AP Software - Yay or nay?

Chayim Messer
5 days ago
3 min read

Everyone wants a tech stack. It's cool, it makes your company appear trendy, and you can implement some very sleek processes with them. The problem is that there are so many out there and it's hard to choose the right one for you.

Do you need software?

The first question that a business owner needs to answer is - do you need AP software to manage your business? To answer that, you're going to need answer two questions:

How many invoices do I need to process per month?
Who needs the invoices after I'm done with them?

Invoice volume

Let's start by answering the first question - how many invoices are you processing per month? The answer lies in the size of your business. Small businesses might only have between 10-20 invoices on a monthly basis that need to be processed, and many are probably on a credit card. Included that roughly half are most likely autopayments, it doesn't really appear that there's a lot of work.

If you're able to look at any transaction on your credit card statement or in the bank and immediately know what it is, it's not likely an invoice processing solution is necessary for you. That's because you're still in control. You're making payments, advising the bookkeeping, and have full understanding of your business.

My advice is that once your company hits the 50 invoice mark, you should start considering an AP software.

What's next with this invoice?

Even if you have a small volume of invoices, you might want to consider an invoicing software if you, as the business owner, are not in control of your AP process. You might have an office manager who handles payments or you might outsource this to a bookkeeper who needs this information.

While your AP might be small, your business might be large and your time is valuable. AP software should be ensuring that you're managing your time effectively, managing your resources and staff effectively, review inventory, and making sure that you can approve payments easily.

So I want a software, which one is right for me?

Asking which software is right for you is similar to asking for a recommendation for a doctor. There are so many out there and many of them are great, some are terrible, and others provide you with services you're not interested.

Here's what you should be looking for in software so you choose the right one for you:

User experience. Do you like how this software presents itself? Is it easy to enter invoices and search for invoices, prepare approval workflows?
Integrations. Good invoice software will integrate with your accounting system. For many, that's QuickBooks. For others it might be SAP, NetSuite, Priority, or any other system. Some accounting software integrates easily, others might require a consultant to prepare APIs and Technology.
OCR (Optical Character Recognition). The best software comes with OCR but not all of them do come with it standard. Good software comes with email acceptance and possibly SMS and WhatsApp.
Payment integrations. Some invoicing platforms also offer Credit Card, ACH and Check Writing services. If you have a large quantity of payments that need to be made, having a good software which seamlessly integrates with your payment methods will reduce your time spent on administration and help to reduce errors.
AP Reporting. Your AP software should give you the reports you need to stay on top of your AP. Vendor reports, payment amounts, due dates, processing dates, are information that you need to ensure that you're making payments on time and to determine whether you need to make changes to your vendors.
Inventory. If you're a store or otherwise have inventory, there specialized software that can help you manage invoicing down to the barcode level.

Cost, benefit, and investment

The final item is how much should this cost you? While there is a market for this, there is no set amount which is "right".

Some accounting software offers this for free or as included in their packaging.
Basic invoice processing software can run as little as $200 per month depending on volume
More substantial software, such as inventory management, AI and machine learning, will usually have additional costs added to them.

You could also outsource your AP completely. Agile Accounting Services offers AP processing for as little at $150 per month. We bring the staff and software making sure that you can focus on your business.

To conclude

Investing in an invoicing software is a good idea if you have the volume or the approval requirements. Make sure you choose a software which has the right mix of features and fits the price range and investment appetite you have.

Contact Agile Accounting Services at (646) 760-2123 or chayim@agileaccountingservices.biz. We can help you determine which software is right for you and hep you implement it