A survey from Forrester, “Forrsights Software Survey, Q4, 2012,” notes that MBs (medium-sized businesses) have become more open to looking beyond premise-based solutions for business applications. Many are already using SaaS for customer relationship marketing (CRM) and HR; and now, based on this survey, they are planning to double that number by 2014, from three applications to seven or more.
There are a number of reasons this is happening, but probably the two most important are reducing costs and realizing better utilization of on-premise resources. Doing more with less is a fairly consistent theme in the business universe, especially for small and medium-sized companies. And it’s even more important when it comes to back-office functions like accounts payable.
How does SaaS help turn the above reasons into realities, specifically when it comes to AP?
In most companies, there is ongoing demand for internal IT resources; so, when choosing who gets dedicated time, those projects seen as customer facing or revenue generating get the largest chunk of that time. Low value-added projects, or those assumed to be low value-added, are given short shrift. That’s certainly true for AP. In commenting on the increase in AP automation, Paystream Advisors in their e-Invoicing Adoption Benchmark Report released in 2012 noted that SaaS allows companies to leverage technology hosted by a service provider, eliminating the need to purchase any hardware or software, and it limits the need for IT involvement. Study after study confirms this desire to have minimal IT involvement. The AP Cloud Study 2012, published by The Institute of Financial Operations, found that, of the accounts payable professionals surveyed, “Minimal IT Involvement” got the largest response to the question, “What do you see as the biggest benefit of cloud services or software-as-a-service for AP processing?” 34.1% answered the question that way, compared to the next largest response, which was only 22%.
As far as reducing overall costs, AP automation through SaaS is a subscription based service that is scalable, easy to implement, and requires low upfront and reduced operating costs. SaaS providers also upgrade their solutions regularly as part of the subscription fee, again with little to no on-premise IT involvement, another cost-reducing benefit.
Then, there is the intangible benefit of freeing up internal staff so they can focus on innovative ways to help the company grow. Every company needs structure and compliance, especially in their finance departments; for medium size enterprise lacking deep pockets, this can often be a challenge. The right SaaS AP Automation Workflow solution streamlines the invoice approval process by eliminating paper and reducing processor involvement. A company that normally processes 5,000 invoices a month may have multiple processors involved in this back-office function. Some AP automation workflow solutions enable each user to process more than 5,000 invoices per month. The other employees can then focus on higher-value tasks.
We haven’t even mentioned the added benefits of full, real time visibility, discount capture, dashboards, etc. But suffice it to say that these added benefits make SaaS for AP a natural fit, regardless of the size of the business.