. This was the first wave of electronic innovation, and these systems took years to implement, requiring extensive IT resources. Some companies tried implementing electronic invoicing, but it never fulfilled its early promises. Only the largest companies in the world could afford to operate the hardware and software required.
In the early 2000s, we started to see the rise of invoice scanning and workflow systems and cloud-based front-end management systems. These could automate pieces of the AP workflow and integrate with ERP systems, but, again, not without a strain on IT teams to deploy and configure them. Then about 10 or 15 years ago, accounting systems started to move to the cloud. Part of the promise was that it would be faster and easier to deploy—and it was, relative to before. But it was still not quick or easy.
Payments are the final component of the AP automation race. Until about a decade ago, if you wanted electronic payments, you would set up an ACH or card program through your bank. That cumbersome process also required IT help to create the specific payment files required by banks.
Today, you can get up and running with automated payments in just a few weeks. But even as awareness for the payment automation solution market grows, companies who might be interested dismiss the possibility out of hand, based on negative past experiences. They think the implementation will be a big IT project—that it’ll take months to complete, and that it will be expensive and disruptive. They may also assume they’ll need to hire an outside consultant, just like they did with previous automation projects.
Once implemented, the idea of maintaining such a robust software—meeting bank and card providers’ file transmission requirements, and handling ongoing supplier enablement and support, for example—became far too intimidating. Those are jobs in and of themselves, and most companies don’t have the time to jump through those hoops while maintaining their check program.
Some companies who have tried card or ACH programs scrap the effort and go back to writing checks. It might be manual, but they only have to manage one workflow.
These earlier automation efforts were so punishing that there’s a healthy amount of skepticism about undertaking anything new. Even though younger companies have perfected the automation process, their potential clients are so tired of trying to get programs off the ground that they’re not interested in hearing another pitch.
I’m here to tell you that implementing payment automation today is much easier than 15 or 20 years ago. The most significant change is the streamlined ERP systems’ integration capabilities. Unlike banks, you don’t have to provide files in a unique format to get started—most payment solutions can build the solution around your existing files. In other words, payment automation providers keep it simple.
By using the payment information that your ERP provides, the deployment barrier is broken down. It’s so easy to get started. Even the most complex enterprise systems with multiple bank accounts can get started in around eight weeks and with minimal IT and tech resource involvement. Companies with fewer bank accounts can even be up and running in as few as four weeks.
AP is one of the last areas that businesses have to automate. For decades, technology built for AP functions was minimal—even laughable. Early adopters—those who got involved in the first waves of automation—have the scars to prove it. Their negative experiences have compounded into the belief that software implementation—even cloud software—is difficult and not worth the time. These days that couldn’t be farther from the truth.