Accounts payable (AP) automation has the potential to revolutionize financial operations, driving efficiency, accuracy, and cost savings. However, despite the many advantages of automating AP processes, not all implementations are successful. Several factors can cause AP automation solutions to fail or fall short of expectations. Understanding these common challenges can help organizations avoid costly mistakes and ensure a smoother, more effective transition to automated AP.
Key Takeaways (TL;DR):
- AP Automation is powerful and extremely beneficial for companies of all industries and sizes when the right provider is chosen.
- Companies with low complexity may get by with a simpler technology option, but high complexity, unique processes, and variation in data types and formats requires a more robust automation platform like Ascend AP
- Understanding what type of support your AP automation provider may offer - both in the implementation process and beyond - is key to ensuring a positive accounts payable team experience. Ask about customization opportunities and who will manage those upfront.
- Not all technology boasting 'AP Automation' is the same. Understand the differences between efficiency and automation before determining what your business needs.
Lack of Proper Integration with Existing Systems
One of the biggest challenges organizations face when implementing AP automation is the integration of the new system with existing software tools, such as Enterprise Resource Planning (ERP) systems, financial software, or procurement platforms. Many businesses have legacy systems that are incompatible with modern automation solutions, and if the automation tool cannot seamlessly connect with these platforms, it creates data silos and operational inefficiencies.
Without proper integration, invoice data may need to be manually entered into multiple systems, negating the time-saving benefits of automation. This disjointed approach can lead to delays, errors, and frustration, ultimately undermining the success of the automation initiative.
Ascend AP is a certified Workday partner, ensuring a seamless transition between the two platforms as well as accurate reporting and strong visibility throughout the process. Ascend was built specifically for Workday, so companies have a faster, smoother implementation from Day 1.
Poor Data Quality and Inconsistent Formats
AP automation systems rely heavily on accurate data for processing invoices, capturing payment terms, and matching records. Some systems are built for specific use cases, where invoices are clean and straightforward. If your company's invoices are often inconsistent, unstructured, or incomplete, ensure you're evaluating a system that can handle all formats and can predict line items, not just recognize them.
Free or low cost solutions often rely solely on Optical Character Recognition technology that has limitations in invoice formats and finding correct header and line item data. Make sure your RFP process reflects this by taking a sample of your company's most complex invoices and asking the platform provider to demonstrate how it performs.
Inadequate Process Design and Workflow Mapping
In some cases, organizations implement AP automation without carefully considering their existing AP workflows or processes. If an organization has poorly defined or overly complicated approval chains, a lack of clear roles and responsibilities, or inconsistent procedures across departments, automation can exacerbate these issues instead of resolving them.
Before implementing automation, it’s crucial to map out current workflows, identify inefficiencies or bottlenecks, and design a streamlined process that can be automated. Failing to do so means the automation tool may simply mirror existing inefficiencies, which can lead to frustration and failure to realize the full benefits of the technology.
Work with an AP automation provider like Ascend who has consultants across various industries to help identify and optimize current workflows so automation is successful from the start. Ensure that the organization has the right customer support team in place to continue that optimization post-implementation.
Choosing the Wrong Automation Solution
Not all AP automation solutions are created equal, and the wrong choice of software can lead to failure. Sometimes, organizations select a system that doesn’t meet their specific needs, lacks key functionality, or is overly complicated for their size or level of sophistication. Some solutions are better suited for large enterprises with complex needs, while others may be more appropriate for smaller businesses or less complex environments.
Additionally, some automation solutions like Ascend AP, are highly customizable, which allows the platform to take on challenges beyond a typical workflow. Asking in your evaluation process what the implementation team handles and what they recommend allows for greater chance of success up front.
To ensure success, CFOs and AP leaders should carefully evaluate the features, scalability, and integration capabilities of various solutions before making a decision. They should also consider future growth and whether the chosen platform can evolve with the organization’s needs.
Overlooking Vendor and Supplier Engagement
AP automation requires engagement with external vendors and suppliers, who many organizations assume will easily adjust to new systems, but this isn’t always the case.
Organizations should choose an AP Automation provider that proactively works across a large span of vendors and formats and is used to managed millions of invoices so that the burden of monitoring and managing processes is already taken care of. These vendors, like Ascend, also build for regulatory changes like global e-invoicing mandates so your company is prepared and pro-actively addressing updates.
Overestimating the Capabilities of Automation
While AP automation can handle many tasks, it is not a one-size-fits-all solution. Some businesses have overly ambitious expectations, believing that automation will eliminate all manual intervention or resolve every issue in their AP process. In reality, AP automation still requires human oversight—especially when it comes to exceptions, approvals, or complex invoices that don’t fit standard workflows.
It’s important to understand that automation can significantly improve efficiency and accuracy, but it does not replace the need for thoughtful oversight and intervention when necessary.
Conclusion
AP automation has the potential to significantly improve financial operations, but its success hinges on careful planning, thorough integration, and continuous support. By addressing common pitfalls—such as poor system integration, inadequate adoption, and resistance to change—organizations can set themselves up for a successful implementation that leads to greater efficiency, reduced costs, and better decision-making. Recognizing the challenges ahead and taking a thoughtful, strategic approach will help ensure that AP automation delivers on its promises.
