The Benefits of Best of Breed Accounts Payable

Accounts payable is a crucial function in any business that involves the management of all outstanding invoices, payments, and expenses. Many companies opt for a single supplier solution (Best of Suite) by bundling accounts payable, content management systems, ERP, etc. - but this may not always be the best approach.

A best-of-breed approach, on the other hand, involves selecting the best solution for each function or process within the organization. In the instance of accounts payable, this approach allows companies to optimize their processes by selecting the most suitable solution for each task, rather than relying on a single supplier for everything.

Why Best of Breed offers better performance

The best-of-breed approach offers higher performance because it involves selecting multiple vendors that specialize in a particular concentration. This means that companies can choose solutions that are specifically tailored to their needs and that are constantly being developed and improved by specialized providers. By focusing on one function, such as AP automation, these companies are able to create products that are designed to work seamlessly for their end-users, ensuring optimal performance.

While it may seem convenient to opt for a product or company that covers multiple different functions, it is important to note that their resources are spread thin and they may not excel in any one area. This may result in a smaller tech stack and potential cost savings, but it often comes at the expense of functionality and performance.

Source

Let's take a real-life example to understand the best-of-breed approach. Imagine you want to make sushi for dinner tonight, but you can't find the unique type of rice and ingredients required at your nearest grocery store. So, you settle for similar ingredients that are available. You then head to the corner of the store to buy fish, but the quality may not be fresh enough to eat raw. However, you buy it anyway, knowing you can cook it.

Although you accomplished your goal of making sushi, it's not exactly what you had in mind. You ended up with cooked fish sushi with non-authentic ingredients, not exactly something to brag about to your neighbors.

In a best-of-breed approach, you would go to an Asian market and find the correct rice and ingredients. Then you would head to the fish market to find the freshest fish possible. In the end, you have made the sushi you originally planned at the quality you were expecting. Something worth showing off to the neighbors about.

In the world of business technology, the same analogy holds true. A company that tries to specialize in multiple functions may offer convenience and cost-effectiveness, but it often falls short when it comes to delivering optimal outcomes.

On the other hand, a best-of-breed approach, such as selecting an AP Automation company and a different Content Management company, allows organizations to significantly improve the performance of each function. This approach may require more effort to select and integrate multiple solutions, but the benefits far outweigh the added effort.

Is the Best of Breed Approach right for your business?

It's important to note that while the best-of-breed approach offers optimal performance, it may not always be necessary. For example, if the business process is simple, automation or best-of-breed may not be needed. In the case of accounts payable, if a company is processing only 100 invoices a month, then the basic functionality of their ERP or another platform may be more convenient and sufficient for their needs.

However,  (as seen above) for more complex scenarios, such as processing over 10,000 invoices a month from thousands of suppliers with complex AP processes, a best-of-breed approach is necessary to help the business grow. Each business has different needs, but as a company grows, the need for specialized products to meet its needs typically grows as well.

Benefits of a best-of-breed approach to accounts payable:

Flexibility and customization

A best-of-breed approach allows companies to choose the best solution for each task or function, which means they can tailor their accounts payable process to their specific needs. This approach allows for more flexibility and customization, which is not always possible with a single-supplier solution.

Competitive advantage

By choosing the best solutions for each task, a company can gain a competitive advantage over those using a single supplier solution. They can optimize their accounts payable process, reduce costs, and improve efficiency, giving them a competitive edge in their industry.

In conclusion, a best-of-breed approach to accounts payable can provide many benefits for companies. This approach allows for more flexibility and customization, best-in-class solutions,, and competitive advantage. While selecting and integrating multiple solutions may require more effort, the benefits make it a worthwhile approach for optimizing the accounts payable process.