ARTICLE

Accounts Payable Automation in SAP Environments

3 Questions for an Industry Analyst

based invoice processing solutions provides another deployment option for

Mark Brousseau

mid-sized users of SAP ERP platforms. It is for this reason that one-third of

Mark Brousseau, editor of special projects for the Institute

businesses will have a cloud-based invoice processing solution within two

of Finance & Management, discusses how accounts

years, IFO says.

payable automation addresses the most pressing

business challenges SAP users face.

#2: Visibility into the Business

The second trend is that businesses are automating accounts payable

Q: Which trends in finance are most

impacting SAP accounts payable
environments today?

processes to facilitate real-time decision-making. Todays increasingly

competitive global business environment requires businesses to make
strategic and tactical decisions faster than ever. This dynamic requires
more precision and efficiency in how decision-makers access and manage
financial information. In fact:

A: Three trends are fundamentally reshaping accounts payable processes

across all businesses:

#1: Cloud Deployment

40 percent of businesses surveyed by Ardent Partners

said that improving accounts payable reporting and
analytics is their top priority.

The first trend is that more businesses are moving invoice processing to the
cloud. Businesses are embracing cloud computing as a way to automate
their operations without the up-front capital expense, in-house maintenance,

By tightly integrating an automated invoice processing solution with an ERP

software and hardware requirements, or risk of traditional on premise

platform, decision-makers achieve a 360-degree view of their operational

software. Implementing a cloud-based solution also enables businesses to

and financial data, including:

extend the value of their ERP investments more quickly than in the past.
Operational metrics
Cloud-based accounts payable solutions deliver the same features and

Aggregated data for cash forecasting and working capital management

functionality of on premise software, and can be customized to a users

Corporate spending and compliance with supplier contracts

needs. For instance, cloud-based solutions provide users with the ability

Budget variance analysis and expense analysis by vendor

to perform payables functions such as invoice scanning, data capture,

validation and approval. Cloud-based invoice processing solutions also

The enhanced visibility that results from the integration of an automated

address the challenge of remote work. And these cloud-based solutions can

accounts payable platform with SAP helps businesses streamline invoice

be integrated with existing on premise ERP solutions, such as those from

processing through the automatic validation of invoices against ERP data,

SAP, creating a hybrid operations environment. The emergence of cloud-

faster resolution of exceptions, and streamlined training of front-line users.

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Enhanced visibility also helps businesses control Cash Conversion Cycles,

Days Payables Outstanding and Days Sales Outstanding, more easily
aggregate spend calculations, more quickly identify budget variances or
maverick spending, and gain leverage for contract negotiations.

#3: Intelligent Data Capture

The third trend is that more accounts payable departments are deploying
intelligent data capture solutions to automate the import, extraction,
validation, routing, and archival of data from invoices and other accounts
payable documents. This technology should not be confused with basic
document scanning. Intelligent data capture solutions import and classify
paper and electronic documents from any delivery stream (e.g. mail, fax,
email), extract header and line-item data based on preconfigured business
rules, validate the data, match and link all documents related to a specific
transaction, and seamlessly post approved invoices to SAP or any ERP
or general ledger system. Invoices that require approval are automatically
routed based on defined rules. These capabilities enable accounts payable
departments that use SAP to reduce transaction costs, accelerate the
delivery of usable data to SAP, reduce invoice approval cycle times, and
decrease errors.

Not surprisingly, 27 percent of businesses plan to

deploy automated data capture and workflow for
invoice approval, IOFM reports.

Q: What impact are these trends having on

SAP users?
A: The trends in accounts payable automation will have big ramifications

Q: What is the most important piece of advice

for accounts payable leaders who use SAP?
A: Keep the strategic benefits of accounts payable technology in mind when
developing a business case for automation. Accounts payable leaders are
well aware that accounts payable solutions such as intelligent data capture
deliver tremendous tactical benefits, particularly in terms of reducing costs
(60 percent or more!), but technologies such as intelligent data capture
also deliver huge strategic benefits across the enterprise, including: fewer
errors, decreased warehouse charges, improved Days Payable Outstanding
(DPO), better cash position, reduced borrowing, improved supplier relations,
increased margins, and higher earnings per share. The real-time visibility
provided by intelligent data capture, for example, enables businesses to
manage their working capital with greater accuracy and control.
Automation also provides the visibility businesses need to capture more
discounts, and maximize returns. Additionally, the technology helps ensure
budget and contract compliance by allowing businesses to set rules for
price and quantity tolerances during invoice processing. And automation
ensures that businesses have ready access to the accurate and complete
information they need for planning, forecasting, and decision-making. These
benefits can have a major impact on a companys bottom line:

Studies show that every day of DPO extension yields

more than $25 million in cash for a Fortune 500
company; every billion dollars of spend yields over
$400,000 in discounts per month; and more than
50 percent of supplier financing yields more than 30
percent annualized rate of return.

in the payback businesses receive from their ERP investments. New

technologies, changing business needs, and tight capital budgets are

So dont sell the strategic benefits of accounts payable automation short!

bringing rise to what Gartner calls the postmodern ERP: an ERP strategy
that integrates existing investments in an ERP with third-party operational
business capabilities such as accounts payable automation. This approach
offers greater agility and flexibility to satisfy business needs compared to
monolithic ERP approaches that depend heavily on expensive customization.
Many businesses already have migrated to an environment where third-party
applications work in concert with an existing ERP platform, such as SAP.
Integrating an invoice processing solutionsuch as a cloud-based solution
that automates data capture, workflow processing, and cloud archival
with an SAP ERP platform complements the ERP to dramatically increase
its business benefit. It also reduces the time, cost, risk, and complexity

About TIS
Top Image Systems (TIS) helps businesses compete in the digital economy, where
the customer journey begins, progresses and ends in an entirely digital environment. In
finance, this means transforming paper-based, manual processes to end-to-end automated
processes that work the way you doon premise, in the cloud and via mobileinside of
SAP. 2016. Top Image Systems.All rights reserved.

required for deploying applications. As a result, more accounts payable

departments will integrate third-party applications with their SAP platform.

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