In our complete guide to accounts payable automation, we highlighted some of the things that a lot of AP automation solutions have in common. 

But it’s important to remember that not all solutions are created equal. 

That’s why we're taking a look at some of the key differentiators that can help you make the right choice when investing in an AP automation solution for your small business.

6 things to consider when choosing AP automation software

1. Tailored supplier records

You probably use the same suppliers over and over again. So it makes no sense to re-enter vendor details every time you work with them. 

At the very least, your AP software should store supplier information to save you precious time and energy that’s normally spent manually inputting addresses and bank account details.

What’s even better is if the software allows you to maintain a “hub” for each supplier, with a record of transactions, their preferred payment terms and discounts and notes on what’s worked well (or not) in the past. If these can be customised to your specific supplier relationships, then you know you’re onto a winner. 

2. Built-in approval workflows

AP approvals are vital for company purchasing. Having this built into your software not only speeds up the process, it also ensures you always have a clear paper trail. 

Again, customisation is key here. A good AP software will allow you to build workflows that match your company’s hierarchy. Can you easily assign the right manager to their team or budget? And can you allow for substitute approvers if the first person is away or indisposed? 

3. Easy collaboration

Invoice processing usually involves a handful of people: 

• One team member has a direct relationship with the supplier. They receive the invoice directly and upload it to the system

• Their manager (or the budget owner) quickly reviews the request and approves the invoice

• A finance team member finalises the invoice and schedules it for payment

• Your accountant (in-house or outsourced) books the transaction alongside all your other spend 

The best tools make team collaboration easier and will have this entire process built in and send notifications to each person in the chain at the right time.

Easy collaboration is especially important if you use outsourced accounting services. As much as they may love working with you, and vice versa, the most efficient working relationships are those that require the least back and forth.

4. Integrations with your accounting platform

Whether you have a complex ERP or an SMB-friendly accounting tool like Xero or QuickBooks, it’s likely you rely on it for everything finance. That means your AP automation system must talk to and work with it in harmony. 

While most AP solutions have a few integrations, your accounting platform may not be on the list – it’s therefore critical to check integrations before committing to an AP solution. 

5. Multi-currency and multi-entity support

Despite being an everyday occurrence in business, dealing with foreign currencies can add serious financial challenges. Using the correct exchange rate in your accounts seems simple, but small businesses have to dedicate real time and brainpower to getting it right. This challenge becomes even more difficult at the end of the month when the original exchange rate has probably changed.

The same is true for companies with offices in different countries. These usually need to be legally and administratively distinct, even if you handle all the finances from a home base. A tool that accounts for this and lets you switch between entities is a must in this case. 

As you shop around, make sure you find out how each tool deals with these two instances. 

6. Added insights

Real-time data is a huge advantage when assessing your commitments and actuals. The best tools guide you based on this information with clear and actionable insights. 

You should be alerted immediately if you’re spending more than usual with a particular supplier or on a certain inventory item, or if the average time to pay invoices has gone up by an alarming degree, for example.

Simply having the data in real-time is a great first step. Software that can supplement that by suggesting urgent actions is a massive bonus. 

For both in-house and outsourced accounting and finance experts, AP software that can share strategic insights and help guide companies is vital.

Automating your accounts payable: 5 steps to getting started

Now, let's get to the crux of it. Automating your AP processes involves five (relatively) straightforward steps.

Step 1: Assess your AP pain points

Any new software you acquire should solve a pain point or overcome clear inefficiencies. For accounts payable, the most obvious are: 

• No control. Employees are paying invoices without any approval from a budget owner 

• Frequent errors. Whether caused by excessive data entry or a lack of understanding across the organisation, your team is constantly fixing basic issues

• Lack of scalability. You have a growing number of invoices and don’t have the funds to hire just to keep up

• Low or no cash flow visibility. Until the books are closed each month, you have no idea what’s committed and can’t make important financial and business decisions with confidence 

• Geographical factors. Hybrid offices and flexible work prevail, but they only work where your processes are fully digitised. If you rely on physical filing cabinets and in-person signatures, you’ve got a problem on your hands

If you’re not automating your AP yet, you likely have a mix of all of these points. But it still pays to identify the biggest and most impactful ones and focus on these as you move to step two. 

Step 2: Choose an AP automation solution

Above, we identified some of the most important features of good accounts payable software solutions. Keep these in mind as you shop around for a solution to tackle your key pain points. 

The tool you choose will ultimately depend on your own needs, the size of your team, the amount of invoices you process and the rest of your tool stack. 

Step 3: Prepare for implementation

Even the simplest and most user-friendly software requires some implementation and time to adjust. These are the key steps to take in preparing for successful implementation: 

• Identify key stakeholders. Who needs admin access and who will ultimately “own” the tool? 

• (For accountants) Get the access you need. Do you have the permissions and access to company systems you need to install new software? And more broadly, will everyone listen to your policies and advice?

• Set up integrations. Connect the new software to your existing stack

• Prepare training materials. Hopefully, the system you choose is user-friendly. Even so, you’ll still need to provide some information and guidance to get staff up and running

The level of complexity, as well as the time and money required to implement a new AP software, should also be a key differentiator when choosing a solution. There are plenty of smart, simple systems available today, so you’ll absolutely be able to find one that works for you. 

Step 4: Formalise your process and onboard staff

Once the software is up and running, you need to make sure that everyone knows how and when to use it properly. Don’t overlook the important step of creating user profiles and getting team members logged in. 

There’s also the job of setting policies. When well implemented, the tool itself should set boundaries and keep your team within the rules. Make sure each person has the right permissions, team structure and approver assigned and that they don’t have access to the things they shouldn’t — like bank accounts. 

Step 5: Monitor and optimise 

In the months after investing in new software, you need to know that it’s doing what you need it to do. With AP automation software you should immediately have more visibility and control over invoice processing. If the opposite is true, there’s a problem. 

The best sources of feedback are the people who use or interact with the product every day: your accountants, finance people and procurement team (if you have one).

You’ll know it’s working well when people report spending less time on data entry and admin and more time on their core work. 

Mimo: the ultimate AP automation solution

If you’re a UK SME that wants maximum automation and minimal-effort payments, Mimo is for you. 

With powerful automation features, our accounts payable solution, Mimo Pay, can save you up to 1 day a week on your AP admin. Plus, with Mimo Flex, you can tap into built-in credit lines whenever you need to, so you’ll never get caught out and miss important payments. 

Learn more about our automated AP features and discover what automation can do for your business in our complete guide to AP automation.

Want a product demo? Get in touch with our team to book a call.