Accounts Payable Invoice Automation (APIA) and Purchase to Pay (P2P) automation have been on the radar of many companies in the last 3 years. With so many employees working remotely, the cost of manual processes has only increased. Combined with the logistical issues of paper documents being mailed to empty offices, and the hand processing of paper invoices, purchase orders, and receipts can lead to missed deadlines and lost paperwork.
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When the time comes to select an AP automation strategy, many find themselves comparing APIA and P2P options. Today we will share with you what the most recent industry research has found: you don’t need to automate the entire P2P process in order to maximize efficiency and ROI! Yes, you read that correctly—bigger is not always better, and when it comes to automation you can often get more bang for your buck with APIA. Let’s discuss the research and why APIA often offers a quicker ROI.
Fact: APIA is on the rise
At first glance, P2P would seem to be the logical route for companies looking to quickly save money, increase productivity, and improve visibility. Go big or go home, right? Gartner originally thought so, too. While their prediction was APIA would be swallowed up into more complex P2P solutions, their research showed APIA inquiries outpaced P2P, reporting APIA as one of their top three inquiries for the past two years.
Gartner’s forecast for APIA and the Supplier E-Invoicing market is very optimistic.
“New investments in software to ensure continuity in invoice processing and supplier payments despite operating from remote workplaces resulted in faster growth for APIA software.” – Gartner 2021 APIA Market Guide
"Gartner forecasts that the spend on the APIA and supplier e-invoicing software markets will more than double over the next five years. Such spend is forecast to grow to $1.9 billion through 2025, up from $850 million through 2020.“
– Gartner 2021 APIA Market Guide
So why is the APIA outlook so rosy, even when P2P represents a bigger, broader, bolder investment?
Fact: Bigger is not always better when it comes to P2P
While automating the entire P2P process will boost administrative efficiencies and reduce finance and procurement operation costs, for most organizations this represents a major business process transformation. Because it involves so many different departments, groups and functions - from Purchasing to Treasury - it can be a large undertaking. The cost of such a huge transformation, measured in human hours, vendor delays, risks, and the money invested in the automation software, training, updates, and maintenance, is a burden many businesses are not able to bear.
When a business undertakes a total overhaul of their accounting systems, it can be highly disruptive to the organization, its clients, and its vendors, and is also likely to fail for a variety of reasons. For example, some major transformations fail because of competing priorities across the business. Some elements of the organization may not see P2P automation updates as worth their energy or may be stretched too thin to shift their focus to the new project. Along the same lines, if the staff don’t understand the changes, aren’t included in the decision making, or don’t have the time to be trained on the P2P changes, the P2P revolution is doomed to fail. Finally, a massive undertaking like P2P automation can fail because the business couldn’t handle so much change all at once. As we explained before, almost every category of business must be in sync for this overhaul to be successful.
As Gartner found, many businesses are pushing for APIA automation instead of P2P because APIA represents a meaningful change with a simplified transformation process, making it more likely to be successful. With APIA, the investment is smaller, the ROI is faster, and the benefits are still immense.
The trend towards APIA is gaining momentum and the market is constantly evolving. To reap the benefits of APIA, you have to find an APIA solution provider that is a good match for your organization. Gartner found that new entrants to the APIA market are continuously emerging from adjacent market spaces, causing customer confusion due to too many vendor choices. Consider the size of the vendor organization, your functional needs, and geographic fit when you are selecting an APIA partner.