AP Automation: The Better Alternative to Outsourcing Accounts Payable

Managing accounts payable (AP) is an essential but challenging task that demands significant resources.

It’s not easy.

As the CFO, I have to mull over a number of factors that impact our AP team: 

• Cost control: CFOs are reducing or halting hiring to generate cost savings, which can make it difficult to manage the accounting workload
• Supply chain: Supply chain problems are forcing CFOs to find ways to streamline operations and find efficiencies
• Investing in technology: Many CFOs are turning to technology solutions to solve business problems, and CFOs must weigh the cost and the potential benefits of automation

Well, what about the pros and cons of outsourcing AP processing?

Outsourcing the AP department function has become an attractive option for businesses looking to manage costs, streamline operations, and to leverage technology solutions. Many of my peers have decided to outsource, but there are risks involved. This blog discusses the risks and opportunities of outsourcing accounts payable processing, provides insights into how CFOs can make informed decisions, and explains why Stampli is the ideal AP Automation solution. If you’re not familiar with Stampli, it’s an AI-powered Accounts Payable automation solution that brings all your AP-related communication, documentation, and workflows into one place.

Why businesses must control AP processing

Stampli believes that customers must maintain complete control and ownership over the invoice coding process, and that belief is supported by the economic and vertical trends that I’m seeing. 

I’m Lisa, the CFO of Treeline Furniture, a custom furniture manufacturing company. Treeline purchases raw materials (wood, metal, plastic, etc.) and manufactures furniture based on each customer’s specifications. 

We’re trying to decide if we should outsource AP processing. Prestige Accounting, who does a great job processing payroll for our back-office, has provided a bid to complete these tasks:

• Review all invoices and post the invoice details into the accounting system
• Compare invoice documents to purchase orders (POs) and shipping receipts 
• Code each invoice and post general ledger (GL) entries

The Prestige Accounting bid is 15% lower than our current AP processing costs, which will be good news for our owners. If we can lower costs, our pricing can be more competitive, and business cash flow will improve. Prestige will provide metrics on the number and dollar amount of invoices processed.

It’s no surprise that controlling labor cost is a significant economic trend, and outsourcing can be an attractive option to save on labor costs. 

But, we have some concerns.

Outsourcing can come at the expense of quality, since outsourced workers may not have the same level of expertise and training as in-house staff. 

Will the payable process work efficiently, or will we end up with more discrepancies in the data? Do outsourcing companies have proper controls to prevent payment fraud?

For example, Treeline has dozens of general ledger accounts that require the coder to have specific furniture manufacturing knowledge. If Prestige Accounting posts an expense to the wrong GL account, the income statement will be wrong, and Treeline won’t have accurate data to calculate profitability. 

We’d be worse off, not better off.

Prestige also needs to post activity into our ERP system, without generating duplicate payments.

One more thing: we’re thinking about expanding into international markets, so we can grow revenue. From what I can see, doing business abroad has its own set of problems…

Outsourcing to foreign countries can introduce additional risks such as language barriers, cultural differences, and time zone differences. Miscommunications may lead to incorrect coding, or slower invoice coding that delays preparation of the financial statements.

Our management team talked it over, and we determined that we can automate AP and still keep control by using Stampli.

Automate AP processing — and keep control

So, how does Stampli work for us?

Stampli’s AP Automation solution addresses the outsourcing risks related to labor costs, globalization, cybersecurity, industry-specific regulations, skills, and company culture.

Here’s how.

First, Stampli’s solution uses machine learning and AI to automate the invoice coding process, reducing the need for manual data entry and coding. This helps to reduce labor costs associated with outsourcing, while also improving accuracy and efficiency. 

Additionally, Stampli’s cloud-based solution allows for secure access from anywhere in the world, reducing the risks associated with outsourcing to foreign countries, such as language barriers and time zone differences.

If we want to do business in another country, we use Stampli. Problem solved.

What about data security?

Stampli’s solution is designed with security in mind, with features such as two-factor authentication, encrypted data transmission, and data backup and recovery, reducing cybersecurity risks associated with outsourcing. Stampli’s AP Automation solution can also be customized to meet the specific needs and requirements of different industries, ensuring compliance with industry-specific regulations and policies.

We plan on growing rapidly over the next five years, and Stampli can adapt to any changes we experience. 

Stampli’s solution is easy to learn and use, and with the help of Billy the Bot™, it automates nearly all of your manual tasks, including capture, coding, routing, fraud detection, and other manual tasks. This helps to ensure that the work is performed by staff who have the required skills and knowledge. 

The Stampli learning curve is minimal, which benefits our AP staff.

Additionally, Stampli’s solution is designed to be flexible and customizable, allowing companies to maintain complete control and ownership over the invoice coding process, ensuring that the work is performed by trained and experienced staff who are familiar with the company’s policies and procedures, culture, language, and secure systems and networks.

Bottom line?

Stampli’s AP Automation solution reduces outsourcing risks and improves invoice processing in several ways:

• Automates the invoice coding process 
• Improves processing accuracy and efficiency 
• Provides secure, cloud-based access
• Customizes data to meet specific industry regulations and policies
• Users maintain complete control and ownership over the invoice coding process 

Using Stampli gives me peace of mind, and it’s our solution to improve their AP workflow efficiency. I think they can solve your problems, too. You’ll find a number of case studies on the website that explain how Stampli can improve your business. Contact the great people at Stampli to find out more.