AP invoice automation
Best practice


Your 3 Step Guide to Building a Solid Business Case for AP Automation

Accounts payable is often (incorrectly) thought of as a back office function—a bogged down team that is constantly putting out fires. However, if you’ve spent any part of your career working with AP, you know that the value the accounts payable team contributes goes far beyond that endless backlog of vendor payments. The information processed by AP is the center of your company’s reporting and forecasting. And ultimately, its financial success.

 AP’s unique position within the company brings with it a myriad of challenges – error-prone manual and paper-based processes, lack of visibility and ultimately fuzzy financials and inaccurate forecasting to name a few.

Building a Business Case in 3 Steps

If you’ve landed on this blog post, you’re probably already aware of the numerous accounts payable automation benefits; that’s why you’re looking for information to help build an AP automation business case! The challenges listed above are signals that an accounts payable process desperately needs automation. While you may realize that already, the trick to building a surefire business case is clearly outlining the facts, fine-tuning your messaging, and getting the right audience to understand how to improve the accounts payable process with an AP automation project.  

Step One: Do Your Research

This one may seem obvious, but the parameters of your research is what’s important to stress here. Before you even begin assessing vendors, it’s important to scope your project. There are several different types of solutions, and the impact on your business varies between each type. While all solutions have their unique benefits, it’s essential to select the right tool that your company will benefit from most, currently. Implementing a supplier portal or dynamic discounting platform may seem like it’ll help you save money down the road, but if your internal AP processes are still a mess, the benefits will hardly be realized.

Once you know the type of solution you’re pursuing a project for, you need to assess the various providers available on the market. Before reaching out to any, do a thorough “background check” on the vendors. What is their history and focus? Does the solution fulfill the needs you’ve outlined in your project scope? What is their reputation like in the industry? And, when you do engage with the vendors that match your criteria, don’t be afraid to ask tough questions. What is their speed of deployment like? What is the depth of the solution’s effectiveness?

Step Two: Know Your Audience

With the right research in your back pocket, it’s time to start thinking of the presentation. First things first, define who your key stakeholders are. With large projects, the decision-making party can sometimes grow to include too many people, which can draw out, delay, or ultimately kill a project altogether. Keep your decision-maker party small. In most companies, the key project holders are executive management and information technology (IT).

For business executives, mainly the CFO, you’re trying to make the financial case. Your presentation should support a credible ROI, low risks, and address the “why” for finance (spend management, reporting accuracy, operational efficiency etc).

For IT, the messaging is different. You want to reassure IT that you won’t be tying up IT resources with a lengthy project and on-going maintenance. Plus, if your project can free up IT resources for core business projects and eliminate the need for old, outdated systems in place, your proposal suddenly looks even more desirable.

But before approaching executive management or IT, rally the support of the AP and Procurement teams. They’re the ultimate end users, so having them on board will help keep the project afloat from start to implementation. In your vendor selection process, keep in mind the tool’s usability; the AP team is far more likely to be on board with a product that’s easy to use in their day-to-day activities.

Discover more talking points for your key stakeholders by watching our on-demand webinar: Build an AP automation business case that will sweep the C-suite off their feet

Step Three: Build a Credible and Strong ROI

The point of investing in a financial technology like AP automation is to prove that your investment will break even with the original cost and eventually save the company money over time. With the right numbers to crunch, you’ll know exactly how to calculate an accounts payable project ROI that is rock solid.

Start with calculating the total costs of the project and ongoing ownership of the solution. That includes subscription/license costs, upgrades, maintenance, and support from any third parties involved.

Next, quantify the unknown costs; this could include product limitations and on premise upgrades. You might not be able to predict the future, but a potential vendor should be willing to help fill in the gaps of costs that aren’t clearly defined in a contract. 

Next, quantify the savings. This includes both hard, quantifiable savings (headcount, removal of old systems, elimination of errors, early payment discounts etc.), as well as the soft, yet substantial savings (time saved for approvers, improved price variance management).

Once you have the numbers to crunch, your next step is to organize and demonstrate the math of your ROI calculation in a clear and tangible method. Clearly outline the costs, savings, and timelines that you researched. If possible, use an ROI template that has been used in other AP automation projects and delivered proven, credible ROIs (PS: Ask us for a free personalized ROI review with our tried and true calculator!). The key is to calculate an ROI with numbers you can stand by; show your math so that any of the stakeholders could walk through your process and calculate the same results.

So there you have it: You now have the framework for building an AP automation business case that deserves a standing ovation. Need a partner in making the case to your organization’s stakeholders? MediusFlow currently supports 2,000 customers around the globe processing a total of 52 million invoices annually. The customer base includes brands such as Marc Jacobs, Toyota, Cineplex Entertainment, Stadium, Fenix Outdoor, Elekta and Intersport. Get in touch with us to learn more and start your AP Automation project today!

Dmitri Krasik

Dmitri Krasik

VP Sales - North America