Change is difficult for everyone, and accountants are especially known for sticking to time-honored methods. The nearly overnight transition to remote working because of Covid-19 was not easy, but finance teams were forced to adapt.
Many organizations welcomed the advantages of AP automation solutions after the switch to remote working. In a State of Accounts Payable report, 32% of companies surveyed began to automate their AP departments in 2021. Of these companies the greatest adoption rate has been among companies earning between $250 million – $1 billion, with over half choosing automation. While working remotely, embracing AP automation becomes even more critical.
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.
The biggest challenges in AP include manual data entry and inefficient processes, invoice to payment matching, and lost or missing invoices.
If you have not done so already, take the opportunity now to transform your accounts payable process for the long term. We have come up with 9 benefits of automated invoice processing that makes the switch worth investing in.
Benefits of Accounts Payable Automation Software
1. Time Savings
Accounts payable automation makes invoice processing and approval exponentially faster by removing time-consuming and error prone manual tasks:
- Invoice headers and line-item data are scanned with character recognition software.
- Two, three-way and advanced 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.
- almost completely eliminates human error.
- removing the need for the same level of oversight.
- virtually eliminating overpayment and duplicate payments.
- automatically flagging exceptions to be reviewed by your approvers.
- 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 are also keen to avoid paying late fees and damaging reputations with suppliers.
Unfortunately, paper gets lost. Employees lose track of where invoices stand in the payment process. Accounts payable automation platforms will help you save time and effort that could be channeled 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, which is rare in manual invoice processing.
Invoices that are not automatically approved for payment are flagged and promptly rerouted to the relevant individuals. Top AP automation benefits include 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 offer 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, suppliers, 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.
AP automation benefits include faster implementation time and lower costs since technologies like robotic process automation and other purpose-built systems complement existing systems. According to Deloitte, 73% of companies choose robotics and cognitive automation technologies like OCR for transformation efforts.
Combined with cognitive automation like OCR, RPA allows employees to successfully collect data from invoices of any format using a desktop computer, laptop, or mobile device. When enabled, full mobile access makes it possible to work from anywhere at any time.
By maximizing accounts payable benefits brought about by smarter technologies, companies improve efficiency without needing to swap out existing systems.
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 including directly through the Supplier Portal.
- 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 invoices early. Due to a lack of visibility into invoice lifecycles, these discounts are often missed.
In fact, according to Levvel Research, only 45% of AP teams are responsible for early payment discounts but the inability to complete invoice approval on time is a major challenge.
Organizations who use 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’.
We are headed toward a tech-powered future with the accelerated transformation of finance functions. Digitally savvy finance teams working seamlessly with smart technologies satisfy stakeholder demands for forward-looking financial insights.
Accounts Payable departments have had to deal with waves of operational changes recently. However, through the adoption of digital technologies such as accounts payable automation software, AP departments are quickly adapting, improving operations, and making a major impact within organizations.