Buying AP Automation Software: How to Evaluate and Choose a Vendor

Choosing the right AP automation software has always been a critical decision for organizations, but the rise of AI-powered solutions has added a new layer of complexity to the buying process. With AI capabilities transforming how data is processed and workflows are optimized, it's more important than ever to ensure that the software you select aligns with your unique business needs. The first step in this journey is identifying your requirements — this sets the foundation for evaluating solutions that do and do not incorporate cutting-edge AI features. Below, we outline 10 key considerations to help you document your AP automation needs and navigate the evolving vendor landscape.

The software selection process 

Step 1: Identify unique requirements

Here are 10 critical considerations for documenting your AP automation needs:

1. Process analysis: Map your current invoice workflow process from end-to-end to pinpoint bottlenecks and specific areas of friction to calculate inefficiencies.

2. Goal setting: Define the specific, quantifiable objectives for new software that support your company's broader strategy. Ensure alignment with KPIs and priority growth initiatives.

3. Volume assessment: Evaluate your present and future invoice processing volume requirements, including diverse format requirements and other unique specifications.

4. Integration needs: Determine the level of connectivity required with your existing ERP and other financial systems.

5. Compliance requirements: Ensure you document and understand regulatory standards and the necessary audit capabilities.

6. Stakeholder feedback: Collect insights from various finance teams and specific roles that may use or leverage the new software to understand their pain points and potential improvement areas.

7. Tech readiness: Assess your IT infrastructure and team's technical proficiency for a successful implementation.

8. Budget planning: Establish financial parameters, considering initial costs and long-term ROI. Determine potential time and cost savings areas that can be realized with more advanced automation.

9. Feature prioritization: Rank desired functionalities based on their importance to your organization's needs.

10. Future-proofing: Document scalability needs to ensure new software can adapt to your evolving business requirements.

Step 2: Evaluate for solution fit

When comparing AP automation vendors, consider the following criteria:

Technology and AI capabilities: Examine the vendor's technology and its practical applications for automation. Assess the accuracy and speed of data extraction and processing and evaluate the system's ability to learn and improve over time.

Integration capabilities: Verify that the solution seamlessly integrates with your existing ERP and financial systems. Seek out vendors with experience integrating your specific software to ensure compatibility.

User experience: Analyze the interface's intuitiveness and ease of use. Consider mobile accessibility for invoice approvals on the go, which can significantly improve workflow efficiency.

‍Customization and flexibility: Determine the solution's ability to tailor workflows and approval processes to your needs. Look for options with configurable dashboards and reporting features to adapt to your organization's requirements.

‍Security and compliance: Confirm that the vendor implements robust security measures, including encryption and access controls. Ensure the solution complies with relevant financial regulations such as SOX and GDPR to protect your organization's data and maintain regulatory compliance.

Vendor reputation and support: Investigate customer reviews and case studies to gauge the vendor's reputation in the market. Evaluate the quality and availability of customer support to ensure you'll receive adequate assistance when needed.

Scalability: Verify that the solution can handle your current invoice volumes and accommodate future growth. Consider how easily the system can handle new entities or divisions as your organization expands.

Total cost of ownership: Consider costs beyond the initial price, including implementation, training, and ongoing expenses. Evaluate the potential return on investment based on expected efficiency gains and cost savings to justify the expenditure.

Reporting and analytics: Assess the depth and customization options available for reporting capabilities. Look for solutions that offer real-time dashboards and predictive analytics features to provide actionable insights for your finance team.

Vendor portal and supplier management: Evaluate the features available for supplier self-service and communication. Consider tools that facilitate managing supplier information and performance to improve vendor relationships and streamline procurement processes.

Pro tip: Don’t skip these vendor comparison best practices

1. Create a scorecard based on your prioritized criteria

2. Request detailed demos tailored to your specific use cases

3. Speak with reference customers in similar industries or of similar size

4. Conduct a pilot or proof of concept with shortlisted vendors

5. Involve critical stakeholders in the evaluation process

6. Consider both short-term needs and long-term strategic fit