Accounts payable automation, or AP automation, involves the use of digital technologies to automatically capture, process, and approve invoicing data. Its main aim is to reduce manual efforts while expediting the processing of invoices on a larger scale.
Here are 18 reasons why you are missing out if you haven’t yet automated your accounts payable process:
1. Reduce the Risk of Errors
Manual processing of invoices often leads to human errors, whether it’s during data entry into computer systems or handling physical mail. These mistakes can originate from both internal and external parties. Implementing an AP automation solution speeds up the initial stage of processing and ensures accurate data collection from invoices, minimizing costly faults.
2. Significant Cost Savings on FTE (Full-Time Equivalent) Costs
Handling invoices manually can be expensive, especially when mistakes or exceptions need addressing. The cost per invoice may amount to $100 or more. AP automation significantly lowers the cost per invoice, as most invoices require minimal human intervention during processing and approval, resulting in substantial financial gains.
3. Save Time and Effort in Invoice Processing
AP automation replaces time-consuming manual processes with more efficient digital ones. Character recognition software can quickly scan bill headers and line-item data, while payables are sent for approval to designated teams, expediting the entire process.
4. Resolve AP Bottlenecks with Real-Time Collaboration
Automation systems for accounts payable enable real-time collaboration among stakeholders involved in payment schedules. Anyone with an interest in an invoice can access and review it simultaneously, regardless of their location. This streamlines the resolution of discrepancies and accelerates the approval process.
5. Effortless Audit Trail
Electronic invoicing systems shine during audits, providing a clear trail of an invoice’s journey from acceptance to payment. Digital audit trails make it easier to detect any fraudulent activities or suspicious behavior within the accounts payable department.
Download – Whitepaper (Turning Accounts Payable into Valuable Insights)
6. Insights into the AP Process
Detailed dashboards offer a clear overview of the AP process, allowing easy tracking of an invoice’s status and identifying potential delays. Real-time access to data enables accurate reporting and analysis for better business decision-making and cost-saving opportunities.
7. Prevent AP Fraud
Automated accounts payable systems regulate access to invoices, significantly reducing the risk of fraud. The software detects fraudulent invoices, duplicate payments, or any suspicious activities, ensuring compliance, cost control, and accountability.
8. Track and Recognize Top Performers
AP automation facilitates performance management in the accounts payable team, providing improved dashboards to measure staff efficiency. Managers can monitor team and individual performance more effectively.
9. Enhanced Data Access and Empowerment of AP Workers
AP automation centralizes all financial information and invoices, making it easily accessible to accountants when needed. The software acts as a single source of truth, simplifying data retrieval and allowing employees to focus on productivity.
10. Improved Work Satisfaction
Automating data entry tasks reduces the monotony and tedium associated with manual input. Accountants can enjoy a more varied and inspiring workload as a result.
11. Better Cash Flow Management
AP automation expedites invoice processing and payment, allowing companies to manage and forecast incoming and outgoing cash transactions more accurately. This results in improved financial stability and cash flow management.
12. Enhanced Customer Satisfaction
Efficient accounts payable processes prevent delays and errors, ensuring timely payments to vendors and ultimately satisfying both employees and external stakeholders.
13. Simplified Compliance
AP automation helps meet regulatory requirements while saving time and minimizing errors. The automated audit trail ensures accurate and foolproof compliance reports, and the software can be configured according to specific standards.
14. Strengthen Supply Chain Relationships
Timely payments through AP automation reinforce positive business relationships with suppliers and vendors.
15. Effective Budgeting
Automated accounts payable processes provide total control over clearances and accounting regulations. Multiple AP automation technologies support physical or virtual cards with restrictions and customized budgets, offering real-time approvals for seamless financial management.
16. Early Payment Incentives
Some AP automation systems allow offering incentives for early payments, creating opportunities for discounts and increasing revenue.
17. Maintain a Strong Credit Score
Timely payments positively impact a company’s credit score, facilitating access to business loans, credit cards, and attracting new vendors.
18. Support Hybrid Working
AP automation simplifies and streamlines the approval process in both office-based and remote work settings, fostering flexibility and efficient collaboration. Incorporating financial technology, or FinTech, has revolutionized AP teams, freeing them from outdated manual processes.
By selecting the best accounting automation software, you save time, effort, and costs and elevate your company’s culture and reputation.