Next Gen Apps for Finance: Adding teeth to ERP

Business enterprises across the globe are embracing digital transformation for key business operations such as finance, marketing, and HR (human resources). The digitization market, which was valued at $469.8 billion in 2020, is expected to be valued at a whopping $1009.8 billion by 2025. Easy access to the internet, disruption in business operations due to the pandemic, and many such factors have made business owners cognizant of the value that digital transformation brings.

As a business enterprise, you probably already have an ERP system to manage your financial processes. But is ERP alone enough to streamline all finance functions?  While ERP simplifies workflows and streamlines business back-end operations, there still exists huge gaps in most ERP systems when it comes to functions such as the accounts payable process. Even the most mature ERP solutions lack built-in AP automation capabilities that a spend management suite like Expenzing offers. 

Enhancing ERP with AP automation software

An ERP system captures expenses in the system and shows its immediate impact on all the departments. It offers a robust reporting mechanism however this alone is not sufficient. ERP fails to give the granular visibility that an AP automation software does.

• The processes that happen before an invoice hits the system or a transaction occurs are not captured by ERP. 
• Reports generated by ERP are not real-time because reporting in ERP is dependent on when an invoice is received and entered into the system. Manually putting invoice details in the ERP system is time-consuming, more so when they come in bulk. Invoices do not come at a steady pace leading to a data lag of days, weeks, or even months. 

• ERP does not give a clear picture of the amount you need to set aside for payments and the exact outstanding payments in real-time. As a result,  driving sustainable growth or cutting down costs becomes a challenge for most organizations. 

An AP automation software is like a complementary or added layer to the ERP system. It integrates with your existing ERP system to provide:

• Financial decision makers a holistic view of finances
• Eliminate unnecessary paperwork and dependency on e-mail approvals
• Has an in-built control mechanism to match received invoices with purchase orders and goods received notes ensuring due diligence and only sending correct invoices for authorization
• Automates recurring payments like electricity charges, phone bills, internet charges, etc. and reduces the overall payment cycle time
• Gives visibility into bill activities, statuses, and ownership with greater transparency and accountability. 
• Stores invoices and audit-ready histories of approved bills in the system which can be assessed anytime.
• Analyzes spending patterns in real-time to help enterprises identify areas where spending can be controlled.

As enterprises take baby steps towards economic recovery and explore new growth avenues, bridging the reporting gap on cash flow status is critical. By adding AP automation to ERP enterprises get complete and timely visibility into organization spend. To summarize, by layering your ERP with an AP automation software you can get access to:

• Fair and transparent record-keeping
• End-to-end process management
• Automated payment system
• Accurate invoices
• Built-in controls for due diligence
• Real-time financial reports
• Optimized spend management
• Mindful procurement
• Efficient and robust financial processes

Integrating your ERP with AP automation software

The market is flooded with a plethora of AP automation software solutions, however, not all of them are compatible with ERP systems. Choosing an AP automation software that can integrate with your existing ERP system is important for seamless function and to make the most of both. The integration process varies from one service provider to the other. Usually, the automation software is installed on a company’s server and in-depth training is provided to the team to get comfortable with the system.

Closing thoughts

When an organization implements an ERP system, they primarily want to address two major pain points time and manpower. Automating AP helps them address these more effectively. ERP is a great start and a must-have for industries like manufacturing, trading, etc. however, implementing an AP automation solution takes ERP to the next level by giving organizations visibility into spending even before it hits the ERP system.