6 Ways Automation Makes Life Easy for Accounts Payable Teams
- Paper invoices and manual processes have long defined the accounts payable process
- Automation, aided by the latest AI, can transform the way AP teams currently work
- It saves time, reduces costs and eliminates processing errors
In many enterprises, the accounts payable (AP) team continues to rely heavily on paperwork and time-consuming manual processes. Naturally, this impacts the team’s productivity and creates room for errors and duplications.
Manual AP processes eat up valuable time and drain resources
Sixty percent of respondents in a recent Ardent Partners survey opined that invoice and payment approvals take too long. A high percentage of exceptions, outdated systems and too much paperwork make an AP professional’s task extremely challenging. Add to this the responsibility of managing supplier relationships, which is often shared between AP and procurement teams.
As a result, paper invoices are sent back and forth, often leading to delayed payments, missed discounts and strained relationships with vendors.
Invoice processing costs add to the department’s inefficiency, with an average invoice costing $12.88, according to the report. There is little doubt that automating this entire process presents a huge savings opportunity for AP teams.
Here are six ways accounts payable automation can benefit businesses:
1. Process invoices quickly
Time is of essence in accounts payable. Automation ensures invoices are processed quickly and vendor payments are made on time. Powered by artificial intelligence (AI), machine learning and optical character recognition technology, modern AP software extract the most relevant data from invoices and can also match digital invoices with purchase orders. Timely payments help build trust and improve relationships with vendors. It also allows procurement to cash in on early payment discounts.
2. Say goodbye to paperwork
Automation eliminates the need to maintain and check paper records, thereby reducing the complexity of invoice processing. Process efficiency increases as paper invoices are replaced with digital invoices that can be automatically approved within minutes. Today, cloud-native AP software offers easy-to-use and configurable dashboard functionality that automatically rejects bad invoices, detects duplicates and auto-routes invoice mismatches for resolution.
3. Streamline processes
An advanced AP automation platform provides full procure-to-pay functionality, with capability of item search, invoice matching, payment authorization and much more. In addition, a highly customizable and configurable core AP functionality enables a business to create user-specific workflows, approvals, alerts, policies and reports.
4. Prevent fraud
AP automation software enables advanced payment controls. For instance, with two-factor authentication, payment approvers need to enter secure codes sent to their mobile device to authorize a payment. Likewise, automation enables segregation of duties. This again minimizes the possibility of fraud as different people approve invoices and payments.
5. Simplify audit
AP automation helps determine the authenticity of all purchases and tracks the entire history of how and when an invoice is processed. This includes information about when the invoice was received, how it was processed and changes made. This makes it easy for auditors to access real-time information and cross-examine the purchasing information. Additionally, every invoice has an electronic record of all approvals.
6. Improve compliance
As every invoice is processed via a set, automated process, AP teams achieve higher compliance with tax laws and industry regulation. In addition, cross-functional visibility and collaboration improve, particularly between AP and procurement teams.
In short, automation can trigger a complete transformation of AP processes. Increased deployment of technology in accounts payable can create opportunities to optimize workflow and drive business value.