We are living in the smartphone era, yet many businesses are still clinging to the age-old practices manual data entry and invoice processing. One of the issues facing accounts payable department is tedious invoice processing. The longer it will take to process invoices, the higher will be your cost-per-invoice. In addition, if the delays put you behind on payment deadlines, you may spoil relationships with vendors. In times when technology has made work and life ridiculously easier, your Accounts Payable function must reflect that. Clearly, you need to speed-up your invoice payment system, and the best way to do this is with automation.
The pace at which accounts payable automation is gaining grounds, tracking down invoices and entering data into multiple systems will soon become out of style. The Accounts Payable automation will result in invoice processing that is faster than manual work. Faster approval time will help in ensuring that invoices and purchase orders find their way through the approval matrix quickly. This will give businesses better control over cash flow.
According to a study by Aberdeen Group, automation can take invoice processing time down significantly. In addition, automation can also increase the number of invoices processed per employee by more than four times. In other words, if your AP department was earlier processing 1000 invoices per employee, automation can make that number jump to more than 4000 invoices per employee. By automating accounts payable function, businesses can simplify processes and offset their costs with savings in time and resources. According to another study, businesses can reduce their invoice processing costs by up to 70 percent through automation.
In addition to time-saving, automation will help businesses save money by improving cash-flow, strengthening vendor relationships, and freeing up employees for other revenue-generating activities. And you do not have to wait long to start noticing these benefits. If you partner with the right accounts payable outsourcing company, automation will be easy to set up, and you will start seeing the benefits right away.
Benefits of Accounts Payable Automation
If you are still not convinced about automating your AP process, here are some more reasons:
Accurate Processing: Automating your AP processes will help you do away with a human error by eliminating overpayments and duplicate payments. The system will alert you to overcharges and duplicates and, and remind you of upcoming due dates. Automation will also make auditing, budgeting and reporting far more accurate and timely.
Better Control: Automation can help finance teams save time and effort by allowing full access to the payment cycle, monitoring workflow progress and sharing critical data throughout the organization. This means that teams will be able to extract the data they need to monitor and control finances in real time, which is not possible in manual invoice processing.
Greater Insight: Greater visibility and control over the processes will allow your teams to predict financial outcomes and make informed business decisions accurately. The automation solutions will give them the ability to see the bigger picture, leverage real-time dashboards of key performance indicators, focus on problem areas, and identify noncompliance with company policies.
Integration with existing systems: Your team will not have to switch back and forth between different applications or enter data multiple times into different systems. The automation solutions will seamlessly integrate into your existing databases, financial systems, and enterprise resource planning (ERP) systems.
Boost Business Relationships: A happy vendor is a repeat vendor! Settling payments faster and with more accuracy will help to build stronger and loyal relationships with your vendors. Automation solutions will enable faster information flow between departments and agents. This will result in a quicker and precise response to customer inquiries, which will reflect in the form of a streamlined procure-to-pay process.
Better Utilisation of Resources: The process of processing and storing invoices is a long and tedious one. An automated system will free up your team, enabling them to focus on value-generating activities rather than on chasing up invoices and manually processing data. According to a study by the Journal of Accountancy, jobs in accounting will evolve as more businesses automate their processes.
The way a business manages its accounts payable has a direct impact on the health of its cash flow. Undoubtedly, improving your AP function can significantly improve your bottom line. The combined benefits of automating Accounts Payable function are too significant to be ignored. However, it is essential to look for accounts payable outsourcing companies that have the right mix of expertise and capability to enable you to leverage the real value of digital transformation.