What Will the Future of Accounts Payable Automation Look Like for SAP Customers?

04.05.2022

Topic: AP Automation | S/4HANA | SAP

Updated on April 12, 2023.

In January 2021, the global ERP provider SAP announced it wants to accelerate the digital transformation of its customers with its new program "RISE with SAP". The program aims at facilitating the migration from on-premises installed systems to the cloud. Since then, many businesses that have complemented their SAP setup with an accounts payable (AP) automation solution have been wondering: what will the future of AP automation look like for me? We recommend you continue reading to find the answer.

When it comes to AP automation, deep integration of the software into the existing SAP system is a necessity. It enables businesses to increase compliance and ensure that all processes are running smoothly. The benefits of an SAP-integrated solution are manifold:

• Better acceptance: Employees prefer to use a system with which they’re familiar. With an integrated solution, they don’t have to learn new ways of working. Instead, the AP software will feel just like SAP.

• Optimized data quality: Integrating directly into the ERP environment also means eliminating the need for data transfer between systems. This increases both data quality and accessibility.

• Greater transparency: Being able to retrieve AP data directly from SAP increases transparency and allows employees in different departments to always be up to date.

• Increased security: When using the 3-way-match method, the integrated AP solution automatically checks for correspondence between the purchase order, goods receipt, and invoice. It is the most effective way to counter AP fraud.

• Enhanced compliance: An integrated solution can map the entire AP process, including invoice receipt, data capture, approval, release, and archiving. Recording all steps within one system leads to more traceability, which means better compliance.

However, when opting for an (integrated) automation solution, the challenge lies in ensuring that it consistently fits the release of your ERP system, meaning the current but also future versions of SAP. Why is this such a crucial topic?

SAP Then and Now

In the past, the term “SAP” was basically synonymous with the company’s most widely distributed product, SAP ERP. It has been around since 1993 and the system’s core remained unchanged for many years. Of course, new releases of SAP ERP were published on a regular basis. However, while new releases and updates brought about advances in usability, the essence of the product did not undergo substantial changes. As a consequence, it was easy for users to jump from one version to the next because they could trust that basic functionalities remained stable. This also meant that the requirements for SAP-integrated AP automation software were rarely altered.

In the last few years, however, an important shift has taken place. SAP no longer stands for just one specific system or product. Instead, the company has broadened its offerings and now provides different systems to its users. When we look at our customer base of over 1,200 businesses around the world, we can see a wide variety of setups:

• There are companies that still use the classic SAP ERP system, which is installed locally on their premises.

• Others have extended their local SAP ERP system with a new HANA database.

• Some companies have performed the transition to S/4HANA and installed the system locally on-site.

• Still other companies use S/4HANA Cloud (private or public edition). In this scenario, the system is hosted directly by SAP and provided to the user via the internet.

Shorter Innovation Cycles and Increased Standardization

Contrary to the classic SAP ERP system where new versions did not differ much from each other, S/4HANA works with considerably shorter innovation cycles. Consequently, there is a new version every year that delivers important changes and software updates.

In addition, the transition from locally installed systems to the cloud further accelerates the speed with which new releases are published. So, when opting for S/4HANA Cloud, a company might receive new versions multiple times per year.

Shorter innovation and release cycles within the SAP environment require AP automation solutions to adapt in the same cadence to ensure full compatibility and flexibility.

In general, we observe that an increasing number of companies want to become more flexible. One way to achieve this increase in flexibility is by simplifying processes and moving away from complex systems to “standardized” software solutions – which, in the case of SAP, means migrating processes to the cloud instead of working with locally installed systems.

Tips for Ensuring Long-Term Compatibility

If you are looking to future-proof your finance department, the best option is to choose an integrated AP solution that moves in parallel to SAP, i.e., following the approach of shorter release cycles and more standardized processes in the cloud.

When searching for software to automate your accounts payable department, have a look at the manufacturer’s strategic roadmap to find out whether they’ll be able to support your business not only today but also in the long term.

Instead, if you already have an AP automation solution in place and have not yet migrated to S/4HANA, make sure your current software enables this transition. Check to see if you can move your processes to the cloud to ensure long-term compatibility between your SAP setup and your AP automation solution.

Customers of SAP can trust that their processes will be streamlined and future-proofed, i.e., standardized, by following the company’s program “RISE with SAP” – that’s what it was made to do. When it comes to your AP automation, you’ll see similar changes towards standardization, as many AP software vendors will align their strategies to that of SAP. Choosing an integrated solution, therefore, is your best shot at staying ahead of the game and being able to adapt your processes to SAP’s current and future developments.