January 5, 2021

How AP Professionals Can Overcome Objections to Accounts Payable Automation

by Jillian Straw

“Some people believe labor-saving technological change is bad for the workers because it throws them out of work. This is the Luddite fallacy, one of the silliest ideas to ever come along in the long tradition of silly ideas in economics.”

― William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics

In this article, we look at some ways in which AP leaders could overcome organizational inertia and resistance to streamlining Accounts Payable processes with automation. 

Who is this for?

This guide is written for AP professionals who are exploring ways to automate their AP processes and are facing challenges with getting buy-in from their colleagues (who will be the primary users of the software) and business owners (who will be paying for the software)

Common objections that many AP professionals have to address are:

  1. Why Fix What’s Not Broken?
  2. Does The Technology Work?
  3. Why Should We Pay For This?
  4. What Would The AP Team Do Once This Has Been Automated?

Opposing technology isn’t new

When technology arrives to a society it’s never accepted outright, and is often opposed. 

When fire was invented, it was feared, even though it became a necessary part of evolution and completely switched the course of human evolution. Similarly in the 19th century, the invention of textile machinery and the subsequent advent of the Industrial Revolution was opposed strongly by the Luddites, yet still changed the course of human progress. 

Luddites, named so in secret and associated with a weaver Ned Ludd, were handloom weavers who spent years perfecting their craft. They bloodied their fingers and strained their eyes and produced beautiful textiles. 

Then the machines came. 

Faster, more precise looms and knitting frames were introduced, threatening their livelihoods. Luddites feared losing their jobs to unskilled machine workers. They feared being put out of business by others who could now produce textiles faster.

And so, understandably, they tried to put a stop to it by breaking machinery and burning mills down. 

How the Industrial Revolution Gave Rise to Violent 'Luddites' - HISTORY
Luddites destroying industrial spinning machines

AP Automation is no longer an option; it’s a necessity

Over the last couple of months nearly every business practice has needed to adapt. Remote operations are looking for ways to maintain standard procedures without being on site to execute them. Automating certain practices, especially within the finance and Accounts Payable process should be the easiest decision to make in that regard- and especially within the restaurant industry.

The hospitality world has more than enough problems to solve without adding their bookkeeping into the equation. As it stands, whether or not indoor dining is open in your area, there are still people who need to be at each physical location to handle things like inventory and ordering, preparing each customer order, and delivery. 

In this time of social distancing, when businesses are focussing on reducing the number of essential employees on site, bookkeeping is one of those roles that can be performed remotely. However, in order to make that happen, some form of AP Automation is necessary. 

 With that in mind, let’s look at some of the top objections AP leaders face from their team when automating AP processes – and how these objections can be addressed. 

Objection #1: Why Fix What’s Not Broken?

The process may be manual, sure, but it’s worked for us! Why take the chance on new technology when the analog way hasn’t fully let us down?

This objection makes sense on the surface, but quickly falls apart when you get down into the nitty gritty. 

Let’s look at this through a different technology perspective.

We all (or at least hopefully it’s not just us) remember the days where a VHS player was the epitome of technology. No more having to keep track of when your favorite show or movie was going to be shown on cable- just click play whenever you want! 

Nowadays, VHS players still work. They still play pause and stop just as well as they did in the past- nothing is broken. And yet, you’d be hard pressed to find a VHS player readily available.

That is simply because technology has advanced, just as all standard practices do over the years. Now you have higher quality DVD or Blu-Ray players that show crisper images, are less bulky and offer more features. Even further than that, and more to our point, there are digital streaming services! 

Like automation vs manual, these services weren’t necessarily necessary, but the improvements they offer are immediately apparent. 

In a world where COVID-19 has forced businesses to be careful with how many employees can be on-site at any point, AP automation enables your book-keeping team to work remotely with ease. These improvements are not just a luxury; they’re critical to helping your team operate smoothly. 

Action Point:

Discuss with your team on the benefits that AP Automation brings to their ability to get more done without having to come into the office. Count the number of spreadsheets you’re currently using to track prices and discuss what reports you’d like if they were easily available.

Objection #2: Does the Technology Work?

To build off the previous example, not everyone bought into Netflix when it first came out, or even when it first went fully digital.

Similarly, many people in the restaurant industry are just starting to look into things like automation, and are concerned with the growing pains associated with learning something new.

While AP automation may seem like a new buzzword, the truth is that it’s actually been around for a while and has been constantly improving for years now. The kinks have been smoothed, the errors have been eradicated, and the processes have been streamlined. 

