Accounts payable (AP) processes are often associated with manual systems that are inefficient and tedious. Account teams spend time on boring data entry tasks, which creates opportunities for error and takes them away from more interesting work that actually contributes to company growth. Meanwhile, the manual approach can also mean you’re failing to leverage supplier relationships, save money, and manage cash flow more effectively; something that’s even more important than ever in these uncertain times.
Automating your AP processes can eliminate the need for your valuable people to manage mundane tasks, boosting time and efficiency, and saving money.
If, like most Australian organisations, you’ve moved all or most of your workforce to work from home during the COVID-19 outbreak, then you may have had to rethink your digital strategies. Technology integration is now critical to business sustainability, regardless of the size of your business or the industry you operate in.
Digitising processes and moving them to the cloud has let many businesses maintain operations and stay productive. However, as businesses adjust to this ‘new normal’, many may be struggling with managing their AP processes.
If your team is forced to print invoices, sign them, and then scan them back onto their computer before sending on to the relevant person for payment this is creating bottlenecks in the workflow, potentially adding days onto the process. If you’ve always used these same manual processes, you may feel like automation isn’t necessary or beneficial for your business. However, even if you only process a small number of invoices a month, your business could still benefit substantially from cost savings and efficiency improvements.
What is AP automation?
AP automation simply takes some of the manual paper processes and uses digitisation to streamline invoice processing workflows, eliminating the risk of human error. It creates efficiencies and gives your accounts team more time to focus on revenue-generating activities, and it reduces the total cost of processing each invoice. AP automation also increases visibility and accuracy of payments and decreases the risk of fraudulent activities through data-based insights that pick up on mistakes such as duplicate invoices in real time. It helps ensure you pay invoices on time, which lets you take advantage of discounts and avoid late-payment fees, which can also help improve supplier relationships.
While these benefits might be pretty well known, we’ve also identified five things that you may not have known about automated AP:
1. It’s paperless
An automated AP system automatically captures and stores all invoices electronically, removing the need to print and delivering a paperless process, including invoice approvals. The workflow is entirely digital, so you can continue business as usual regardless of location. By automating the entire invoice management process from purchase order to payment, you’ll gain full visibility and control at every step, and managers can accurately approve invoices remotely.
2. It reduces fraudulent activity
Automated system checks can ensure that all invoices are checked against purchase orders, and any inconsistencies are flagged. The system adds metadata to files and invoices to link customer, project and case relationships to make it easier to confirm the legitimacy of an invoice. AP automation can identify subtle details such as different bank details, small changes in URLs and email addresses and flag for manual approval, protecting your business from invoice scams.
3. It increases accuracy
Paper-based invoices and manual processes such as data entry can create opportunities for errors to occur and costs to spiral out of control. Anything from simple typos to lost invoices can mean you make duplicate payments or pay the wrong supplier. Automated accounts payable reduces error prone data capture, complicated approval workflow and the risk of human error. This saves you money and reduces the time you have to spend correcting errors.
4. It increases visibility and control
Without managers looking over their shoulder as a reminder, tasks may get sidelined or forgotten as staff members work from home. An automated AP system can provide visibility into invoice data, so you can easily see how much staff are spending, on what, and with which suppliers. This visibility can lead to informed cost saving strategies by consolidating purchases or choosing cheaper suppliers. An automated AP system can also track the progress of invoices, provide a record of the approval trail and send notification reminders for upcoming deadlines.
Importantly, an automated solution means you’re not tracking down invoices or waiting for staff members to remember to do their part in the invoice workflow. The system automatically gives you visibility of the exact stage of an invoice and also reminds people that they need to approve or review an invoice, ensuring invoices are approved for on-time payment.
5. It reduces costs
On top of the cost savings from minimised fraud, error reduction and improved productivity, the improved visibility into finance data, lets you make real-time, cost-effective strategic decisions. Additionally, AP automation solutions can be delivered using a cloud service, meaning you can benefit from affordable pricing, as well as easy deployment.
As your employees continue to work remotely, it is more important than ever to improve visibility and efficiency of your AP processes. Automated systems let you create rules in the system so employees can’t act outside your company policies, letting you maintain full control of the process.