You Have an ERP System. So Why Do You Need AP Automation Software?

Enterprise Resource Planning (ERP) systems are powerful applications that do a great job of managing structured data, which is why many companies invest in ERPs. Implementing and maintaining an ERP is expensive and time consuming, but there are some tasks that an ERP may not be able to automate. Stampli’s AP Automation software brings together accounts payable communication and documentation all in one place, and integrates with many ERP systems.

The time and expense required to implement an ERP system depends on a number of factors.

Implementing an ERP system

This 2022 ERP Report provides some useful information regarding ERPs. These statistics vary, depending on the size of a business:

• The typical timeline to choose an ERP system is 17 weeks.
• The top reason for implementing an ERP is to support company growth. For companies with over 500 employees, the top reason is to replace an outdated legacy system.
• You can expect to spend about $9,000 per user to purchase and implement an ERP system.
• On average, 26% of company employees use the ERP system.

The “must-have” requirements for most companies are accounting, inventory management, purchasing, sales, and distribution. One benefit of an ERP is the system’s ability to fully automated tasks that have a definite structure, or tasks that follow a standard set of rules. As this podcast episode explains, proper planning allows you to operate an efficient accounting department.

How an ERP Automates Payroll

Payroll is often the most complex accounting task that a business must perform, and ERP automation can sharply reduce processing time and the rate of error. Here are some of the steps required to complete payroll:

• Use the company time card system to calculate the total hours worked for each hourly employee. Determine if any of the hours worked are overtime hours.

• Calculate the gross pay for each full-time employee, based on the annual salary and the number of pay periods for the year.

• Determine federal tax withholdings using information from each employee’s Form W-4.

Each of these tasks follows a predetermined set of rules. There is a source for the data and rules that determine how the data is used. For example, the hours on the time card are multiplied by the appropriate hourly rate to determine gross pay.

ERPs can manage thousands of these calculations, which allows the business to add employees and grow using the same ERP system. The challenge for growing companies is to automate tasks that are less structured, including invoice automation. 

The Challenge of AP Automation

The rules to code an invoice, post an expense to the general ledger, or to approve an invoice may differ, depending on a number of variables. These variables make it difficult to standardize the invoice process in an ERP system. 

Invoice formats differ

Each type of vendor invoice may be different, and some invoices provide more data than others. To manually input the company name, address, dollar amount, and the items purchased into accounts payable, the AP staff must spend time finding the right data on each invoice.

General ledger account coding

Your chart of accounts may include hundreds of expense accounts, and coding the correct expense account for an invoice is challenging. The AP staff must consider the vendor, the items purchased, and how similar purchases have been handled in the past

Determining how invoices are approved

A business may direct invoice approvals to managers based on the type of purchase, and the dollar amount of the spending. The approver may need to view purchase order data (if a PO was generated), and review verification that the product or service was received. Larger purchases typically require multiple levels of approval, and data must be passed from one approver to another.

The AP team, purchasers, and approvers need to communicate with each other as an invoice is processed. If the communication is not centralized in one location, communication breaks down, and data can get lost. This extends the time required to approve an invoice, which may result in late payments to vendors.

Stampli solves the problems of AP Automation, and integrates with many ERP systems.

The end-to-end platform gives you full control and visibility over all your corporate spending from cards to invoices to payments – all in one place. 

Stampli: The AP Automation Solution

Stampli’s AP Automation addresses each of the invoice processing challenges discussed above. The software is easy to navigate, and non-finance professionals can quickly learn how to use the system for invoice approvals.

Using AI for invoices, expense coding, and approvals

Stampli’s artificial intelligence (AI) technology, Billy the Bot, learns an organization’s unique patterns to simplify GL-coding, automate approval notifications, identify duplicates, and more. The AI functionality provides auto-suggestions for general ledger accounts, and approvers. 

A central communication hub

The communications hub provides the invoice data, all questions and answers regarding an invoice, and access to supporting documentation on one screen.

By centering communications on top of the invoice itself, AP departments collaborate and communicate better with approvers, vendors, and any stakeholders involved with purchases. With Stampli, the approval process moves much faster. 

Stampli’s automation can help with unusual transactions, including a partial shipment of goods. AP Automation will also speed up the year-end closing process.

Automating accounts payable in this way gives users visibility into bill activities, statuses, and ownership with greater transparency and accountability. Audit-ready histories of approved bills are stored in the system, and invoices can be assessed anytime.

Reduce labor costs and error rates

As these case studies explain, Stampli customers are able to reduce the labor costs required to code invoices and to obtain invoice approval. Automation also reduces the risk of error, and you can avoid approval bottlenecks that delay invoice payments. The reduction in labor costs is far higher than the cost of AP Automation software.

Integrate Stampli into your ERP system, and take control over invoices and bill processing with smart, intuitive, and actionable AP Automation. Don’t just manage spend, control it with Stampli.