In today’s fast-paced business world, manual processes are becoming increasingly outdated and inefficient. One area where this is particularly apparent is in the management of accounts payable (AP). With an estimated 81% of businesses falling victim to payment fraud in 2019, and over 55% still manually handling their financial data, it’s clear that there is a pressing need for a more streamlined, automated approach. In this article, we’ll explore the benefits of AP workflow automation, how it can save your business time and money, and how to choose the right solution for your needs.
Understanding AP Workflow Automation
What is AP workflow automation?
AP workflow automation refers to the use of technology to streamline and automate accounts payable processes. By eliminating manual tasks, businesses can process supplier invoices without any human intervention, resulting in better visibility and control over financial data. Automated systems can also help businesses save money by optimizing vendor portfolios, avoiding duplicate and erroneous payments, and taking advantage of early payment discounts.
AP workflow automation vs. manual systems
In a traditional, manual AP workflow, individuals are involved in every step of the process, from receiving invoices to making payments. This can be a laborious and error-prone process, as employees must manually input invoice data into the accounting system. In contrast, AP automation solutions integrate accounting with your company’s enterprise resource planning (ERP) system, databases, and other financial systems, ensuring the accuracy and security of your data. This means that all your financial data is organized and searchable in one secure location, saving time and reducing the risk of errors.
Top 10 Benefits of Automating Your AP Workflow
- Cost savings:
- Processing an invoice manually can cost around $15 per invoice, while an automated system can reduce this cost to $5 or less. In addition, automation can decrease labor costs by reducing data entry by 83% and speeding up processes such as payments and invoice matching.
- Time savings:
- Automation can reduce the time required to process an invoice by over half, as well as automating the routing of payables based on your business processes. Your employees will no longer have to search for invoices or determine their status in the approval process, as this information will be readily available in the system.
- Seamless collaboration:
- With an automated system, multiple stakeholders can collaborate in real-time on any payable, allowing for quick resolution of issues and the ability to easily access and review invoices.
- Decreased accounting risk:
- AP automation improves transparency and visibility into the approvals and payments workflow, helping to mitigate AP risks and fraud. The software will flag duplicate invoices, extraneous charges, or suspicious activity, giving you greater control over your finances and peace of mind.
- Fraud detection:
- Electronic invoicing systems provide an electronic “paper” trail from invoice receipt to payment, making it easier to detect and prevent fraudulent activity.
- Improved vendor management:
- Automated systems can help you build stronger relationships with your vendors by ensuring timely and accurate payments, which can lead to better terms and potential discounts.
- Enhanced audit process:
- With all your financial data organized and stored in one place, audits become simpler and more efficient, saving time and resources.
- Timely payments:
- By automating the approval and payment process, you can ensure that invoices are paid on time, avoiding late fees and penalties and maintaining good vendor relationships.
- Increased profitability:
- Timely payments, reduced errors, and improved vendor relationships can all contribute to increased profitability for your business.
- Centralized AP process:
- A centralized, automated system makes it easy for anyone within the company to check the status of an invoice or payment, streamlining communication and reducing the risk of lost or misplaced paperwork.
Choosing the Right AP Automation Solution for Your Business
To choose the best AP automation solution for your business, consider the following steps:
Evaluate your current AP process:
- Identify the problem areas in your current manual system and determine the most pressing needs for automation.
- Talk to employees:
- Discuss the transition with the employees who will be using the new system, and gather their input on the most critical areas for improvement.
- Define your expectations:
- Determine the primary objectives of your new AP automation system, such as cost savings, time savings, error reduction, or fraud detection.
- Choose the right software:
- Select a software solution that best addresses your business’s needs and integrates seamlessly with your existing systems
- Implement the new system:
- Train your employees on the new system, and gradually transition from manual processes to the automated system.
Automating your AP workflow can save your business both time and money, while also reducing the risk of errors and fraud. By choosing the right solution and implementing it effectively, you can streamline your financial processes, improve vendor relationships, and ultimately increase your profitability. So why wait? Embrace AP automation today and watch your business thrive.