How to Build a Winning AP Automation Business Case: A Step-By-Step Guide

If your finance team is looking to do more with less and kick up operations a notch, then AP automation should be a top priority for 2024. It’s the ultimate sidekick for finance teams, helping AP staff process invoices at warp speed, reduce errors, and slash costs.

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Already know the ins-and-outs of AP automation but not sure how to convince leadership to get on board? You’ve come to the right place. Building a business case for AP automation is the secret sauce to convincing decision-makers that AP automation is a worthwhile investment, and this blog is here to walk you through how to do exactly that.

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5 Key Components of a Stellar AP Automation Business Case

Imagine your AP automation business case as a treasure map. It can lead to a vault of efficiency and savings. But in order to reach this financial nirvana, you need a well-crafted plan. Here are five components to turn your business case into a roadmap for success.

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1. Strategic Goals

Clearly define how automation aligns with your business goals. Whether it's speeding up work, reducing errors, or fostering better vendor relationships, tie every goal back to the bigger picture. This demonstrates to business leaders that AP automation is not just a tactical fix but a valuable investment with long-term benefits for the entire company.

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2. Budget and Cost-Benefit Analysis

Break down the costs of AP automation and compare them with its projected benefits. By show tangible returns on your automation efforts, you’re more likely to secure buy-in from leaders.

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3. Risk Assessment

Proactively address potential hurdles, from integration glitches to internal resistance from the team. Craft backup plans and strategies for each identified risk to prove to your leadership team that you can tackle any challenges that arise on your AP automation journey. This can reassure stakeholders and ensure smoother sailing towards automation.

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4. Stakeholder Involvement

Find key stakeholders, from executives to end-users, and involve them early and often. Address concerns, gather input, and turn skeptics into believers. This is key because stakeholders not only provide valuable insights but can also become strong project advocates, smoothing the AP automation adoption process.

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5. Project Timeline

Outline a realistic and structured timeline for implementing AP automation. From initial planning to full-scale deployment, a clear timeline will keep your project on course and expectations in check. A well-defined timeline provides a clear and detailed roadmap, holding everyone accountable to the same project milestones and deadlines.

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How to Set Your Strategic Goals for AP Automation

Before building out your AP automation business case, it’s important to define goals. In other words, what do you want AP automation to help your team achieve? For example, is your team looking for more:

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Cost Savings. If you’re looking to minimize costs, then highlight how automation can slash processing costs by reducing manual labor and minimizing the need for physical storage to free up resources.

Process Efficiency. Teams that want to make efficiency gains can use AP automation to automate mundane, repetitive tasks and streamline their overall workflow. It also ensures that you’re consistently processing invoices and approvals at lightning speed.

Error Reduction. Need to minimize mistakes like late and duplicate payments? AP automation brings a precision scalpel to your financial processes, flagging any invoices that have mistakes or discrepancies.

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Tie Back to Organizational Goals

Your AP automation goals should be more than just standalone achievements, and integrate with broader business goals. Consider the following scenarios:

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Cost-Cutting Mandate: If your company’s focus is on cutting costs, emphasize AP automation's prowess in delivering cost savings.

Growth Phase Initiatives: In the midst of a growth phase, where expansion is the name of the game? Underscore how AP automation can scale operations.

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By tying back AP automation’s benefits to overarching business goals, you can demonstrate the this finance platform will benefit the entire business.

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How to Build a Budget and Cost-Benefit Analysis

Let's explore how to estimate the budget and conduct a cost-benefit analysis for AP automation.

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Budget Estimation: Begin by identifying the costs of implementing an AP automation. This can vary depending on a wide range of factors such as your AP automation partner, accounting system, monthly invoice volume, number of users, etc.

ROI Calculation: Calculate how much you expect to save or earn through AP automation. You can then compare it against the total investment. Not sure how to calculate ROI? Many partners can help you estimate these costs. Alternatively, you can look for AP automation case studies that highlight teams in your industry and use those stats as a rough estimate.

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How to Conduct a Risk Assessment

Like everything else in business, financial operations come with risks that we must work to avoid. Make sure to call out in your business case how AP automation helps mitigate the following issues.

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Human Error:

Explanation: Manual AP workflows are a playground for human error. This includes everything from data entry blunders to the infamous vanishing invoice act. These mistakes can snowball into costly errors, late payments, and disgruntled vendors.

AP Automation Mitigation: Automation takes the reins, minimizing manual input. It can automatically capture invoice data and process payments with the precision of a surgeon.

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Fraud Risk and Compliance Issues:

Explanation: Most manual processes are highly susceptible to fraud, leaving your team vulnerable to attacks.

AP Automation Mitigation: AP automation comes equipped with controls and enables crystal clear audit trails. It not only beefs up security but plays detective, sniffing out duplicate invoices and raising red flags when it comes across suspicious transactions.

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Inefficient Cash Flow Management:

Explanation: Manual AP can lead to delayed invoice processing, throwing a wrench in your cash flow management.

