Exploding the Myth About AP and ERP Integration

markus-spiske-hl3W0M7aYPM-unsplashAP leaders may pine for the day when supplier invoices digitally flow through their department, without human operator intervention. But at most organizations, that’s a far-off dream.   

Sixty-four percent of organizations manually handle most of the invoices they receive from suppliers. Nineteen percent of organizations manually handle every supplier invoice that they receive.   

Those statistics from SharedServices Link speak to the amount of manual keying, paper shuffling, and chasing down of information that most organizations must do to approve their supplier invoices.  

Incredibly, even automated AP departments must handle many of the supplier invoices they receive.

The truth about ERP integration 

What’s standing in the way of touch-free invoice processing?  

The root of many of the inefficiencies in AP can be traced back to the poor integration between AP and the enterprise resource planning (ERP) applications that it feeds. ERPs are the financial nerve center of the business. An ERP manages supplier data, payment terms, policies, and financial data.       

Yet 61 percent of organizations surveyed by SharedServices Link are dissatisfied by the level of integration between their AP processes and their ERP, and they plan to do something about it.    

ERP integration synchronizes data across applications for two-way data sharing, meaning that information can flow seamlessly for greater operational efficiency. But that’s not what most AP automation solutions provide. These systems typically output a file at the end of each processing day with information on the invoices it processed. Some of these AP systems might also ingest a file with purchase order or proof-of-delivery information at the start of the day that can be used for matching invoices with purchase orders. The problem with this approach is that it can’t account for changes to data in the ERP that might occur between uploads. The information isn’t synchronized.   

Without strong synchronization, data exchanged between the systems may be inaccurate, incomplete, delayed, or poorly organized. And that’s likely to result in inefficiencies, unnecessary complexity, data silos, and risk. In many cases, decision-makers won’t have access to the variables they need. 

Sound familiar?     

The shortcomings of poor ERP integration are especially pronounced in organizations that operate multiple ERPs across their business units or geographic regions where they do business. Back-and-forth e-mails and phone calls, inaccurate financial reporting, and an arduous financial close are some of the tell-tale signs of an AP department that needs to better integrate its processes with its ERP.  

Make seamless ERP integration a reality 

Improving AP efficiency requires better integration with the ERPs that AP feeds. Here are four things to look for in an AP automation solution to ensure it provides seamless ERP integration: 

1. Touch-free uploads of data into the AP system or ERP. AP departments shouldn’t have to manually key invoice header or line-item data or details of approved invoices into their ERP. 

2. Synchronization of data between the AP system and ERP. Business changes fast these days. AP departments can’t rely on day-old data for making decisions or resolving issues.         

3. Bi-directional data transfers between the AP system and ERP. The last thing any AP department needs is more manual processes. That’s why it’s critical to find an AP system that automates the transfer of data to and from the ERP, without clunky manual uploads.

4. Streamlined reconciliation. The financial close shouldn’t be so hard. And it doesn’t have to be when you have an AP system that automatically reconciles data within the ERP. 

This is the level of ERP integration that AP departments need to achieve touch-free processing.  

If your AP department is struggling with manual keying, too many errors and mistakes, onerous exceptions resolutions processes, inadequate visibility into the status of invoices, and slow cycle times, the problem may be a lack of integration between your AP processes and your ERP.  

To learn how ActiveWorx can help, contact one of our representatives today. 

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