Managing accounts payable (AP) workflows is often a time-consuming, complex juggling act for hospitality organizations. However, automation is revolutionizing the way businesses approach this function, bringing greater efficiency, enhanced visibility, and opportunities for smarter financial management. But it’s not without its challenges. Through insights shared by industry veterans Bill Ennis, Director of Accounting – Global Field Financials at Aramark, and Colleen Manahan, SVP Finance Shared Services for Sonesta Hotels – leaders deeply immersed in AP automation – we explore how this process can unlock value and transform operations.
Automating AP = efficiency, visibility, and control
AP automation is more than swapping out paper for pixels. It’s about using technology to fix inefficiencies, foster stronger supplier relationships, and unlock actionable insights. Bill and Colleen, who lead AP transformation at Aramark and Sonesta Hotels respectively, highlighted numerous benefits derived from automation.
One of the most significant advantages is saving time. Before implementing AP automation, Bill discussed how employees spent hours manually managing invoices, chasing missing documentation, and grappling with supplier inquiries about late payments. This prevented team members from focusing on core operational tasks like delivering value to customers. By automating invoice tracking, payment scheduling, and approvals, they slashed processing time and gave employees a chance to redirect their energy toward higher-priority tasks.
Colleen shared how automation dramatically improved visibility into transactions at Sonesta Hotels. Prior to automation, 50% of invoices were overdue, and they operated with a staggering 60-day payment cycle. By implementing ReactorNet’s solutions, they pinpointed bottlenecks in approval workflows and reduced payment cycles to just 38-40 days. With clearer real-time data, they could pinpoint delays, improve vendor relationships, and effectively manage cash flow, turning AP from a pain point into a strategic asset.
An automation journey paved with challenges
No great transformation comes without obstacles, and AP automation is no exception. Both experts were candid about the hurdles their teams faced.
For Sonesta Hotels, rapid growth pushed their operations to breakneck speed. Overnight, they went from managing 50 hotels to 200. This rapid expansion created competing priorities and left little room for error. Colleen emphasized the critical role of change management, especially when introducing new processes like purchase orders (POs). Resistance from operations teams – many of whom were unfamiliar with these workflows – posed a considerable barrier. The challenge wasn’t just teaching employees to use a new tool; it was convincing them of its value.
Bill’s team at Aramark learned similar lessons about adoption. Their rollout occurred during COVID-19, a time when stretched resources and dynamic conditions left employees hesitant to add new steps to their already stressed workflows. Leadership buy-in proved essential, ensuring top-down alignment on the benefits of automation. Feedback from operators on simplifying processes was critical to refining implementation and encouraging adoption.
One pitfall both organizations encountered was how to handle exceptions. Bill described balancing automation with managing unique invoices that fell outside standard protocols. Setting clear thresholds for what qualifies as an exception and investing in tools, such as OCR technology, that streamline document capture proved pivotal.
Colleen added that aggressive policies, such as no-PO-no-pay mandates, created friction. While these measures aimed to enforce compliance, they also sparked frustration among teams adjusting to new ways of working. Over time, they realized that flexibility and collaborative problem-solving with operations teams created more sustainable results than rigid
enforcement.
The sweet reward of data
The true prize of AP automation? Data.
Bill and Colleen made it clear that while time savings and efficiency are defining features of automation, it’s the rich data that truly transforms decision-making. Automated systems offer real-time insights into expenditures, payment patterns, and vendor performance, enabling organizations to intelligently leverage their purchasing power.
For example, Bill shared how automation reduced their overdue invoices with major suppliers like Cisco from millions of dollars to under $100,000. This improved accuracy not only strengthened supplier relationships, but also allowed for critical accrual analysis. With reliable data, they could ensure their financial books mirrored the actual state of operations – a crucial factor for stakeholders and shareholders alike.
Colleen pointed out how data helps her team negotiate better deals and secure vendor discounts. With visibility into payment timing and invoice approval processes, they can strategize and align actions with procurement teams to maximize financial gains. Their team also runs fill-rate reports for suppliers, enabling them to tackle inefficiencies like contract price errors or mismatches in substitutions.
Lessons learned from the frontline of AP automation
The path to AP automation success is as much about mindset as it is about software. Bill and Colleen shared several key takeaways for organizations considering automating their AP processes:
- Define your workflow, then refine it.
Early and collaborative workflow definition sets the foundation for smoother implementation. Tailor workflows to organizational needs while making room for feedback post-launch. Remember, less complexity equals higher adoption. - Engage operations teams.
Automation touches everyone, from procurement to finance to operations. Leaving operators out of the discussion creates roadblocks. Instead, involve them early, ensure shared goals, and incorporate their feedback to create a tool that serves their needs. - Measure. Measure. Measure.
From baseline metrics like days payable outstanding (DPO) to supplier compliance and invoice cost reductions, clear performance indicators are essential. Without measurable KPIs, it’s nearly impossible to track, improve, and demonstrate progress. - Flexibility can be your superpower.
Rigid mandates like no-PO-no-pay can backfire if users feel boxed into inefficiencies. Opt for strategies that guide users toward compliance while simplifying processes for those on the ground. - Harness data for strategic growth.
Beyond time savings and cost reductions, automation-generated data can revolutionize decision-making, from supplier negotiations to forecasting financial needs. Automated analytics move your business closer to predictive, proactive operations.
A bright – and automated – future
Automation is rapidly becoming a must-have for companies that want to compete and thrive in a dynamic marketplace. By enabling invoice digitization, streamlining cash management, and providing actionable data insights, AP automation is no longer just an upgrade – it’s a business imperative.
But as Bill and Colleen’s experiences underscore, successful implementation hinges on more than just choosing the right software. A thoughtful approach that prioritizes collaboration, flexibility, and measurable outcomes will ensure that AP automation becomes a strategic advantage for your business.