There are a number of reasons businesses decide to upgrade their ERP, but we are seeing customers increasingly prioritize functionality for Accounts Payable (AP) and finding automation tools that can reduce the load on their AP teams. And part of that is determining where the ERP functionality ends and where a specialized solution is needed to achieve more complex goals.
Companies both in need of an ERP upgrade and those already on a modern ERP should take the time to consider whether they will require an external solution in addition to their ERP.
For many, the logical step is to include advanced AP and payments requirements within their initial ERP selection. During the needs analysis phase, companies sometimes uncover more complicated requirements that go beyond the scope of most ERPs, such as greater fraud mitigation, advanced invoice automation, or mass payment processing. When these requirements are essential to business as usual, there is a case to be made for a specialized, third-party solution.
Depending on the vendor or implementation partner a business selects, the recommended solution will vary. Some vendors have strategic alliances in which they have embedded solutions directly within their platform. This enables customers to “flip a switch” when the more advanced capabilities are needed. Others have partnerships and have developed pre-built integrations with Independent Software Vendors (ISVs) who specialize in certain functionality or industry needs.
We recommend leaning on your partner or vendor during this time for best practices and recommendations. Fortunately, this process does not need to be as vast as the initial ERP selection, and by relying on the experts, you can narrow your shortlist of solutions much faster based on industry, size, needs, and core ERP solution.
Remember, you must include these needs in your communications with potential vendors and implementation partners because it will enable them to include the right solutions in final demos.
Alternatively, a business may determine their core ERP does not need to be replaced, but that they do need a new, more robust AP and payments platform. In this scenario, it is important to identify and document exactly why you need an external or outsourced solution.
The emergence of manual processes or struggles related to late payments and strained vendor relationships, even after migrating to a modern ERP, can be signs an organization needs a more advanced solution. More specifically, if those obstacles are preventing the business from delivering to customers or are holding them back from future growth.
There are a number of “red flags” associated with the need to pursue a third-party AP automation and payments platform solution to supplement ERP functionality. While ERPs are great systems of record, they are not developed for capturing high volumes of invoices, managing international multi-currency payments, or managing the relationships between suppliers.
High Volume of Invoices – A company processing a significant number of invoices over the typical threshold for an ERP can overwhelm the system. Ultimately, this results in manual processes to enter data and make payments.
Payment Method Diversity – Some operations require a system to manage ACH, virtual card cash-back rebates, international wires, checks, and other payment methods. ERPs can struggle to effectively account for and mix various payment methods without a third-party tool.
Global Payment Needs – A company with a global scope that must comply with various tax compliance laws, banking rules, and juggle multiple currencies often faces issues within their ERP that require a third-party solution.
Supplier Management – ERP alone does not offer a way for vendors to enter a self-service portal to interact with a business, pay invoices, or track statuses. In the modern age, vendors can become frustrated by outdated processes, which can indicate a need for a more advanced AP and payments platform.
There are a number of solutions on the market that offer different services depending on your business’s needs and priorities.
A payments platform, simply put, is a digital solution enabling organizations to “move, track, and manage money.” It simplifies the process of managing money because it removes traditionally manual processes around cash and checks. The data is synchronized to the business’s ERP for greater organization and maintenance of the general ledger.
“Payments automation is the use of software, validated banking data, and managed service to execute outbound B2B payments (ACH, virtual card, check, and wire) from a single approval workflow, then post the results back to your ERP. It's the money-out leg of accounts payable, separated from invoice handling and treated as its own discipline. AP automation runs the invoice; payments automation runs the disbursement” (corpay.com).
Corpay, a global provider of payments and AP automation, is one of the foremost vendors in the space, developing specialized solutions to help businesses manage and pay for business expenses in a simple, controlled manner.
AvidXchange primarily offers invoice, purchase-order, and payment automation to small- and mid-sized businesses. The platform aims to eliminate manual AP processes while allowing companies to retain their existing accounting systems. Its integration ecosystem and supplier network also make it a strong solution for organizations with industry-specific accounting requirements.
Organizations should add AvidXchange to their selection shortlist if they need:
Companies seeking to automate Accounts Payable without replacing their existing accounting solution can consider AvidXchange. It is a great option for SMBs with decentralized approval processes, large supplier networks, or specialized ERP environments that need stronger invoice and payment automation.
BILL primarily delivers invoice processing automation, approval workflows, and electronic payments to small and mid-sized businesses. The developer of the platform prioritized ease of use, with a goal of eliminating paper invoices and manual check processing for global finance teams while improving overall visibility for financial leaders into AP processes.
Organizations should add BILL to their selection shortlist if they need:
Companies looking to scale rapidly while achieving greater control over cash disbursements should heavily consider BILL when evaluating external financial automation solutions. It is an ideal option for operational unification across Account Payable, Accounts Receivable, and expense management.
Alternatively, Corpay has a broader business payments perspective. While they do, of course, focus on AP automation, Corpay has expanded significantly over its 26 years of delivery, offering commercial payments, virtual cards, expense management, cross-border payments, and foreign exchange services on an international scale.
Corpay is a strong contender for businesses in need of:
Corpay offers a broader portfolio of solutions that cater to mid-market organizations and large enterprises. Companies conducting business across borders, managing industry-specific expense controls, and looking for robust AP automation capabilities should look closely at Corpay. Even if you don’t use Corpay’s AP automation software, you may still consider them for their other services.
Tipalti is a solution for end-to-end AP automation for mid- to large-sized businesses, particularly those with complex, multi-entity, or international operations. The platform combines supplier onboarding, invoice processing, approval workflows, tax compliance, payment execution, and reconciliation within a unified environment.
Organizations should consider Tipalti if they need:
Companies looking to scale AP operations without increasing the number of employees can and should consider Tipalti. It is an ideal option for organizations with global supplier networks, high invoice volumes, multiple legal entities, or substantial tax and regulatory requirements.
Generally, evaluating any financial automation solution and making a decision depends on your organization's priorities. If invoice approval and AP workflow automation modernization are your priorities within the SMB space, BILL may be the right fit. If your organization casts a larger net into international payments, commercial cards, or broader payment optimization needs, Corpay may offer a better path to growth. And these are just two examples of available solutions, with many other viable options. Big players like Tipalti and AvidXchange also serve the unique needs of businesses looking for more advanced AP automation.
With so many solutions available on the market and moving parts to manage within your existing ERP, it can be difficult to identify the right strategy and determine your need for a third-party financial automation solution. If your business needs help overcoming pain points related to manual financial processes, reach out to the experts at ERP Advisors Group for a free consultation.