What is Accounts Payable Automation?
Accounts Payable Automation (AP Automation) refers to the use of technology to automate the accounts payable process, which includes tasks such as invoice processing, approval routing, and payment. The primary goal of AP automation is to eliminate manual tasks, increase accuracy, and speed up the entire accounts payable workflow.
By leveraging AP technology, businesses can transition from traditional, paper-based processes to a more streamlined, digital approach. This not only saves time but also reduces the risk of human error and fraud.
Why Choose Accounts Payable Automation?
There are several compelling reasons to adopt Accounts Payable Automation for your business. Let’s explore some of the most significant benefits:
Time and Cost Savings
AP Automation greatly reduces the time spent on manual tasks like data entry, invoice matching, and approval routing. This results in lower processing costs and allows your finance team to focus on more strategic tasks.
By automating data capture and invoice matching, AP Software eliminates human error and ensures a higher level of accuracy throughout the accounts payable process.
Enhanced Visibility and Control
A centralized, digital accounts payable system provides greater visibility into your financial data. This makes it easier to track expenses, manage cash flow, and detect potential issues early on.
As your business grows, so does the volume of invoices and payments. AP Automation allows you to scale your accounts payable process without the need for additional staff or resources.
Fraud Prevention and Compliance
AP technology offers built-in security features and audit trails, helping to prevent fraudulent activities and ensuring compliance with financial regulations.
Accounts Payable Process Flow: From Manual to Automated
To better understand how AP Automation can transform your business, let’s first look at the traditional, manual accounts payable process:
- Receiving invoices from suppliers
- Data entry and coding of invoices
- Matching invoices to purchase orders and receiving documents
- Routing invoices for approval
- Processing payments
- Reconciliation and reporting
Now, let’s examine how Accounts Payable Automation streamlines each step of this process:
- Invoice Capture:
- AP Software uses Optical Character Recognition (OCR) to automatically extract data from digital invoices, eliminating the need for manual data entry.
- Invoice Matching:
- The software automatically matches invoices to corresponding purchase orders and receiving documents, ensuring accuracy and efficiency.
- Coding Invoices:
- With customized rules, the AP system automatically assigns the appropriate general ledger codes to invoices, reducing inconsistencies and errors.
- Approval Routing:
- Invoices are electronically routed to the necessary approvers, speeding up the process and providing better tracking throughout the workflow.
- Payment Processing:
- AP Automation facilitates faster and more efficient payment processing, allowing you to take advantage of supplier discounts and improve cash flow.
- Reconciliation and Reporting:
- With all accounts payable data stored digitally in a single system, reconciliation and reporting become easier and more accurate.
Choosing the Right Accounts Payable Software
There are numerous accounts payable software options available in the market, each offering unique features and capabilities. To select the best AP Software for your business, consider the following steps:
- Assemble a cross-functional team to define your company’s goals and requirements for AP Automation.
- Requirements Gathering:
- Document your current accounts payable process and create a list of desired features and functionalities for the new system.
- Vendor Evaluation:
- Review proposals from potential vendors, assessing their offerings in terms of features, costs, and implementation approach.
- Vendor Selection:
- Conduct in-depth evaluations of the most promising vendors, including demos and detailed discovery documents, to determine the best fit for your business.
Top Accounts Payable Software Solutions
To help you make an informed decision, let’s take a look at some popular accounts payable software solutions:
- A comprehensive spend management solution that automates expense reports, invoicing, and company credit cards. Spendesk includes OCR software for invoice scanning, customizable spending limits, and easy-to-use approval workflows.
- Designed for accountants, Beanworks automates invoicing and reporting, making it particularly useful for companies undergoing audits. Its user-friendly interface allows for easy invoice scanning, central document storage, and automated invoice matching.
- An AI-driven contract management platform, Gatekeeper is ideal for businesses dealing with numerous contracts and vendors. Its Vendor Portal allows suppliers to upload invoices directly, while the Kanban Workflow Engine provides clear visibility of responsibilities and progress.
- Focused on invoice processing automation, Stampli features a bot named Billy that scans invoices and extracts data. The platform offers centralized invoice management, seamless integration with accounting software, and intuitive approval workflows.
Embrace Accounts Payable Automation for a More Efficient Business
Accounts Payable Automation is a powerful tool that can revolutionize your financial operations, leading to increased efficiency, improved accuracy, and significant cost savings. By adopting the right AP Software and transforming your accounts payable process, your business will be well-equipped to navigate the challenges of today’s dynamic business environment.
Don’t let outdated, manual processes hold you back. Embrace Accounts Payable Automation and unlock the full potential of your business. With the right systems in place, you can focus on the strategic aspects of your financial operations and drive your company forward.