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AP Automation – inside or outside your ERP?

Considering implementing an AP automation solution to improve your accounting and finance processes? First and foremost, you must decide where your AP automation solution should sit — inside or outside of your ERP. Opinions abound on why one approach is superior to the other, but as independent, industry experts, we can say objectively that there are several advantages to both. Here we’ll endeavor to guide you briefly through each approach to help you ensure you find the best fit.

ERP, or Enterprise Resource Planning software, allows organizations to integrate their most critical business functions into one complete, streamlined system. How you choose to integrate an AP automation solution with your ERP can substantially impact the expense, complexity, and efficiency of doing so.

Advantages of AP automation inside your ERP:

AP automation inside your ERP means your AP solution is transparently embedded inside your existing environment. The user interface (UI) performs the same way and data can be written instantly and directly to the ERP system’s own database tables.

If you already have a well-established ERP system in place that both your accounting and business users are familiar with and are using consistently, then AP inside ERP is likely the right choice since it should have less impact on existing processes and reporting.

More specifically, with AP inside ERP, organizations can expect:

  • A single source of truth — Data is written immediately and directly to the ERP data tables ensuring all information is up-to-date for all users and for any reporting requirements.
  • Access to customer-specific features in the ERP— If you’ve enhanced your ERP system in other areas, an embedded solution will provide access to those during processing.
  • Access to user specific data— If you’ve created custom data fields, these will be immediately available without any bespoke integration work.
  • Reuse and respecting of already configured rules and validations — Custom rules/validations will automatically be considered when executing transactions to ensure data quality/integrity.
  • Respect for user privileges that are already configured in the ERP— User access setups are taken directly from the ERP.  
  • Familiar user interface — Less training and change management during rollout for both daily users and the occasional approvers already familiar with the system.

Advantages of AP automation outside your ERP:

AP automation outside your ERP means using a system that is integrated with your ERP rather than directly embedding it inside — often as a cloud application.

If you have multiple ERPs, or a have a large number of non-AP users who require a clean and simple user experience, then you’re most likely to benefit from AP outside ERP as it provides access to a single user environment, optimized by task, accessible anywhere and on any device, regardless of which underlying system is being targeted.

More specifically, with AP outside ERP, organizations can expect:

  • Simplified “umbrella” approach — A single instance can be easily integrated with one or more target systems, providing a consistent and seamless user experience to the users regardless of the target system.
  • Universal best practices — A single umbrella system can be the catalyst for adopting best practice throughout your organization.
  • Improved user experience — The user experience is optimized for the process, the type of user and the type of device they are using to connect.
  • Cloud-based deployment — This means faster and easier upgrades, less impact on IT, and built-in security and disaster recovery.
  • Integrated dashboards and reporting — Because they are integrated into the solution, they can be optimized for the type of tasks and the type of users, for example the provision of a CFO dashboard.
  • Broader user access — As the system is not directly connected to the ERP (nor requires ERP system access) you can potentially incorporate a wider set of users to improve approvals processes or simply give access to the dashboard/reporting functionality.

Which is the best fit for you?

Ultimately your decision should come down to this: how well established is your current ERP, how well defined are its processes, how familiar are users with the system, and what direction are you moving in from an infrastructure perspective? There is a lot to consider and we are here to help guide that choice.

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