September 13, 2022 | Accounts Payable
The amount a company owes its vendors is known as accounts payable (AP). The accounts payable team's responsibility is to ensure the company pays its invoices promptly.
Although accounts payable was seen as a tactical and transaction-based manual process, it is now a strategic business function focused on resource optimization, enhanced savings, and developing and enhancing supplier relationships.
Automating accounts payable boosts the savings opportunity for a business by removing inefficiencies of manual processing.
Here are six ways AP automation benefits businesses:
AP automation enables speedy processing of invoices and timely vendor payments. Modern AP software extracts the most pertinent information from invoices using artificial intelligence (AI), machine learning, and optical character recognition technologies . It can also correlate digital invoices with purchase orders and ensures that payables are channeled through established AP processes in the event of a mismatch.
Switching from paper invoices to digital ones also enables instant and automatic approvals, making processes more efficient and sustainable and eliminating human error.
Paying bills on time fosters trust and strengthens connections with suppliers. Additionally, it enables procurement to benefit from discounts due to early payments.
Best-of-breed AP Automation Software offers complete procure-to-pay features, including accepting invoices from different media, matching invoices, authorizing payments, stopping excess or duplicate payments, and more. Additionally, a company can design workflows unique to a user, provide approvals and alerts, and define reports due to the platform's high degree of customization and flexibility.
Advanced payment controls with two-factor authentication and duty separation are made possible by AP automation software, flagging exceptions to be reviewed by authorized persons. The likelihood of fraud is reduced since different individuals authorize invoices and payments.
Accountants and business leaders can easily see the big picture with increased visibility into the accounts payable process. They can have real-time dashboard reporting of key metrics to retrieve and present critical information quickly and locate instances of expenditure policies and business rule violations.
Businesses can automatically import or export relevant information with AP automation, which is simultaneously accessible to all parties involved. This improves cross-functional visibility and real-time collaboration internally and externally, promoting long-term, meaningful relationships with partners.
AP automation records the history of each processed invoice, from the time it was received to the modifications made during processing and helps determine the validity of all transactions. As a result, accessing real-time information and cross-verifying, the purchase data is made simple for auditors. Every invoice also includes an electronic record of each approval, making reporting, budgeting, and auditing far more efficient and accurate.
The AP teams accomplish improved compliance with tax laws and industry regulations because every invoice is processed using a predetermined, automated process. Additionally, real-time data and analysis ensure that month-end financial closures happen more quickly.
It's critical to acquire in-depth information about accounts payable workflows, the AP team's pain spots, the issues they encounter during AP activities, and their needs to accomplish the organization’s long-term objectives before investing in AP automation software. The organization must choose AI and ML-driven software with an OCR module for scanning documents. The software should be cloud-based, scalable, and seamlessly integrate with ERPs.
AP automation is used to describe accounts payable software that automates procedures, reduces turnaround time and invoicing costs, and minimizes paperwork to streamline payments. Additionally, AP automation reduces operational and compliance risks.
Artificial intelligence offers the following features:
AP automation must be scalable and cloud-based, enabling new features to become accessible automatically and allowing for seamless integration with ERPs. Such a software can handle any challenging AP duty now and in the future without the need to invest in upgrades, enabling enterprises to continue their long-term digital transformation journey.