Top Benefits of AP Automation

Manual Accounts Payable (AP) processes brought about various challenges long before working from home was the norm and continues to cause issues even after staff returned to office. Getting back to “normal” would require making tasks simpler with added controls. An organisation can achieve this by automating its accounts payable for adding flexibility to remote work and save costs.

Meaning of Accounts Payable (AP) Automation

AP Automation is a technology that employs digital systems for reducing manual and repetitive tasks, identifying duplicate invoices, approving invoices at multiple stages, etc in accounts payable management. With the help of AP automation, businesses can digitise and validate vendor invoices, manage approvals and process vendor payments through a single platform. A single platform enables swift approvals, better visibility and control over financial data and processes.

Benefits of AP Automation

Saves Time

In a traditional setup, invoices would be stacked on the desk or wait in the mailbox for approval. AP automation streamlines the invoice approval process, reducing delays. Specific rules could be applied to the workflow so that an invoice is sent to the right personnel automatically at the right time with reminders. The automation also provides dashboards enabling the users a real-time view of the invoice processing, reducing the time spent hunting down their status.

Cost-effective Invoicing

Manual AP tasks such as data entry and approval follow-ups could lead to high hidden costs. AP automation helps save labour costs by reducing time spent on data entry. The automation also reduces hard costs for storing documents, postage, and more. It also reduces the risk of duplicate and late payments.

Enhanced Accuracy

Choosing to automate AP translates to reduced errors. Manual entry of a single invoice needs an average of 120 keystrokes. This takes at least 12 minutes resulting in a 3-4% error rate (standard industry norms). AP automation is designed to protect businesses from common process errors. With the help of invoice digitisation, there is no need to feed line-item data or invoice headers manually. Moreover, invoice data is validated against an organisation’s ERP (enterprise resource planning) information like PO (Purchase Order) & GRN (Goods receipt note), making it easier for catching duplicate payments.

Better Insights

With comprehensive dashboards, accounts payable automation offers a clear window to the payment cycle. Using smart analytics providing information on vendors’ business trends, enterprises get in a position to negotiate credit terms with their suppliers. It is easy for the AP team to check the status of an invoice and whom to reach out to in case of a delay. Moreover, data could be imported and exported with real-time access for reporting and analysis, particularly at the end of business cycles.

Safeguard against Frauds

AP automation software safeguards an organisation against fraud by assigning access to the invoices to specific employees for their approval and the release of payments. This process ensures no single employee has the authority to approve and release the payment for an invoice. This reduces the risk of fraud while allowing the AP team to double-check data. 

Increased Data Transparency

An automated AP process offers a sense of control that could never be achieved with a traditional setup. Instantly, the AP system lets the organisation know where every invoice is, how productive people are managing them, and virtually everything an organisation wishes to know about its payables. AP automation offers an organisation a system with complete visibility and transparency of its AP process.

Assists Auditing

AP automation helps in document management, boosting the auditing processes. The automation links all documents and messages involved with every transaction while matching the vendor invoices with purchase orders and receipts. This builds a trackable audit trail that reduces the chances of missing paperwork and ensures compliance for quarterly or annual filings.  

Easier Integration

Another key benefit of AP automation is integrating with organization's ERP and other financial systems. An all-inclusive AP suite removes the requirement to log in to different applications or feed data into several systems, both prone to errors.

Easier to comply and monitor

It is critical and complicated for making sure that your team follows the right approval process and processes payment for only legitimate invoices. Automated Accounts Payable systems generate pre-defined records of every action taken on an invoice by the personnel, in real time. Easy data access and retrieval makes compliance and monitoring seamless. 

Promotes vendor satisfaction

The advantages of automating accounts payable is not only internal. It is important to understand the impact this has on the vendors or suppliers as well. Less time spent on manually entering the data and matching purchase invoices allows one to capture vendor-based early payment discounts.

Vendor payments processed within the due dates more consistently portrays your business as the preferred partner for vendors. The good reputation with the vendors comes to your rescue in times of need.

Conclusion

Hence, the automation of accounts payable process in your organisation has upmteen benefits that is seen to transform into better ROI for your organisation.