Change is difficult for everyone, and accountants are especially known for their adherence to time-honored methods. Therefore, the almost overnight transition to remote working, that we have all had to make as a result of Covid-19, has not been easy.
However, as reported by PYMNTS.com, the benefits of accounts payable automation software are being experienced by many organizations since the switch to remote working. According to the report, “businesses appear to be taking the crisis as a sign to update processes, and 38 percent of companies said they were starting to automate their AP departments this year, up from 24 percent in 2019.” We also recently published a blog on the 9 reasons to embrace accounts payable automation while working remotely.
Manual accounts payables processes brought about many challenges long before remote working was the norm and they will continue to cause problems even after staff have returned to the office, be it partially or permanently.
As accounts payable research experts Major Bottoms Jr and Anna Barnett of Levvel report, the biggest manual AP pain points include manual data entry, invoice approval and lost or missing invoices.
If you have not done so already, you should take the opportunity now to transform your accounts payable process for the long term. We have come up with 9 reasons why it pays to make the switch:
Benefits of Accounts Payable Automation Software
1. Time Savings
Accounts payable automation makes invoice processing and approval exponentially faster:
- Invoice headers and line-item data are scanned with character recognition software.
- Two-and three-way matching is completed without any human interaction.
- Payables are routed to your predetermined business processes.
2. Streamlined, Accurate Processing
Automated matching processes, on-average, 80 percent of invoices straight-through from capture to payment.
- It almost completely eliminates human error.
- It doesn’t require the same level of oversight.
- It virtually eliminates overpayment and duplicate payments.
- It automatically flags exceptions to be reviewed by your approvers.
- It makes reporting, budgeting, and auditing far more efficient and accurate.
3. Easy Access, Real-Time Monitoring, and Greater Control
Accountants and CFOs want to know where every cent is at a given time. They want to keep track of every obligation owed. They want to avoid paying late fees and damaging their reputations with vendors.
Unfortunately, paper gets lost. People lose track of where invoices stand in the payment process. Accounts payable automation platforms will help you save time and effort that could be channelled into other vital aspects of your business.
Automated accounts payable allows full access to the payment cycle. Anyone who has permission can learn the status of an invoice at a glance. Since you can monitor progress in your workflow, it’s easy to pinpoint delays and get answers from your team members.
Sharing data throughout all levels of your organization is simple. You can automatically import or export pertinent information. Everyone involved can simultaneously access the system. This encourages real-time collaboration, a rare thing in manual invoice processing.
Invoices that are not automatically approved for payment are flagged and promptly rerouted to the relevant individuals. Automation enables real-time reporting and analysis. That results in faster month-end close.
In addition, an electronic trail is much easier to follow than a paper one. Exposing fraud isn’t such a challenge, and audits are simplified. You can’t put a price on that kind of control.
Documents are securely stored in compliant archives that meet business and regulatory requirements. Your files are always backed up and safe from fire, flooding, or theft.
4. Better Insight and Transparency
Greater visibility into the Accounts Payable process gives accountants and business leaders keen insight. Accounts payable automation solutions gives finance executives the ability to:
- See the big picture at a glance.
- Leverage exhaustive, real-time dashboard reporting of key performance indicators, to retrieve and present relevant data on short notice.
- Focus on specific problem areas and opportunities for improvement.
- Identify noncompliance with business rules and company spending policies.
Moreover, managers can use automation as a tool to monitor the performance and productivity of any AP individual or team. AP automation solutions can be used for employee reviews and as a tool to develop staff.
Transparency is highly admired by business leaders, employees, vendors, consumers, investors and government agencies. This is as transparent as it gets.
5. Customized Solutions
An intuitive, versatile accounts payable automation software has many benefits making it easy for users to design the AP workflows that best suit their needs. You determine the route that invoices follow to individuals with proper authorization.
You can create approval timers and set up alerts. No one knows your requirements better than you do, and a powerful platform allows you to keep it that way.
6. Integrations with existing finance systems
There’s no need to switch back and forth between applications or re-enter data into multiple systems. Accounts Payable solutions seamlessly integrate with all major financial systems, databases and enterprise resource planning systems.
In whatever format an invoice was received, data can capture it from a desktop computer, laptop or mobile device. Full mobile access makes it possible to work from anywhere at any time.
7. Improved Business Relationships
Accounts Payable Software makes it easy for you to serve your suppliers and maintain long-term, meaningful relationships:
- From initial on-boarding to regular invoice payment, supplier risk is reduced.
- Timely approval and payment will keep you in good standing with suppliers.
- Approved suppliers can submit documents and updates in a wide range of formats.
- The system will alert you to time-sensitive circumstances such as impending contract renewals.
8. Early Payment Discounts
Suppliers will offer a discount for buyers who pay their invoice early. Due to an organization’s lack of visibility into invoice lifecycles, these discounts are often missed. In fact, according to Levvel Research, one-half of organizations only capture discounts some of the time and 16% never do.
Organizations who are using accounts payable automation software to automate and speed up their invoice lifecycle are saving around 20%. Depending on an organization’s invoice volume and size, the financial savings could be millions of dollars.
9. Better Utilization of Talent
Just when everyone thought that automation spelled doom for workers across many industries, the exact opposite is occurring. According to PYMNTS.com, ‘automation can make firms flexible enough to restructure their staff allocations’ and ‘reassign workers to revenue-generating tasks’.
Ken Tysiac of the Journal of Accountancy predicts that jobs in accounting will evolve dramatically as more businesses automate their processes. Accountants’ interaction with leadership and clients will be much more dynamic.
Accounts Payable departments may have had to deal with a lot of operational changes recently. However, through the adoption of digital technologies such as accounts payable automation software, AP departments are quickly getting around these changes and are actually gaining the ability to improve the ways they operate and make a major impact within the organization.