Top AP Automation Challenges

AP automation can save organizations more than 70 percent of time spent on accounts payable (AP) processes, according to a recent survey by Quadient. However, there are often blockers or challenges - both known and unknown - that can prevent complete operational efficiency, even with some technology solutions in place.

In a recent social media poll, Vic.ai asked finance and accounting professionals to select their organization's most significant AP automation challenge from the following six options:

• Low visibility into operations
• Too many disparate systems
• Issues with team productivity
• Pressure to reduce costs and spend
• Consistently late payments to vendors
• Issues with data accuracy

Below are the top AP automation challenges teams face when attempting to optimize and streamline their day-to-day processes. Interestingly, poll respondents listed issues with data accuracy as the leading obstacle to achieving reliable and trustworthy automation within their department. However, each of the additional challenges below contributes to poor data accuracy. 

Top AP automation challenge: issues with data accuracy

Even with advanced AP automation systems, data entry, processing, and reporting inaccuracies can persist. These errors often arise from various sources, such as inadequate data integration from disparate systems, human errors during manual data entry, and inconsistencies in supplier information. The repercussions of data inaccuracies can be significant, leading to issues like duplicate payments, missed discounts, and strained vendor relationships. To address this, businesses must prioritize data validation processes and leverage leading technologies like artificial intelligence (AI) and machine learning to enhance data accuracy within AP automation workflows.

Additional AP automation challenges

1. Low visibility into operations

Low visibility into operations is a significant challenge in AP automation because it hinders an organization's ability to monitor and manage its accounts payable processes effectively. With clear insight into the status of invoices, payment schedules, spend management, and overall financial health, decision-makers can make informed choices and swiftly address issues that arise. Lack of transparency often leads to missed deadlines, compliance issues, and uncertainty that can ripple through the entire financial operation.

2. Too many disparate systems

Having too many disparate systems is a common challenge in AP automation. Whether a result of a recent merger or acquisition or just poor technology planning, when different tools and platforms are used for different parts of the process, it can lead to a fragmented workflow. This fragmentation complicates data integration and synchronization, making obtaining a unified view of the accounts payable process difficult. As a result, it can cause inefficiencies, increased errors, and a significant amount of manual work to bridge the gaps between systems.

3. Issues with team productivity

Challenges with team productivity can severely impact AP automation efforts. Manual processes, redundant tasks, and inefficient workflows consume valuable time and resources, preventing AP teams from focusing on more strategic activities. Additionally, low productivity can lead to increased error rates and slower processing times, further complicating the AP process and potentially resulting in financial losses or vendor dissatisfaction.

4. Pressure to reduce costs and spend

Pressure to reduce costs and spending is a constant challenge in AP automation, particularly for CFOs and financial executives. Organizations always seek ways to cut expenses while maintaining or improving service quality. Implementing and maintaining an AP automation system can be costly, and balancing these expenses with the need for cost savings can be difficult. Furthermore, ineffective AP processes can lead to missed opportunities for early payment discounts or increased late payment penalties, undermining cost-saving efforts.

5. Consistently late payments to vendors

Consistently late payments to vendors are a critical challenge in AP automation. Late payments can damage vendor relationships, leading to a loss of favorable terms or even supply chain disruptions. This issue often stems from inefficient processes, lack of visibility, and data inaccuracies. Ensuring timely payments requires a streamlined, automated AP system that can process invoices quickly and accurately, provide timely approvals, and release payments within agreed-upon terms.

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Unblocking issues with data accuracy for improved AP automation

Tackling data accuracy issues in AP automation requires a comprehensive approach. Organizations should implement stringent data governance policies that outline how data is entered, processed, and maintained, including standardizing supplier information and ensuring consistent data formats across all systems. Automation tools with built-in validation checks can significantly reduce human errors by flagging real-time discrepancies. 

Integrating AP automation with enterprise resource planning (ERP) and customer relationship management (CRM) systems helps ensure a more seamless data exchange and minimize the risk of data silos. 

An AI-driven analytics solution can surface real-time data for strategic analysis and decision-making. An AI system improves over time by continuously learning and adapting, offering increasingly precise and relevant insights that can drive better financial planning and performance. Real-time operational insights, accountable metrics, and easy integration capabilities are some of the top features to look for when evaluating a new analytics tool.

Vic.ai, for example, recently launched new analytics packages designed to meet accounting teams' unique data and reporting needs. Learn more about the features and functionality in the latest release.