The reason AP automation has a buzzword feel to it is because the timing has never been more acutely felt. With the pandemic forcing non-essential staff to work from home, automating your AP means having less staff on-site and minimizing the risk of an outbreak.

That means enabling your bookkeeper to receive invoices, code it to the right GL code, set up the payment approvals and make sure the bill is settled, remotely.

This isn’t just a luxury that only the top restaurants can find a use in- it is something that everyone concerned about their bottom line should be aware of.

The best way to address concerns about the technology is to research the software and how it will help your business.

Action Point:

Research the software that you’re about to use, read up on customer reviews posted on 3rd party websites like G2 Crowd and Capterra and present to your stakeholders.

Set up a demo with the software vendor to get a good feel of the platform and to see if it will be a fit for your needs.

Objection #3: Why Should We Pay for This? 

We all know nothing in life is free- as badly as we wish it were. Technology is no different there, but automation is different in that there is a distinct and measurable ROI afforded to those who streamline their systems.

Owners don’t often have the time or mind-space to handle the day to day invoice management and accounting practices. Chances are the owner only really sees the invoices once or twice a month when glancing at the books and profit margins. They may not even have the time to review every line item of the invoice in the ledger.

As the person running the AP department or just balancing the books overall, you understand challenges in the AP process that most wouldn’t. 

For example, the number of hours spent deciphering a hand written invoice, the tedious email chains trying to figure out why an item wasn’t delivered, the minuscule typos that lead to concerning discrepancies that you then need to act as a forensic accountant to figure out- whether or not you actually are one (probably not). 

Your owner or manager may not understand these issues, but they would understand the dollars associated with them. Every instance of human error is money unaccounted for or lost to the void of duplicated payments. 

If there were a software platform holding all of this information like a digital filing cabinet, those concerns would disappear! Instead of paying someone for hours and hours of tedious, mind-numbing duplications of effort to find that one missing invoice tucked away in the back corner of the walk-in closet, you would be able to rest easy that everything you’re looking for is neatly tucked away in the cloud.

Additionally, restaurants that adopt AP automation tend to see a positive ROI within the first two to three months of use- which can even lead to the cost savings equaling the price of the initial implementation.

Here’s an example:

With automation comes the ability to get more immediate and granular insights into your invoice data. If your business is like many others and has contracted pricing with your vendors, plug those acceptable variances in and automatically get alerted when a vendor breaches those prices. If you own multiple locations, automation can also help you compare prices across each of them and hold your vendors accountable if they try to charge one location a different price than another. 

Ottimate’s Insights Platform surfaces price differences across locations

Action Point: Talk about the time-savings and efficiencies that could come from using such a platform. Present it from the point of view of reducing busy-work and freeing up time for more value-add work (like identifying opportunities for cost-efficiencies) and you will have an audience. 

Draw up a cost-benefit analysis of implementing AP automation. Some ways to quantify the benefits of AP automation include:

Time-savings from avoiding manual busy-work

Additional benefits from redirecting freed up time for higher value work

Additional benefits from discovering new insights that were previously hard to get due to lower available bandwidth

Additional benefits from programs like spending rebates that net you cash back on payments made to vendors via virtual cards

Objection #4: What Would the AP Team Do Once This Has Been Automated?

Answer: Use the software solution to unlock their insights superpower.

While you or your team-member’s job may currently consist of typing in invoices, checking each item’s prices, or reconciling vendor statements over the course of a few days or weeks, that doesn’t have to be your primary job.

Picture this: Instead of getting to the office and spending 8 hours a day typing in that 20 page Sysco invoice and coding each individual item to the chart of accounts, you could spend that time on setting up approval workflows, scrutinizing spending trends and identifying dramatic fluctuations in prices for commonly ordered items.  

Basically, automation would eliminate your manual workflow induced headaches (and paper cuts) and in return give you as an AP professional a superpower that would normally be out of your reach.

Action Point:

Identify and discuss projects and operational gaps in your accounting organization that could now be worked on by you or your team – as a result of the time freed-up from automation.

Empower your team to do more with automation!

In Summary

When it comes to restaurants and the hospitality industry over all, though, AP automation is a beacon of light. It eliminates the need for repetitive time consuming data entry, allows you to act on that data faster, keeps your vendors honest, and keeps people out of physical locations. 

Whether you run a small mom and pop store, a quick paced coffee cart, a retail outlet or a large operation, automation is your friend. 

To learn more intimately how automation can help you and your business, reach out to Ottimate today and get a personalized demo!

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