Transitioning to an automated accounts payable system impacts company culture and the role of employees in the AP department in a variety of beneficial ways.
Studies show people spend 10 to 20% of their work hours on dull, repetitive computer tasks. And at least 13% of workers find such chores to be a waste of time. What if there were a way to reduce those uninspiring hours and replace them with more meaningful work, all while increasing efficiency and accuracy? An automated AP system can help.
Additionally, the same research shows 50% of companies spend $5 to $25 per manually processed invoice. Automating the accounts payable system can reduce these costs as well.
Switching to accounts payable automation typically saves AP employees substantial time and effort, but the automation process can come with challenges, too. Effective change management is critical for a smooth transition. Below, we will offer tips for change management and accounts payable automation best practices to ensure easy and effective implementation of an automated AP system.
Traditional AP systems have several drawbacks.
In light of this information, automation provides the attractive options of accelerated invoice approval, increased efficiency, less data-entry labor, lower costs, fewer errors, reduced risk of fraud and more available data.
However, organizations may resist switching to an automated AP system for a variety of reasons. These can include the absence of a budget, perception that current processes are working smoothly, a lack of information about available automated solutions, lack of executive buy-in and a belief that the change would offer little return on investment.
Implementing an automated AP system can also be challenging if companies do not take the right steps to facilitate a smooth transition. Implementation can fail for several reasons:
A sloppy or failed transition to an automated AP system can have severe consequences, including damaged relationships with vendors, credit holds, or even your vendors refusing service after delayed or missed payments. Effective change management helps overcome these challenges and create a smooth transition to an automated AP system.
According to a recent McKinsey report, it's possible to automate up to 45% of work activities across a range of industries using existing technology. Though few jobs lend themselves to full automation, about 60% of occupations could see 30% or more of their activities automated. So one challenge involved in transitioning to an automated AP system may also be employees' fear that these systems will lead to a reduced number of jobs in the future as automation takes over more of the workload.
Employees may also worry the new system will be challenging to learn or will create more work for them. They may also resist the change because of the natural human impulse to stick with what is familiar and comfortable.
Managing the transition to an automated AP system can often mean addressing challenges in a variety of areas.
Change management refers to the approach an organization takes to prepare and support its employees during times of institutional transition. It focuses on the people and culture of a company during a change and takes a systematic approach to better facilitate the shift.
Despite its reputation as the "soft" side of change, the human element can be more complicated to manage than the "hard" logistical side. When change occurs, people have to learn to work differently, and that's not always an easy task. According to a Forbes survey of over 500 executives, more than 85% of them said they believe effective change management is critical to their success during disruptive times. However, 38% of survey respondents also said their employees view change as too much of a threat.
Helping teams learn to lean into and embrace the change is integral to the work of change management. When executed correctly, change management leads to financial gains by helping optimize team and individual performance throughout the process.
Change management is valuable for several reasons.
In the context of AP system automation, change management plays a pivotal role, especially in light of the increased role of technology. Change management with automation can help employees understand the new systems and how their roles have evolved. It can also help reassure employees their jobs will not become obsolete with the advent of AP automation.
According to the U.S. Government Accountability Office, the quality of automated accounting systems largely depends on the effectiveness of internal control.
Internal control has two components: general control and application control. Application control refers to the data processing that takes place within the application software, whereas general control applies to information systems and the end-user environment. This last element is particularly critical because it refers to how the users of the new system — AP department employees — engage with and embrace it.
Below are a few concrete steps companies can take to facilitate a successful transition to an automated AP system.
Before beginning the transition, the company should consider how the change will impact company culture and the roles of employees. Expecting changes in the company culture helps managers prepare employees for their new roles and shifting interpersonal dynamics.
Often, employee resistance to change results when employees cannot envision how it will benefit them or the business. It is essential to establish clear-cut goals for how the change will be positive for the AP department and the entire company.
Be open with employees about when the change will roll out and the steps that will be involved in implementing it. If you share the implementation plan early, employees can prepare and will feel more involved in the transition.
Get an experienced process worker involved in the roll-out — someone who knows the process inside and out. Some companies try to try to build process flows with knowledge that comes only from IT people and process managers. They always miss something because they are not involved in the process daily.
Provide education and training to prepare employees to use the new system and take on any new roles or responsibilities that will be on their plates. Provide training sessions early enough that employees have time to ask questions and become familiar with the new software before it rolls out. Training and education should also continue into the implementation process. Even though you still have a business to run, you have to make training a priority, especially when a Vanguard employee is on-site to help.
During the transition period, provide updates to employees about new changes. Keep these updates short and to the point, so employees don't feel overwhelmed with information, but have the background they need to keep up during the implementation process.
Allow open channels of communication for employees to submit feedback about the implementation process or questions they may have about the new software. Employees can identify problems or areas for improvement, so you can better adjust job roles and task delegation.
Sustain the change by continuing to hold ongoing training to improve and refine your accounts payable process. You can also encourage employees to set and work toward personal goals for their performance with the new system.
Run the system as implemented for a month, then build your list of changes. Don't make snap judgments and request changes immediately. We find that after a month, the list of requested changes is usually drastically different. Take your time and work patiently through the growing pains to narrow the adoption window.
When companies facilitate AP automation successfully by considering employee needs and company culture, many advantages accrue. Strategic change management of AP automation comes with several benefits for businesses.
Vanguard's automated accounts payable solutions can integrate with any existing system for a smooth and seamless transition. When implementing AP automation software, Vanguard can provide guidance and expert advice for a straightforward, successful roll-out for your entire AP department.
We've been in business for over 30 years, and over that time, we've developed a reputation for smart, dependable automated solutions. Our automated systems help companies eliminate lost paperwork, reduce errors, increase savings and boost employee productivity and happiness, as well as client satisfaction.
Contact us today for more information about our AP automation solutions or to schedule a free custom demonstration.