What the Heck are Companies Buying When They Purchase Accounts Payable Technology?

Spend Matters recently ran two surveys (one to procurement/finance practitioners and one to technology providers) in preparation for the launch of the Spend Matters Accounts Payable Automation SolutionMap later in 2019. Many of our questions focused on how users and providers define the bounds of AP automation solutions since there is often a disconnect even within the vendor community — let alone the user community.

AP Automation is Many Areas in One

From a breadth perspective, AP automation technology can encompass the following functional areas on the highest level (there’s a lot of “peel the onion” here) …

• Electronic invoice capture
• Paper/PDF invoice capture (scan/capture)
• Core invoice processing
• Invoice validations/matching (e.g., match to a PO or goods receipt)
• Invoice approvals
• Supplier portal
• Supplier enablement services
• Systems integration
• Pre-onboarded suppliers
• Payment integration
• Payment

… however, in practice, the findings from our research is that the level of emphasis that users and vendors place on any one area (e.g., invoice validations/matching) can vary materially with each organization and by industry. Moreover, some providers specialize in specific areas, such as invoice receipting, whereas others emphasis deeper payment integration and even native payment capability.

Vendors are Like a Mixed Fruit Basket

To get more specific, it is even difficult to compare the providers that we typically think about as AP vendors on an apples-to-apples basis (e.g., Avidxchange, Beanworks, Bill.com, Chrome River, Concur, Corcentric, ctpsolutions, Dooap, Esker, icgteam (ALTO accounts payables), Lexmark, MediusFlow, MineralTree, Nvoicepay, OnBase, Stampli, Tipalti and Yooz) let alone incorporating broader invoice-to-pay providers (e.g., Basware, BirchStreet, Coupa, Determine/Corcentric, GEP, Ivalua, Jaggaer, OpusCapita, Oracle, SAP Ariba, Synertrade, Taulia, Tradeshift, Vroozi, WaxDigital and Zycus) or managed e-invoicing networks, such as Tungsten, into the mix.

But all of these providers are accurate when they describe themselves as enabling the accounts payable process. As are others!

To further confuse the landscape, there are payment-centric vendors that describe themselves as accounts payable automation, but really emphasize the aspects of AP centered on payment (increasingly connected with virtual card models), not invoicing receiving and processing. And then we have the broader question of trade financing providers (inclusive of dynamic discounting, accounts receivable financing, supply chain finance and virtual card models) also having often deep hooks into AP automation as well.

Confused?

We suspect that the market is. The challenge is that it’s simply impossible to compare the provider landscape on an apples-to-apples basis.

Cutting Through the Confusion

One thing stands out in doing our 360-degree due diligence on this market so far: Both procurement/finance organizations and technology providers — not to mention the consultants advising them — need a standard framework for describing all the potential elements of an AP automation solution. As do the card providers increasingly salivating at the prospects of being able to influence payment flow through acquiring or partnering with these specialized technology firms.

And this is what we will be doing as we launch Spend Matters’ deeper research into AP automation throughout 2019 — AP processing, payments, financing and all.

If you’re a practitioner interested in this topic, we encourage you to reach out, as our RFIs are already complete in the area (inclusive of all core aspects of AP automation, early payment and trade financing). And our vendor coverage on AP automation (outside of procure-to-pay and invoice-to-pay) is just starting to ramp up.

Drop a line: jbusch (at) azulpartners (dot) com.

In the meantime, we encourage you to check out our research coverage to date on the topic:

AP Process and Best Practice Coverage:

Everything Procurement Should Know About Payments

• Part 1: Procurement’s Role and P2P Case Examples
• Part 2: Best-in-Class P2P Technology Capabilities and the Reconciliation Process
• Part 3: Payment Operations — Challenges and Opportunities
• Part 4: Setting Up Suppliers for Payment — the Intersection of P2P and Supplier Management
• Part 5: Dynamic Discounting and Supply Chain Finance Models
• Part 6: Payment Best Practices and Recommendations

Other Related Coverage

• 8 Quantifiable Levers Where Invoice-to-Pay Solutions Deliver ROI — Beyond Accounts Payable (Part 1)
• 8 Quantifiable Levers Where Invoice-to-Pay Solutions Deliver ROI — Beyond Accounts Payable (Part 2)
• CPOs Owning Accounts Payable: Does Supply Chain Finance Make it Interesting at Last?
• An Opportune Time for Collaboration: Procurement and Accounts Payable
• Turbocharging E-invoicing Through the Supplier Network Value Proposition
• Exploring ‘Total Cost’ as a Productivity KPI for the P2P Process

Technology Vendor Coverage

There are hundreds of research briefs in the Spend Matters PRO and SolutionMap library that analyze procure-to-pay and invoice-to-pay providers, including recent vendor ratings based on the SolutionMap framework. Please reach out to Spend Matters for more detail.