The Art (And Science) of a Good Request For Proposal For Automating Accounts Payable

The Request for Proposal (RFP) process can be a lengthy and tedious process and if not executed well, can result in serious consequences for the project at hand and its validity. In most cases, an RFP will be issued once a project has been given the go-ahead by senior management and once a plan has been put into place, unfortunately the number chances a technology project (such as accounts payable automation) gets is often limited. When considering an initiative to deploy an accounts payable automation (e.g., scan and capture or e-invoicing) solution, it takes a lot of work and effort to get to the RFP stage. Amongst other things, buy-in from key stakeholders is needed, organizational requirements have to be determined and the business case and budget has to be approved. The most successful RFP’s are typically issued after these milestones have been accomplished. The RFP document should convey the goals and objectives of the project and include the specific requirements that the organization has deemed necessary based on research and input from cross-functional stakeholders.

So, what does a successful ePayables RFP look like? We believe the following are key components of an RFP:

There are of course standard items that should be included in every RFP. The first being an introduction to the project and an overview of the issuing company. Also important are a set of instructions that the vendor should follow if responding to the RFP. Instructions are usually be related to the format in which responses are expected, how attachment should be included, the timeline of the RFP with important dates highlighted, etc. Another key section, especially with technology projects is a project scope, which typically provides additional insight into the project which will help vendors focus their responses. This is also why an inclusion of a goals and objectives section is important. This section should provide information as to what it is the project is trying to achieve, the goals and objectives that have been set. For example, a goal may be to reduce the cost of processing an invoice or to have a certain percentage of invoices come via an eInvoicing solution or to take more advantage of early payment discounts. Also, providing a list of requirements (if they have been determined) can be very helpful to the vendor, these may also help the vendor decide whether or not to participate in the RFP.

Following the introductory information are the multiple RFP questions to better understand the vendor’s technology and its capabilities and how they match to the organizations requirements. Firstly, you want to understand the technology from an IT perspective (and your IT group should probably come up with the questions for this section). This involves asking about the system and the platform upon which it is built, the integration capabilities and the security features. If looking for a cloud-based provider, asking the right security questions is critical as you want to understand if the solution has been audited and has certain certifications, the data protection, storage and back-up policies, how user access and profiles are managed, etc.

The section around functionality and capabilities is usually the longest part of the RFP. This is where you want to get specific and the better you understand your requirements the more valuable the responses will be. The RFP Template Ardent has developed includes questions that cover the entire AP process, from Invoice Receipt and Processing to Invoice Payment. This is where the RFP should get specific as to the part(s) of the process you’re looking to automate and how. Whether looking to automate part of the AP process or the entire process, questions should reflect this and they should focus on the specific type of solution the organization would like. For example, automation of the receive portion can be accomplished by a scan & capture solution, an e-invoicing solution or a combination. Or, an organization may want the capability to conduct dynamic discounting activities with their suppliers, however not all solution providers have this capability.

Other considerations that may need to be taken into account are the global capabilities of the vendor (i.e., how many countries are they present in and have customers in, how many languages can the solution support, etc). Additionally, if a connected supplier network is of importance, the RFP should attempt to get more information around network size, buyer and supplier related fees, eInvoicing formats and more. A key aspect to drill into if looking at eInvoicing and networks is the supplier enablement process and support because the project’s success depends highly on the number of suppliers that are on-boarded and active. Lastly, a few detailed questions around the solutions reporting capabilities are also recommended (e.g., What reports are standard? What AP-related metrics are measured? Is there a reporting dashboard?)

Outside of the technology and functionality, it is important to also understand the level of maintenance and support services that are included (or additional) and how these are carried out. Are they global? Are they provided by a third-party? What does web and email support include? Also, due to the complex nature of technology implementations, understanding the vendor’s implementation process and timing can impact the decision.
Of course, key to the decision making process is the pricing. Most vendors probably prefer to display their pricing their way, however, if you’re able to provide a pricing table or matrix that they can fill out, this will really help when comparing pricing.
Last but not least are the client references. In some cases, these can have a significant impact on a decision. We suggest asking for various references, from current clients in the same industry, from previous clients and even from suppliers if considering an e-invoicing and supplier network.

The above provides a good summary of what has been covered in Ardent’s RFP Template. The template includes multiple questions for each of the areas discussed above and can be a great resource for in the initial stage of the selection process.