7 Best Practice Tips to Integrate AP Automation and ERP Systems
Published on:21 October 2024
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Is your accounts payable (AP) process holding you back?
Manual workflows are slowing you down, causing errors, and leading to missed opportunities for cost savings.
For mid-market companies, managing AP isn’t just about invoices. It’s about handling large volumes, multi-location operations, and staying compliant with strict regulations.
The solution?
An AP automation platform that integrates seamlessly with your Enterprise Resource Planning (ERP) system.
In this article, we’ll cover seven best practice tips to integrate AP automation and ERP systems to improve efficiency and drive long-term success.
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7 Best Practice Tips for AP and ERP Integration
1. Define Your Integration Goals
Before diving into implementation, it’s essential to set clear objectives.
Whether your focus is on faster invoice processing, fewer manual errors, or better financial reporting, defining measurable goals helps guide the integration process.
For mid-market companies processing over 20,000 invoices annually, one of the key objectives should be reducing the invoice approval cycle.
According to research, businesses that implement AP automation reduce their average invoice processing time from 45 days to just 3 days. This speed is essential for freeing up cash flow and reducing operational bottlenecks.
Questions to consider:
- What are your main pain points—slow approvals, manual errors, or lack of visibility?
- How do you define success after integrating AP automation with your ERP?
2. Ensure ERP Compatibility
Not all AP automation systems work seamlessly with every ERP.
In fact, one of the biggest challenges companies face is ERP integration with AP automation.
The AP automation platform you choose should integrate smoothly with your existing ERP, whether you’re using Sage, Microsoft Dynamics, NetSuite, or SAP.
A well-integrated system allows for seamless data transfer, and real-time synchronization, and minimizes the need for extensive manual workarounds.
Questions to consider:
- Does the AP solution integrate easily with your current ERP system?
- Is real-time synchronization possible for better transparency across locations?
3. Choose a Scalable Solution
As your company expands, your AP automation platform should scale with it.
Choose a platform that can handle increasing transaction volumes and additional locations, without needing costly upgrades or system overhauls.
One study by SAP and Esker found that automating AP processes can save businesses up to $16 per invoice. If your business handles thousands of invoices monthly, these savings can add up quickly as your company expands.
For example, a growing healthcare network may go from handling 20,000 invoices annually to 50,000 invoices. An AP platform with scalability can handle the increased load without slowing down.
4. Evaluate Automation Features
Automation is the core benefit of integrating AP systems with ERP software.
Evaluate the range of automation features the solution offers, such as automated invoice capture, three-way PO matching, fraud detection, and approval workflows.
Manual data entry during the invoice process is often the root cause of duplicate payments. This can result in costly mistakes.
These features save time, reduce errors, and improve financial oversight, particularly in industries like manufacturing and hospitality where complex workflows are common.
For example, a hospitality company can automate the matching of invoices, orders, and receipts, minimizing discrepancies and ensuring only valid invoices are paid.
5. Assess Vendor Support and Service Levels
Vendor support is critical to a successful integration.
Make sure the vendor has a track record of responsive customer service and provides strong support for ERP integration. Ongoing support is also essential for troubleshooting, updates, and ensuring smooth long-term operations.
Ask the vendor:
- What kind of post-integration support is offered?
- Are there case studies or references from mid-market businesses in similar industries?
Choosing a vendor with a strong support system ensures that your platform runs efficiently, without disrupting daily operations.
6. Focus on User Experience
Even the most powerful system can fail if it’s difficult to use.
A platform that has an intuitive user interface (UI) will reduce training time and increase productivity. Especially in industries like healthcare and manufacturing, where efficiency is critical.
Make sure that the platform simplifies workflows for all users, AP managers, and vendors. Features like mobile access, customizable dashboards, and clear reporting interfaces are essential for usability.
Curious to see what Rillion’s UI looks like?
Here’s the Active Invoices dashboard.
Looks good, doesn’t it?
7. Check Compliance and Security Standards
Security and compliance are non-negotiable.
Ensure the AP platform complies with industry regulations such as GDPR, SOC 1 & 2, or HIPAA and offers strong encryption and access control features to safeguard sensitive financial data.
Choosing a platform with strong compliance and security features helps mitigate these risks and protects sensitive financial data from breaches, which continue to increase each year.
For mid-market businesses, especially in healthcare and manufacturing, a non-compliant system can lead to hefty fines and reputational damage.
Look for AP automation tools that allow you to enforce role-based access, run audit trails, and maintain data integrity.
For example, a healthcare provider integrates AP automation with their ERP system, ensuring that patient and financial records remain secure while complying with HIPAA and other healthcare regulations.
Read also: What is HIPAA
3 Mistakes to Avoid When Integrating AP Automation and ERP Systems
While these tips help guide you toward a successful integration, it’s important to avoid common mistakes that could derail the project.
Here are three pitfalls to watch out for.
1. Failing to Involve Key Stakeholders Early On
Integration projects can fail when finance, IT, and operations teams are not aligned from the start. Without coordination, the AP automation platform may not meet everyone’s needs, leading to under-used features or post-launch frustrations.
How to avoid it:
- Involve cross-functional teams from finance, IT, and operations early in the decision-making process.
- Ensure that each team’s requirements are taken into account during vendor selection and implementation.
2. Overlooking Change Management
Implementing new systems involves more than just technical integration.
Teams need to be prepared for new workflows, and employees need to understand the benefits of AP automation and ERP integration. Without change management, adoption may be slow or met with resistance.
How to avoid it:
- Provide comprehensive training and emphasize the benefits of the new system.
- Maintain open communication channels to address concerns during the transition.
3. Ignoring System Performance During Peak Times
Many mid-market businesses experience seasonal spikes in transaction volumes, such as year-end in healthcare or peak seasons in hospitality.
Not stress-testing the system during these periods could result in delays or system crashes, affecting vendor payments and invoice approvals.
How to avoid it:
- Stress-test the system before full implementation to ensure it can handle peak volumes.
- Ensure your solution can scale up during peak times without requiring significant downtime.
Conclusion
Choosing the right AP automation platform for ERP integration is a strategic move for mid-market businesses in healthcare, manufacturing, and hospitality.
By defining clear objectives, ensuring ERP compatibility, and prioritizing scalability, you’ll be able to select a solution that grows with your business.
Factors like automation features, vendor support, user experience, and compliance are critical to ensuring a successful, long-term integration.
Following these best practice tips to integrate AP automation and ERP system will not only reduce manual errors and improve processing speeds but also set itself up for sustained growth and operational efficiency.
Ready for a seamless integration with Rillion?
Rillion integrates seamlessly with popular ERP systems like SAP, Microsoft Dynamics, and Sage X3, making the transition to AP automation smoother than ever.
Book a demo today to see what we can do for you.
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