Yet another acronym has made its way into the finance industry, APIA. That stands for accounts payable invoice automation. It has caused some confusion in the industry, making you wonder, “Is this a new concept, a new product, new technology?” The answer is simple, no. It’s in the name. Simply put, APIA is the automation of the accounts payable portion of your larger financial process.
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So why are we just hearing about it now?
Well, for years businesses didn’t really know there was an alternative to the large-scale P2P solution. So, that’s what they searched for. It seems recently, those transformations are impractical, and the APIA industry is booming! With inquiries set to outpace P2P, Gartner predicts APIA spending will more than double over the next five years to reach $1.9 Billion.
What are the Benefits of APIA?
In 2021, Ardent Partners reported that the number one challenge for AP teams was the amount of time required for invoice and payment approvals. A lot of this pain comes from chasing down the right person to approve transactions. Let’s talk about how APIA reduces invoice processing time, reduces your AP staff’s workload, and saves your business money.
Ardent Partners’ research found that the average time to process an invoice (including time wasted tracking down approvals) was eight days. APIA reduces human interaction, even for exceptions, and brings the average invoice processing time down to mere seconds. How does it do that? According to Gartner’s 2021 APIA Market Guide, APIA tools automate the capture, validation, and processing of invoices. These solutions reduce human interaction with invoices by automatically matching invoices to purchase orders (POs) and contracts, or automatically coding those invoices that would not have a PO. Other advanced capabilities of APIA include automated multiway matching, fraud detection, and cash management. By creating a touchless invoice process, APIA reduces the opportunity for error and frees up AP staff to do higher-value work.
When using an advanced SaaS platform, your APIA solution can be seamlessly integrated with numerous business systems — from ERPs to MRPs to Financial Management to Email in both software and cloud environments. For example, DataServ created our own ERP Integration Library containing all the integrations we have performed over the years, and we can often match up to your version and generation of software. This keeps your total cost of ownership low as well as ongoing maintenance to a minimum.
Not only can you find APIA solutions that are compatible with your existing software and ERP systems, but financial leaders eager to capitalize on the latest technological innovations will be excited to hear that machine learning (ML) and artificial intelligence (AI) are transforming APIA. APIA harnesses intelligent optical character recognition (OCR) document capture to greatly reduce the amount of manual data keying that is necessary for getting your invoices into your AP automation system or ERP platform, no matter what format the invoices are in. It uses AI to correct common OCR errors that would normally force human corrections. Continuous APIA uses computer vision to label images in the document to map the invoice data. Machine learning algorithms can automate invoice coding, based on your company’s unique general ledger accounts and processes. And APIA uses AI to search for potential duplicate invoices based on multiple data points.
Why choose APIA over P2P?
Gartner found that APIA inquiries are now outpacing P2P inquiries. Why? Companies are hesitant to take on a total P2P overhaul because costs are enormous and the disruption to the organization is stressful. P2P solutions involve updates to product ordering, supplier requisition to pay, budget authorization, receipt of delivery, and invoice processing. 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 risky undertaking for any company. APIA automation is the new hot trend because APIA provides robust change with a simplified transformation process focused on automating invoice processing, making it more likely it will be a success. APIA requires a smaller investment with a faster ROI. So, what company wouldn’t be interested in that?