Pevita Pearce
Clients are increasingly acquiring a proliferation of financial software, from Accounts Payable (AP) automation tools and client portals to expense management applications and artificial intelligence-powered coding assistants. This trend mirrors a common household pattern: the purchase of exercise equipment with optimistic intentions, yet without a concrete plan for consistent, long-term utilization. The consequence for businesses is a growing technology stack that, paradoxically, often fails to resolve persistent year-end closing challenges. Issues such as missing approvals, unapplied payments, and the perennial mystery of misplaced invoices continue to plague financial operations. Before a client commits to another software subscription, a more profound and valuable conversation is required, one that focuses on delivering a higher-tier service: fixing the underlying workflow. Once these processes are optimized, the decision regarding specific software becomes significantly clearer, and clients often discover they require less technology than initially anticipated.
The Anatomy of Software Failure in Disordered Workflows
When a client articulates a need for "new AP software," their underlying concern typically stems from one of three fundamental issues: protracted approval cycles, a lack of confidence in financial data accuracy, or an overwhelming volume of manual work for the finance team. While software solutions can indeed address all these pain points, their efficacy is entirely contingent upon the robustness of the existing processes. A sophisticated tool designed to route invoices through an approval hierarchy remains ineffective if the system lacks clarity on who is authorized to approve, at what financial threshold, and what contingency plans are in place for when an approver is unavailable.
Numerous engagements have demonstrated instances where significant investments in software, often costing tens of thousands of dollars, yielded negligible returns. This failure frequently occurs because the client’s core problem was a fundamental lack of defined responsibility, such as three individuals each believing someone else was accountable for coding invoices. In such scenarios, the software diligently automates the existing confusion, presenting visually appealing dashboards that mask a fundamentally broken operational process. A guiding principle for clients, and a valuable insight for advisors to impart, is this: if the current workflow cannot be clearly diagrammed on a whiteboard, the organization is not yet prepared to effectively implement the technology intended to replace it.
The Pre-Software Diagnostic: A Four-Step Process for Foundational Improvement
Advisory firms can inject substantial, measurable value by intervening before any technological expenditure. This intervention can be framed as a concise diagnostic engagement, typically requiring only a few hours of structured interviews and a single walkthrough of the actual operational process.
Step 1: Deconstructing the Actual Approval Chain
The first crucial step involves meticulously mapping the approval chain as it actually operates, rather than relying on documented policies. This necessitates examining the last ten invoices processed and tracing each one individually. Key questions include: Who handled the invoice at each stage? Who granted approval? How long did each step take? This real-world data should then be compared against the official approval matrix. In many mid-sized businesses, this audit often reveals significant discrepancies. Approval limits may no longer align with current job titles, and individuals might be found approving transactions simply out of long-standing habit rather than established authority. The chasm between documented policy and actual practice is a significant source of both financial leakage and wasted time.
Step 2: Distinguishing Workflow Deficiencies from Tooling Gaps
A rapid assessment can differentiate between problems rooted in process and those attributable to technological limitations. This can be achieved by posing three targeted questions: Are invoices being misplaced, or are they merely getting stalled in the workflow? Are payments delayed due to protracted approval times, or are cash flow management decisions the primary culprit? Is data inaccuracy a consequence of manual input errors and skipped fields, or does the existing system fail to capture necessary information? Invoices that go missing entirely or whose ownership remains ambiguous are clear indicators of workflow problems. If the assessment reveals that the process itself is fundamentally sound but simply inefficient, then a discussion about software solutions becomes appropriate.
Step 3: Rectifying Master Data and Addressing Outstanding Items Prior to Migration
The implementation of any new system is severely compromised by the presence of "dirty data." Duplicate vendor records, unapplied payments lingering in suspense accounts, and a backlog of unprocessed invoices will invariably migrate into the new, ostensibly "shiny" system, eroding user trust within weeks. A thorough data cleanup initiative—which includes reconciling unapplied payments, archiving inactive vendors, and meticulously reviewing the open payables ledger—is a tedious but essential undertaking. Clients are typically willing to delegate this critical task to a specialized firm, valuing the expertise and time savings.
Step 4: Quantifying Success: Defining Measurable Outcomes
Before any changes are implemented, it is imperative to establish clear, quantifiable metrics for success. This involves defining what "done" looks like in tangible terms. Key performance indicators (KPIs) might include the average number of days to close AP, the percentage of invoices paid within agreed-upon terms, the average approval cycle time, and the overall exception rate. Agreeing upon these baseline measurements ensures that the client is protected from vendors who may overpromise unquantifiable outcomes. Crucially, it provides the advisory firm with a compelling narrative of the engagement’s return on investment, demonstrating how the pre-automation improvements paid for themselves.
The Advisory Opportunity: Elevating the Firm’s Role
Positioning this workflow-centric approach as a distinct service offering—perhaps branded as an "AP/AR Workflow Review" or a "Pre-Automation Readiness Assessment"—offers a trifecta of benefits for an advisory firm.
Firstly, it presents a project that clients can readily understand. It has a clearly defined scope, a tangible endpoint, and a visible, impactful result. This clarity fosters trust and facilitates client buy-in.
Secondly, this initial engagement naturally paves the way for ongoing, recurring work. Clients whose workflows have been successfully optimized are far more likely to subsequently engage the firm for assistance in selecting, implementing, and overseeing the technology that will enhance their improved processes. This creates a sustainable client relationship built on demonstrated value.
Thirdly, this proactive approach significantly differentiates the firm from the implementation partners of software vendors. By arriving on the scene before the vendor, the firm establishes itself as an independent and objective advisor, prioritizing the client’s best interests and operational integrity over the sale of a specific product.
Firms that excel in this area also leverage the diagnostic phase to fundamentally reframe the technology conversation for their clients. Instead of posing the question, "Which AP tool should we purchase?", the focus shifts to, "What specific functionalities must our chosen tool provide to meet the demands of our optimized process?" This strategic repositioning elevates the firm from a mere order-taker to a trusted strategic advisor. Furthermore, this deeper engagement often uncovers adjacent opportunities in areas such as controls documentation, segregation of duties assessments, and broader close-process improvements.
A Concluding Perspective for Firm Leadership
Each year, clients will allocate financial resources towards technology acquisitions. The critical determinant of success lies not in whether they spend, but in whether they spend wisely and in the correct sequence. A carefully designed advisory engagement that prioritizes the streamlining of invoice approval and AP/AR workflows—before any software demonstrations or subscription commitments—serves as a crucial safeguard, preventing clients from automating their existing inefficiencies. Moreover, this strategic positioning places the advisory firm at the very heart of the technology adoption conversation, rather than relegated to its periphery.
The next time a client expresses the need for new AP software, consider responding with: "Let’s ensure you are fully prepared for it." This simple yet profound shift in perspective can lead to the identification of software solutions that are not only more appropriately scaled and cost-effective but also demonstrably more successful, precisely because the foundational workflow was addressed first.
About the Author:
Aamir Iqbal is a recognized authority on finance operations and process improvement, contributing insights to SaaScribe Media. His expertise spans AP/AR workflows, billing operations, and the pragmatic adoption of financial technologies. Iqbal’s work is dedicated to empowering accounting firms and mid-sized businesses to optimize their processes before investing in new tools.
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