AP Automation Mitigation: AP automation makes timely and efficient invoice processing the norm. Automated systems can schedule payments to help your team improve cash flow and capitalize on early payment discounts.

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How to Outline Stakeholder Involvement

Embarking on the AP automation journey is not a solo act. Instead, it's a symphony requiring harmony among various stakeholders:

Finance Team: Their firsthand experience makes them invaluable contributors to the automation process.

IT Department: The tech maestros can ensure seamless integration. Their involvement is critical for system compatibility, security, and troubleshooting.

End Users: Involving end users early and addressing their concerns ensures smooth adoption.

Vendors and Suppliers: Including stakeholders beyond your walls can help with transitioning to electronic invoicing.

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How to Get Buy-In from Senior Management

Speak Their Language: Craft a compelling story that aligns with overall business goals.

Highlight ROI: Paint a vivid picture of the return on investment. Show not only the potential cost savings but also the long-term business benefits.

Address Concerns Proactively: Anticipate questions and concerns. Be prepared to address issues related to implementation, disruptions, and the overall impact on the business.

Pilot Programs: Consider starting with a pilot program. This allows senior management to see results before committing to a full-scale program.

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How to Establish a Project Timeline

Let's unravel the steps to set the perfect rhythm for your project timeline. This can ensure each note plays in harmony and automation becomes a well-conducted masterpiece.

Needs Assessment: Begin by understanding your unique business needs. Identify pain points, priorities, and the urgency for AP automation.

AP Automation Provider Consultation: Work closely with your chosen AP automation provider to estimate a timeline.

Consider External Factors: Acknowledge external factors that might influence the timeline, such as regulations or seasonal work.

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Gathering Evidence to Support Your AP Automation Business Case

Before you pitch the AP automation dream, let's fortify your business case with numbers, real-life stories, and industry insights. It's time to turn skeptics into believers.

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Internal Data - The Numbers That Speak Louder Than Words

Estimated Cost to Process Invoices: Crunch the numbers to reveal the true cost of manual invoice processing for your business.

Days Payable Outstanding: Show the impact on cash flow management.

Number of Duplicate Invoices Paid Yearly: Expose the financial risks lurking in the shadows. Show the potential losses and how AP automation can act as a safe gatekeeper.

Number of Mistakes Made on Average per Month: Show the number of mistakes made monthly. This can reinforce the need for a more reliable solution.

Time Spent by Staff on Manual AP Processes per Day: Illustrate the daily hours devoted to manual tasks. This shows the opportunity cost and makes a compelling case for efficiency gains.

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Case Studies - Real Stories, Real Impact

Dive into success stories that mirror business goals. Successful case studies like those of our client Synergy provide concrete evidence of the power of AP automation. Erdman Holdings, whose AP team now saves 20 hours a week thanks to AP automation, is another great case study that provides a trove of inspiration and validation for your business case.

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How to Handle Objections

Now that you’ve learned the foundation of a strong AP automation business case, let's address the common resistance points so you can steer your AP automation ship through these conversation points if they arise.

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Cost of Implementation and Maintenance

Initial Investment: Address worries about the upfront costs of AP automation software by showing a detailed breakdown of long-term savings.

Ongoing Costs: Highlight how costs are outweighed by the continuous benefits of a streamlined workflow and error reduction.

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Integration Challenges with Existing Systems

Compatibility: Ease concerns about integration by showing the compatibility features of modern AP automation.

Complexities and Disruptions: Address concerns about potential disruptions during integration.

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Resistance to Change from Staff

Job Displacement: Show how automation aims to enhance their roles, allowing them to focus on higher-value tasks.

Learning Curve: Address concerns about the learning curve by outlining training programs and ongoing support.

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Data Security and Privacy Concerns

Security Worries: Tackle concerns about data security by showing the security features of reputable AP automation solutions.

Compliance Uncertainty: Address worries about compliance by showing how automation systems adhere to data protection regulations.

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Doubts About ROI and Effectiveness

ROI Skepticism: Alleviate doubts about ROI with concrete data from similar businesses that have cost savings through AP automation.

Task Complexity: Address concerns about handling the complexity of AP tasks. Show how automation systems can handle diverse tasks and adapt to specific needs.

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Conclusion

In conclusion, building a business case for AP automation is not merely a procedural task but a strategic move towards transforming your organization's financial operations.

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By carefully considering strategic goals, budgeting and cost-benefit analysis, risk assessment, stakeholder involvement, and a realistic project timeline, you can craft a compelling narrative that demonstrates the tangible benefits of AP automation.

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This is about more than just keeping pace with technological advancements; it's about embracing a solution that streamlines processes, cuts costs, enhances accuracy, and ultimately fosters a more dynamic and efficient finance team.

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As you embark on this journey, remember that the strength of your business case lies in its ability to align with your organization's broader objectives and articulate a clear vision of a more agile and resilient financial future.

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