ERP is often considered the heart of your technology stack—data flows in and out of the platform and supplies the rest of the business with viable, decision-influencing information. As with a heart transplant, an ERP replacement is complicated; in fact, ERP replacements have a much higher risk of failure.
Now, this isn’t an article designed to scare you away from making an ERP decision—we wouldn’t be in business if we were doing that. However, there are many reasons that ERP implementations do fail, and our goal is to help you take steps to reduce risk and inform yourself so that your can see the warning signs before they come to bite you.
Financial Management: The Core of an ERP
Knowing this, there are many factors that go into making an ERP decision, one of which is to complete an analysis into the functionality to see how it benefits your business. Whether this is your first project or you’ve made this decision numerous times, you likely know that the financial management module is one of the most thoroughly used and leveraged parts of ERP software.
As we continue through our deep dive into the financial management functionality you should expect from an ERP platform, building on our previous two blogs on cash management and accounts receivable, we would today like to turn our attention to a key factor in your relationships—accounts payable.
Accounts Payable: Top Features and Benefits of Powerful AP
Just as you expect your customers to pay you in a timely manner, your suppliers expect the same from you. Timely payments are a top priority of your suppliers; speed and accuracy of payment is a top concern for you.
Whether you are looking to capture discounts or reduce the risk of paying duplicate or fraudulent invoices, powerful AP functionality can give you the power to break down silos, minimize paper, and take control of cash flow.
What is AP Functionality in ERP?
Receiving and paying an invoice seems simple, but as you know, it’s rarely as easy as it looks. From approval workflows to exception handling, the entire process is rarely straightforward and often leads to delays or inaccuracies. Unfortunately, delayed payments and duplications lead to higher costs and increased risk. The right AP functionality can prevent these delays and inaccuracies, working with cash management, general ledger, and other modules to deliver visibility and control.
Among other functionality, accounts payable functionality can give you the power to manage vendor invoices, automate payment processing, predict cash requirements, track vendor balances, optimize available discounts, and deliver vendor reports.
Why Is It So Important?
Your supplier relationships hinge on your ability to pay them in a timely manner. Accounts payable functionality in ERP is necessary for this, as it lets you do so affordably, streamlining the approval process and minimizing the amount of errors that you encounter. As the speed of businesses increases, the imperative for fast payments will become more pressing and the value of a powerful and integrated AP module will continue to increase, according to the most recent IDC report on leading ERP vendors’ ability to provide such functionality, a report we will explore in depth in an upcoming blog.
What to Look for in Accounts Payable Software
Powerful ERP should offer powerful AP functionality, allowing information to flow efficiently, while intelligently managing expenses and increase visibility into spending. Among the key things you should look for:
- Prepayment Control and Functionality: If you have trusted vendors, you should be able to pay them quickly. With vendor prepayment functionality, you can keep prepayment balance separate from regular AP and enter prepayment requests, issue prepayments, and apply prepayments to invoices as they are received.
- Automation: Set up processes to automatically approve for payment or follow an approval process to prioritize or delay payment before these documents are. Designate an account to pay from or select a payment method.
- Tax and VAT Simplification: Automatically calculate Use and VAT taxes and prepare tax filing reports. Assign a default tax zone to each vendor. This default can be overridden during invoice entry. Tax calculation can include multiple tax items per document line, deduction of tax amount from the price, and tax on tax calculation. Acumatica also supports withholding tax calculations.
- International Payments: Maintain vendor balances in both a base currency as well as the vendor currency. Currency translations are performed automatically
- Intelligence: Leverage predictive entry and flexible screen layouts to speed up data entry. Combine this with automation and multiple pay-from accounts to reduce errors.
- Document Management: Streamline invoice approval and make it easier to resolve issues in the future. When you receive source documents via email or scanning, they’re attached to the invoice for easy drill-down access.
Learn more about the many benefits of AP automation here.
Acumatica Cloud ERP: The Usability Leader
Finding a solution that is user-friendly and functional is a key decision process in the ERP evaluation stage. As we continue to break down the smaller components of ERP and why they matter in the bigger picture, we invite you to learn more about your path to purchase by getting a free ERP evaluation and comparison checklist from Acumatica here.
Acumatica delivers a full suite of integrated business management applications unlike any other ERP solution on the market today. Offering a wide range of products for unique industry needs, Acumatica ERP features a strong cash management application for businesses who need a flexible, adaptable, and robust ERP solution that will grow with them.
Acumatica Accounts Payable is part of the Acumatica Financial Module and integrates with other necessary functionality based on your industry and unique needs. Learn more about Acumatica Financial Management, your path to making an ERP decision, and contact us to learn how we can help you.