A Guide to Accounts Payable Automation
Despite the best of efforts, the day-to-day payment procedures of a modern business can run the risk of incurring delays, confusion, and poorly handled situations.
There’s no one to blame for this. After all, to make the occasional oversight and error is only human, and in such a complicated field, we are only as good as the tools and processes at our disposal.
But with the world changing and developing faster than ever, every industry is looking for ways to utilize the advancements available to minimize risk, reduce mistakes, and simplify their processes simultaneously.
In fast-paced, stressful, and intricately detailed industries like accounting and finance, it’s no surprise to see companies looking for digital solutions to manage their workloads and help staff streamline processes that were once prone to so many unexpected errors.
For this reason, automation has seen a rise in popularity.
What is Accounts Payable Automation?
Accounts payable automation (also commonly referred to as AP automation) is a software system that integrates the online network of a business to connect teams, simplify accounts payable processes, and create a cohesive method of invoice payments and other business financial transactions to reduce the potential for mistakes and oversights.
Processing that’s Prompt, Precise, and Paperless
With AP automation, scanning and e-invoices are used through electronic submissions of forms and other documents to accomplish the needs of a company’s accounts payable processes.
Payroll staff, suppliers, and purchase orders can all exist in unison to speed up administrative tasks, highlight errors before they reach the system, and minimize the amount of physical paperwork required to achieve all of this.
The Main Benefits of Accounts Payable Automation
With new technologies and advancements being introduced to so many different aspects of a business, it’s important to understand exactly what the benefits of accounts payable solutions have to offer your specific business.
To ensure you’re on the right track, here are some of the improvements that your payments departments can expect from AP software.
Approval times, communications, and payments can be achieved with more efficiency and fewer hold-ups with AP automation. The transition between systems isn’t a concern due to the software’s ability to integrate seamlessly with existing systems.
By eliminating most of the manual processing stages, AP software can speed up all invoice processing and eliminate wasted hours between members of staff in comparison to the time it takes to process a physical invoice.
Automation helps reduce labor expenses and the costs that come with storing and postage of critical accounts data. These considerable cuts in business costs can also lead to saving more time and making better use of your resources.
By removing the chance for human errors occurring in your transactions and payments processes, you can benefit from more accuracy and avoid mistakes that could be potentially harmful to your business.
More Trackable and Transparent
Automated accounts payable processes are built with compliances within the system. This allows concerns like fraud and security issues to be tracked faster and more easily prevented. Operating with complete transparency, suspicious transactions and activity can be spotted quicker and are easier to follow.
The Three Main Steps of AP Automation
Accounts payable automation assists a business with unifying its tasks on one digital platform through the following three simple but effective steps.
Invoices and Receipts
Digital invoicing and receipts like PDFs, paper-to-electronic conversions, and B2B connections can be received through a digital supplier portal that facilitates sharing of data and financial information.
These invoices and receipts, whether paper or electronic, are scanned and processed using AI software. Once complete, these documents, dates, and other digital data pieces are stored safely and securely in a cloud.
Matching Data and Simplifying Workflow
That captured and stored data then gets quickly and intricately matched to its designated team or individual responsible for it. Invoices and receipts are paired with their purchase orders before being sent off to the relevant accounting departments for payment.
Secure Archiving and Ease of Access
A digital audit trail of every action, movement, and transaction that was taken for every invoice is then archived. These archives are protected but are easy to access when needed for any financial auditing purposes, allowing a safe but easy-to-locate method of finding older invoices on your database.
What ROI Can you Expect to get from AP Automation?
While many different factors can contribute to your return on investment, there are several ways in which you can expect to get a considerable ROI on your AP investment, including:
● Reduced financial loss due to human error
● Continual on-time payments made
● Reduced time and savings for labor costs
● Decreased staffing costs
● Increased discounts for early payments
● Fewer invoicing processing costs
Aside from the ROI benefits, you can also expect to achieve a more streamlined process, easier auditing, increased employee productivity, and customer satisfaction.
Commonly Asked Questions about Accounts Payable Automation
Inevitably, with so many variables to consider and so much information at stake, businesses will have some questions to confirm, reassure, or clarify their concerns and queries. Below are the most commonly asked ones regarding AP automation.
Will AP automation work with our existing accounting systems?
Yes. AP automation solutions are designed to integrate easily with ERP and other financial systems, facilitating integration and safer data flow in real time.
Can AP automation prevent fraudulent acts and duplicate payments?
Digital checking means that every invoice is scanned, checked, and flagged when duplicates are found. This innovative method means duplicates are prevented earlier instead of after the fact.
With faster and more efficient processes, you’ll be able to pinpoint suspicious activity, identify fraudulent practices, and bolster the security of your company’s financial tasks.
Can my suppliers use this to submit invoices?
Your suppliers will have the ability to interact with these automated systems via their supplier hub. From this portal, they’ll be able to constantly check the status of their invoices, submit new ones, and reduce administrative inquiries.
How can AP automation solutions help with invoice-related communications?
It can quickly help resolve invoice-related queries and concerns by providing you with a detailed and accurate record of all dates, questions, and authorizations regarding all your invoices. These are easily accessible for all parties to get everyone on the same page faster and improve the overall efficiency of your business needs.