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5 FAQs About Accounts Payable Automation

by Mads Toksvaerd, CEO/Founder, DocuBizz

Accounts Payable (AP) is a tedious process that holds great untapped savings for almost any dealership regardless of size.


The question: How can you realize those savings without overspending or overcomplicating the process?

In many European markets, over 75% of dealerships already have solutions in place. Many for over 5 years.


Contrastingly, in North America, fewer than 20% of dealerships have solutions in place. Additionally, we have not found any cultural, technical or practical reasons to prevent North American dealerships from reaping the benefits and savings that European dealerships have been realizing for years.


In this article, we highlight how to take your AP process paperless and what pitfalls to avoid.


Our findings and recommendations are based on implementing and supporting AP solutions for 1,000 + dealerships and processing more than 50,000,000 invoices. We draw on more than 15 years of input from our own customers and users, potential customers, industry experts, our competitors and their users.


1) What is AP automation all about?


“A dollar saved is a dollar earned.” Why would you pay your suppliers more than you need or intended to?


Getting the actual invoice in front of the right people and giving them the right tools to quickly and thoroughly scrutinize, reject or approve is what it’s all about. Getting this done quickly and intuitively ever day generates real dollar savings, potentially on every single invoice received.


Reducing AP labor costs frees up resources for other tasks or can be translated into direct savings. With the right tools, automating the AP process is easy.  However, what cannot not be automated is the actual approval.  No system does that better than you and your employees.



2) Is the Accounts Payable process a purely administrative process that just needs to “get done”?


It is not.


While the process of receiving, registering (data entry), PO matching, if applicable, and eventually booking in the DMS is mostly a purely administrative process, the approval process is not. The approval process is made up of business decisions i.e. judgement calls.


This is especially true in businesses that operate on low margins. Every transaction counts – BOTH sales related and supplier related.


3) Is a stringent, all-out use of Purchase Orders (POs) and subsequent automated invoice matching the answer?


The theory is when an invoice arrives, it will 98-100% mirror a PO and therefore be pre-approved and simply automatically booked and the PO cleared. In the real world, it’s NOT that simple.


In fact, what we see is that LESS than 15% of invoices received actually mirror the PO enough for an automated approval. Why?


There are a host of reasons outside of the dealership’s control that prevent a high number of 1:1 matches.


The person filling out the PO just does not have ALL the information available at the time of ordering, nor do they have the time to find it. The supplier issued a faulty invoice.


In some cases, one invoice may cover more than one PO, or the items on one PO are spread over more than one invoice.


This reality is, you need to optimize the process of receiving, approving and booking your vendor and supplier invoices to get to the actual savings, rather than just the theoretical ones.


Moving invoices through the process fast and efficiently simply does not work unless the invoices are “on screen” from the beginning and remain an integrated part of the process throughout.


Any good solution has to be able to process all types of invoices, regardless of whether they arrive as paper, PDF or XML etc.


Do not get a system that requires you to dictate to your suppliers how and in what format they invoice you. Chances are you will not be able to do that.


Once the invoices are received, either scanned in or input directly as PDFs, you can start taking advantage of some of the obvious automation tools the digital AP process offers.


4) What are the best automation points to focus on?


There are three processes that really benefit from AP automation:


1. Data Entry


OCR reading is the automated machine translation of the image of the invoice and the first step in the automation process. OCR capabilities are common and widespread and an obvious time saver. Have a system do the data entry rather than doing it manually.


However, beware of some significant pitfalls in this area. Getting an OCR system to read all the text and numbers off an invoice is not the difficult part.


Getting the system to understand what is what, and pick out the essential information IS the difficult part.





An example from real life: If you have 500 suppliers and it takes you 30 minutes to set up, test and optimize each, you have just signed up to spend 250 hours, just to get going. Every time a supplier then changes their invoice layout, you will have to go back and redo it.

2. Getting the invoice in front of the right decision makers


Setting the system up to help do this process automatically is the second obvious area to add speed and cut back on the “busy work”.


This is however, also an area where it is easy to overdo it. Here is what we have learned: Setting up automated rules that shoot out invoices can clutter the process.


A good rule-of-thumb is to let the system decide and act when you are confident it will be right in 90% of the cases for any particular rule. If the percentage is lower, you risk cluttering up the system, slowing the processing down and frustrating the users.


3. Cost Distribution


The third obvious automation opportunity is the cost distribution, the coding. Accounting for the cost from the invoice can be automated; the question is where to begin and how to avoid overdoing it.


As with automating the flow, there are some very low hanging fruits to pick first.


If POs are used the accounting information may already be part of the PO. So, matching the PO with the invoice by definition automates the cost distribution. This is however ONLY true if the PO has the right information and actually mirrors the invoice received!


If the use of POs is important in your business, make sure your AP system can easily, automatically and frequently import open POs.


In most dealerships, there are a number of cases where there is a consistent correlation between the supplier and the G/L accounting. Identify those where you are sure the correlation is right 95% of the time.


Set up a rule in your AP automation system that pics the right G/L account every time an invoice from that supplier is received.


Good AP automation systems offer accounting templates, which support fixed percentage splits between G/L accounts.


Make sure that your systems’ supplier is willing and able to work with you on a continuous basis regarding this as an INCLUDED part of your deal.


5) Does the system have to integrate with my DMS?


Yes, integration with your DMS is crucial. For the AP-automation system to generate real savings, the right information must be available and up to date in the AP system so the system can deliver 100% completed payables for automated posting in the DMS. If not, you are left with post processing in your DMS.


The essential Master Data from the DMS includes:



If you use POs, it is essential that the AP automation system have access to all open POs to match with the appropriate invoice. It is also essential that the AP automation system displays the PO line items.


When the approval and cost distribution and or PO matching is completed, the AP automation system will transfer a file to the bookkeeping system.


Any good AP automation systems’ interface will not require you to add or change information once that process is done. With a good interface your job is limited to accepting the file/batch and allowing the automated booking.


Do not get a system that requires you to add or rework information after it has been transferred to the bookkeeping system.


Get a system that can be setup in a way that ensures all information is available to complete the processing prior to transferring to the bookkeeping system. Having to rework or update after the transfer interferes with the integrity of the transaction and adds unnecessary busy work.


A good interface must be able to fully and accurately support the following


In summary, North American dealerships looking for an automated AP solution can learn and benefit from the overseas experience, thereby making the road to success shorter and the chance of accidental detours much slimmer.

Choosing a solution that is built upon real dealership experience combined with a supplier willing to share the responsibility for success is key.


We know from experience that “A dollar saved is a dollar earned” and the AP process holds great potential for just that.


What are you waiting for?


DocuBizz automates the accounts payable process in auto dealerships across Europe and North America. DocuBizz is the most seamless and efficient solution to expedite invoices and ensure you only pay what you are supposed to. Learn more at

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