Accounts Payable automation is part of every organization’s digital transformation strategy and involves converting manual, tedious AP processes (such as invoice approvals, invoice capture, check requests, and payment processing) into streamlined electronic workflows that improve efficiency and accuracy within the department, enhance vendor management, and decrease overhead costs.
60% of professionals define AP automation as the streamlining of the full end-to-end accounting process, while 40% define it as streamlining only a portion of the process. Before we get into the specifics, it’s important to acknowledge that every Accounting department operates differently and requires various solutions. Some AP departments may only need point solutions to automate portions of their workflow, such as invoice processing. Other departments may need a more robust solution that addresses their entire process from start to finish.
Accounts payable automation provides more transparency and centralized document control over departmental processes while reducing the risk of manual error and improving cash flow. You can capture documents, approve invoices, authorize payments, and pay/receive payments faster with less room for error.
Benefits of AP Automation
Decreased labor costs
Manual processes are the biggest contributors to high AP processing costs. Between downloading and printing attachments, document scanning, manual data entry, searching for lost invoices and purchase orders, and more.
The Institute of Finance and Management (IOFM) reports that 63 percent of companies say reducing invoice-processing costs is their number one priority. Automating the process means extracting invoice data, pairing invoices with purchase orders, and searching through archived electronic records can be completed faster and more efficiently.
Faster cycle times and improved cash flow
Automation gives you control over invoice processing and when you pay your vendors. The average company takes 16 days to process invoices and slow cycle times can have a negative effect on business. Creating a customed workflow will improve processing and approval times, which will remove bottlenecks and make you eligible for earl-pay discounts.
Think of the most time-consuming aspects of accounts payable
processing like data capture and entry – automating the process will cut the time spent completing these tasks in half.
Improve employee satisfaction and vendor management.
Organizations are always seeking new ways to improve employee satisfaction and company culture. If your AP staff is struggling to collaborate, communicate, and complete manual processes efficiently, they may be lacking some of the necessary tools required to complete responsibilities in a timely, error-free manor. Invoice bottlenecks, manual errors, data entry mistakes, etc…all factor into employee satisfaction with the AP department.
Make automation a priority this year by analyzing your current processes and identifying areas for improvement. As the number of vendors and paperwork in the AP system increases, staff may be feeling overburdened and stressed. Some companies are unable to support this rapid growth with a small or mid-sized team alone. Streamlining AP processes with a customized electronic workflow
can relieve the heavy manual workload staff is experiencing, therefore creating a more productive, satisfying work environment for staff.