Building a Custom AP Workflow into Your ERP: Costs, Risks, & Inefficiencies

Today’s ERP solutions are so evolved and so all-powerful that sometimes we forget what they were really designed to do and we try to force them to do everything. For instance, they were designed to streamline information, mainly master and transactional data, across the entire organization. They were not designed to manage the workflow of how that data is created and used. Out-of-the-box most ERPs don’t even have workflow functionality built in. Those that do offer only limited functionality. Those limitations are referenced in this article from Oracle, which says:


Other articles you might find helpful:

“ERP software also offers some degree of synchronized reporting and automation. Instead of forcing employees to maintain separate databases and spreadsheets that have to be manually merged to generate reports, some ERP solutions allow staff to pull reports from one system.”

And that’s about the extent of it; they offer “some degree of synchronized reporting and automation,” and “some ERP solutions allow staff to pull reports from one system.”

Many ERP solution providers have identified that gap and have tried to build it in or bolt it on, often by purchasing a solution that does manage workflow and trying to integrate it with their core product. As Jeff Haller wrote in this article, “The Unseen Risks in Buying an AP Solution that Didn’t Start Out as a Single Piece of Software,” there are several pain points inherent in that approach, both in the initial functionality and in ongoing costs and loss of function.

However, many ERP solution providers will suggest writing custom workflow for the ERP to get around this problem.

No matter how you approach it, this is a huge undertaking. We’ve heard stories of customization projects that were never finished as well as customization projects that were finished then scrapped, such as one case where the IT department designed the AP workflow and finished the project without involving the Finance department at all. But even the most successful projects can incur unexpected problems. Here’s a guide to some of the most common ones.


The upfront costs to create and deploy a custom workflow are often prohibitive in themselves, and the required resources from the IT department, which is usually overleveraged already, add to both the direct costs and the opportunity costs.

But there are also significant costs that you may not have considered, both in the initial phase and ongoing. For instance, how much do you pay for user licenses for your ERP? So, for example, if your invoice workflow is managed in your ERP, every person who ever needs access – no matter how infrequently – to that system now has to have a user license.

Your support and upgrade costs will also increase with the added functionality, and what will it cost if you have a change in business requirements due to a new location, division, or acquisition? A custom solution is not configurable or scalable so any change in workflow requires new customization.


Speaking of support and upgrade costs, one of the risks you’ll run is that the people who designed your customization are the only ones who can support it, so if they become unavailable you’ll be without support for your product. And when it comes to upgrades of the ERP software you may find that your customizations are in conflict with future releases, causing the system to break or preventing you from upgrading until your customization is upgraded to meet the new requirements.

The even greater risk is that the customization won’t take all of the compliance and reporting requirements into account. You’re replicating a manual process, but with accounts payable automation you’ve now removed the manual oversight, so unless you build in best practices and compliance this may result in loss of financial controls and perhaps leave you exposed to fraud or expensive errors.


Of course good automation isn’t just about limiting risk, at its core it’s about increasing efficiency. As Bill Gates has been quoted as saying:

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

Usually when an AP workflow project is planned there is little thought given to increasing efficiency in the process, the goal is only to replicate the existing process in the software in order to automate it. And it’s almost certain that any manual process that has evolved organically over time, through changes in requirements and personnel, will have accumulated steps that no longer need to be taken and avoided doing things that were impossible or at least difficult because of the lack of automation. By building those unnecessary steps into the workflow, and by not evaluating the opportunities for increased efficiency made possible by the very AP automation you’re investing in creating, you’re compounding those inefficiencies.

It’s also important to remember that an ERP system, assuming even the best outcomes of a custom workflow project, is still only dealing with data. You’ll still have to have a separate process for financial documents such as invoices and purchase orders which are usually printed and routed manually or scanned and emailed. Until that data is entered into the ERP it’s not part of your AP automation.

Finally, just because your workflow is moving the data through the process that doesn’t mean that you will be able to see where it is in the process. So it’s likely that you still won’t have full visibility and tracking of outstanding payables.

To give you a frame of reference, here is a list of the capabilities a custom AP workflow inside of your ERP would have to have in order to replace DataServ’s comprehensive solution:

  • Workflow designed and tailored to best practices and company requirements
  • Enabling coding across user base
  • Initial and ongoing training
  • Documentation and automation of all processes
  • Physical mail sorting and routing
  • OCR, data validation, and QA
  • Document management and archiving
  • Exception flagging and routing
  • Report set up and full visibility into spend
  • Ongoing upgrades
  • Cloud data storage
  • Online access from any internet or mobile connection

We’re also ERP agnostic and have experience working with nearly every ERP in use today, so data that is handled in our workflow is uploaded and stored seamlessly in your ERP. Which is exactly what your ERP was designed to do.

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