How AP Automation Can Help Your Business Thrive
No matter the size of your accounts payable (AP) department, your AP team is vital to the operation of your organization. This department looks after business purchases and expenses from a supplier or creditor and makes sure these balances are paid off in a timely manner. Late fees and contract penalties can occur if there is not an adequate amount of time for processing invoices. These deadlines and responsibilities can pose a significant challenge and many companies are exploring options for automating AP procedures.
Technological Accounting Software And AP Automation
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What exactly is AP automation? Accounts payable automation are software application solutions that focus on streamlining time consuming, and traditionally hands-on tasks and processes associated with AP.
Advances in technology and procedural task automation have given rise to AP automation tech, allowing for hands-free, paper-free, processing of invoices, aggregated digital record keeping, and streamlined organization and management. No more lost invoices, and all AP procedures can be efficiently stored and categorized for increased financial visibility and fraud protection.
Commonly Automated AP Responsibilities
There are many potential responsibilities that could be automated in the AP process It is important to consider which tasks can benefit the most from this automation and how. Some financial duties may take more attention than others and some may be more error prone than others. Deciding which tasks could be streamlined the most may be very valuable to prioritize while making the transition to digital and automated financial management and bookkeeping.
AP automation providers allow for seeing a continuously updated status report on the stages of invoice processing. This can instantly show outstanding invoices, pending transactions, and can sort invoices by days unpaid, amounts due, and by customer.
Categorization And Organization
Not all suppliers use the same forms or standardized communication and fonts when invoicing. All of these various formats can slow down the intake process when done manually. Automated AP systems however, use optical recognition software to instantly cut through the different fonts and formats to find the valuable information you need for the most efficient sorting and categorization. AP systems also allow for data organizing and aggregating to the cloud for efficiency and speed.
Invoice And Payment Approval And Processing
Approval processes can be time consuming. Automation can use many different set parameters in order to streamline what can be approved and why. Orders can be sent when certain parameters are met, or can be denied when they are not. If there is a hands-on position in your AP department responsible for direct approval, these systems can still be utilized to determine which orders should be sent for final approval and can funnel them from all departments to the person in charge of approval.
Once the order has been approved, payment authorization can undergo a similar process and can also be automated to eliminate human error and late or inaccurate payments.
Automated AP systems are also great for catching discrepancies and problems. Setting detailed parameters to check against customer and invoice information can quickly and efficiently offer an alert to potential issues or mistakes and can show the source and who should be contacted.
Saving Time And Money
These applications are pretty clear, but some of the benefits and how they translate into better and more efficient business can be complex as well. One key cost-cutting benefit is that it can drastically decrease the number of paper invoices that need handling. In a company that may have previously handed out tens of thousands of invoices per month, cutting this down by up to 90% can be a real game changer for both expenses and overall efficiency.
The great thing about saving money by saving time, is that time is being used somewhere else. AP automation can free up employees on other more rewarding tasks. Every hour you save on one task can be used against another. Time is money and saving either should always be a priority.
Bulk tasks can benefit greatly from AP automation systems. Companies with large numbers of monthly invoices can instantly see the benefit of streamlining this process, as the reduction in processing costs and processing times is exponential with the increase of intake load.
One key benefit of AP automation is that you can drastically limit who has access to invoices and can control who can request and make payments. When each invoice and payment request is routed through established approval channels, this gives an instant increase in oversight. Administrators can customize exactly who has access and why based on job roles and other security factors. With manual AP systems there are many holes left open for anyone to authorize interactions fraudulently. Automating these systems gives a direct system of clearance and allows for internal checks and balances to be easily seen and laid out.
These systems also drastically reduce the time it takes for fraudulent activity to be recognized and discovered. Clear digital data storage and record keeping allows for far greater accountability. This efficiency, organization, and access control is the key to the evolution of accounts payable fraud prevention.
Accounts payable departments typically have to handle a lot of manual processes. This can lead to human error, fraudulent activity, and bottleneck of overwhelming intake. All of these issues can lead to lower profits, disgruntled suppliers, and damaged company trust. Automating your AP systems is one accessible solution to so many business headaches. Look into automating your AP finance management to save your company money and to free your time to improve your business growth.