If you're like most business owners, you probably dread the thought of paying your bills every month. It is a time-consuming process, but it can also be expensive if you have to pay late fees or interest charges. Many businesses have turned to accounts automation solutions to streamline the payment process and save money. So, what is accounts payable automation, and how can it benefit your business?
What is Accounts Payable Automation?
Accounts payable (AP) automation uses software to streamline and automate the AP department's invoice processing workflow. This includes capturing and digitizing invoices, verifying their accuracy, and routing invoices for approval. AP automation can also dramatically improve efficiency and accuracy within the AP department, leading to significant cost savings and improved supplier relations. Finally, it can provide greater visibility into AP spend, allowing better-informed decision-making. For these reasons, AP automation is becoming increasingly popular among organizations of all sizes.
The Benefits of Accounts Payable Automation for Businesses
For businesses, AP automation can offer several significant benefits. For instance, it can help improve efficiency and accuracy in the AP process. It can also streamline a business' invoicing and payment processes, helping cut the time and save resources required to manage AP.
Here are the other benefits that enterprises can expect from AP Automation:
1. Better supplier relations - Accounts payable automation can help businesses improve supplier relationships by streamlining and automating the payment process. This can lead to reduced processing times and better communication.
2. Increased visibility into AP spending - Accounts payable automation can provide businesses with greater visibility into their AP spending, allowing for more informed decision-making. With improved visibility into spending patterns, businesses can quickly identify areas of waste and inefficiency.
3. Cost savings - Accounts payable automation offers a cost-efficient solution for businesses by eliminating processing expenses and reducing late fees and interest charges.
4. Improved compliance - Accounts payable automation can help businesses comply with government regulations, standards, and internal controls.
5. Enhanced efficiency - Accounts payable automation can improve efficiency through invoice and payment automation solutions.
6. Reduced risk of human error - Automated invoice processing can reduce the risk of human error, leading to more accurate and timely payments.
7. Scalability - An accounts payable automation's scalability can adapt to meet the needs of any business regardless of its size. For small enterprises, the software can streamline AP operations to save time and money. On the other hand, large companies can take advantage of the tool's complex AP process management features with ease.
8. Increased productivity - Accounts payable automation can increase productivity within the AP department by freeing them up from time-consuming tasks such as manual data entry and invoice approval.
9. Improved customer service - AP invoice automation can help businesses improve their customer service by speeding up the accounts payable process. This can lead to improved cash flow and a better reputation among suppliers.
10. Greater efficiency - Accounts payable automation can offer several benefits for a more efficient AP department. With touchless invoice processing, businesses can eliminate many of the required steps with traditional manual processes to redirect their focus to their core operations.
Accounts Payable Processes
Thanks to tech automation solutions, accounts payable departments have evolved over the last few years. Before, paper-based invoices were used and had to be manually entered into an existing enterprise resource planning (ERP) or accounting system. This time-consuming and error-prone payable process is a significant source of late payments, lost invoices, and even invoice fraud. However, many businesses have switched to electronic invoices, which can be automatically imported into AP automation software.
The entire AP process begins when purchase orders are sent to suppliers. Procurement used to be accomplished manually, with purchase orders sent via fax or email. Today, however, enterprises leverage electronic procurement automation software to speed up their operations and improve communication between buyers and suppliers.
Electronic invoicing is done through an existing ERP or accounting system within the invoice approval process. This ensures that all invoices are stored in a central location and can be easily accessed by AP staff.
The existing ERP is easily integrated with an AP automation solution to provide a 'single window' for all invoices, regardless of the source. Once an invoice is received, it is reviewed for accuracy and assigned to the appropriate AP team member for payment processing. AP team members will then enter the invoice and schedule the payment date into the system.
Traditional payment processes were completed with payments either through check or wire transfer. Many businesses leverage electronic payment solutions for seamless automation and improved communication.
Choosing an Accounts Payable Automation Software
When selecting an AP automation solution, keep in mind the following factors:
Enterprise size: The software solution must be easy to use for small businesses and can be set up without complexities. On the other hand, the software should be scalable for large enterprises to suit business growth.
Budget: AP automation can be a costly investment, so it is essential to weigh the benefits of the software against the total cost of ownership (TCO). Consider the features you need and select the one that offers long-term value.
Not all businesses have the duplicate accounts payable process type of AP process. If your AP process is complicated, choose a solution that offers features that can streamline your complex operations.
Integrations: Optimise accounts payable automation software features with other business applications, such as ERP systems, project management, and CRM systems.
Customer support: Ensure the software vendor offers excellent customer support to provide you with troubleshooting support whenever needed.
Frequently Asked Questions (FAQs) about AP Automation
How does AP automation work in improving supplier relationships?
When invoices are not processed on time by the accounts payable department, suppliers become frustrated over the lack of a better system for processing invoices. Late payments also lead to supplier credit issues and increased costs.
AP automation can improve supplier relationships by speeding up the payment process, avoiding duplicate payments, skipping the tedious manual data entry processes, and reducing costs. Suppliers can check their invoice status with AI-powered invoice automation and issue supplier payment history. Businesses can also keep their suppliers informed of the latest developments within the AP process by providing updated information on purchase orders and invoices.
How can an AP software reduce invoice processing costs?
When supplier invoices are received electronically, they can be automatically imported into the AP software. This eliminates the need for a staff member to enter the invoice information into the system manually. In addition, many AP automation solutions include features that allow businesses to pay their suppliers online. Take advantage of the more reliable B2B payments networks that offer discounted rates, faster transaction settlements, and transparency. AP automation can also reduce processing costs by automating the invoice approval process. When invoices are approved automatically, staff members do not have to spend time reviewing each invoice so they can focus on more critical tasks.
How do you automate an AP process?
Companies looking to automate their AP process have different options. The first is to use an Accounts Payable Automation software. This speeds up the entire AP process, from issuing invoice receipts to facilitating payments. Another option is to use an electronic procurement solution to provide frictionless processing of supplier selection, price negotiation, and payments.
Can AP improve document management?
Yes. One of the features of an AP solution is documenting the entire invoice approval process. All invoices are automatically routed to the correct approvers and notified via email or text. This saves time for AP departments, but it also ensures that invoice approvals are completed promptly. This can help avoid late payments and control delayed payments from manual processing.
With advances in business software development, many enterprises have become drawn to automating their operations. It's time to consider an accounts payable automation software to streamline your invoice management, procurement, and payment tasks.
At Autymate, we understand that accounting systems can be complex and time-consuming. We offer AP automation solutions to streamline the process and help our clients get the most out of their accounting systems. Autymates accounts payable automation software is designed to help businesses reduce fraudulent invoices, improve cash flow management, and automate touchless invoice processing. Contact us today to learn more about our accounts payable automation services and how we can help your business.