By: Marissa Levin
Today, automation is one of the major trends affecting employees all over the world. For a finance leader, it is necessary to understand what benefits automation can bring for the company and the team. Accounts payable function has been conventionally slow and paper-based. Whether it is about entering and coding invoices or circulating records for approval and paying suppliers, there are several accounts payable processes that can gain significantly from automation. This is the reason organizations are planning to adopt accounts payable automation in the upcoming years.
Accounts payable automation software helps to minimize paperwork and manual data entry that reduces errors and saves time. Here, we present a list of some other reasons you must consider automating AP.
Gain Complete Visibility of Your Accounting Team’s Activities
With electronic accounts payable, invoices can no longer remain out of sight of an approver and sit on their desk for a long period of time. Accounts payable solutions increase transparency by allowing you to monitor the activities of every user and view when invoices are getting submitted, received, as well as approved. Also, it is easier for you to run reports and check if invoices are getting stuck by an employee. In addition, AP solutions can help different teams to work together, free employees of administrative tasks, help them increase their job satisfaction, and redirect them to do strategic work that will add value to your business.
Remain Compliant with Electronic Audit Trail
Accounts payable system offers a searchable audit trail of all your payments and invoices. It also minimizes the risk of lost paper documents and manual errors. It can help with quarterly filings and regulatory compliance. In addition, for several legal entities, the solution can also deliver a centralized system for storing invoices, even if you are using various ERP systems across legal entities.
Prevent Supplier Fraud
Today, more than 75% of companies get impacted by payments fraud and chief financial officers should take measures to safeguard payment processes. AP software can help by controlling which staff can approve invoices and release payments. Approval workflows which include several people increase the chances of detecting fraudulent invoices before it is paid out.
Granular Insight into Data to Make Proper Decisions
One of the top accounts payable challenges is the need for real-time visibility of data according to the Aberdeen report. AP automation system allows you to gain real-time insight into AP workflow and payables like where invoices presently sit within the approval cycle. Cloud-based accounts payable solutions offer mobile apps, enabling users to access information from anywhere at anytime.
Speed Up the Process and Pay Suppliers Quickly
The solution cuts down the time it takes to process invoices from 20 days to 4 days, which implies that you can pay your suppliers quickly, capture vendor discounts, and avoid any late payment penalties. Automating check payments can help save time that would otherwise be spent on signing, printing, and mailing checks out. Also, you can replace checks altogether with integrated ACH payments. Virtual credits cards have gained popularity which enables you to earn cash.
By automating AP and leveraging a transparent digital process for crucial business functions, you are making a digital trail that anybody can follow. Maintaining heaps of paper documents in file cabinets or folders leads to misplacement. Moving accounts payable to an automated platform provides you the ability to monitor each step of your business operations and then hold the records in keeping with a systemized retention schedule. When you need to present those records to someone, imagine how easy it will be for all to share digital versions complete with the transaction histories formed into a single document.
Eliminates Redundancy and Creates Efficiency
If your team processes 1000 invoices every month, it takes five minutes for an AP employee to input each invoice manually. Then, all these invoices are sent to managers through emails for approval before they are submitted back to you for payment. The approval email process might also take five minutes to get processed. But there are problems too. AP employees may have a 4% error rate on entering invoices. At times, invoices get paid twice and sometimes they do not get paid at all if a department head fails to respond.
Instead of entering invoices manually, each invoice can get captured into ERP systems automatically. Automated processes can validate invoice information and payment amounts to reduce payment errors and eliminate duplicate payments.
The Bottom Line
Accounts payable automation system is the next must-have solution for all savvy finance leaders and CFOs. It improves insight, prevents losses, saves time, and enables your accounting processes to scale easily as your business grows.Author Bio : Marissa Levin is a marketing consultant, freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP, and Cloud/SaaS trends.