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Cloud-Based Accounts Payable

By Annapoorna

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Updated on: Jul 7th, 2023

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5 min read

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Today, every fast-growing business requires a cloud-based accounts payable solution for operating optimally and at scale, to ensure best practices, and be sustainable within their existing AP processes. From natural disasters to lockdowns, cloud-based accounts payable automation improves collaboration and productivity regardless of the organisation’s workforce location.

 

Meaning of cloud-based accounts payable automation

A cloud-based AP automation system is a software solution that could automate an organisation’s purchase invoice processing and vendor bill payment. The cloud-based AP system also includes the additional benefit of accessing the system remotely.

With the help of cloud-based accounts payable automation, organisations can access invoice data and manage their accounts payable activities from anywhere, and all they need is a device connected to an internet network. This makes it easier for the AP teams to work closely and stay organised.

 

Benefits of cloud-based accounts payable automation

Having a well-defined business process hosted in the cloud allows the organisations to not worry about that particular business process which could also be affected by external factors. Cloud-based AP automation is scalable and agile enough to merge with new or multiple ERPs compared to the conventional on-premise AP solution. Know the differences between on-premise and cloud-based AP solution

Cloud-based accounts payable automation reduces the risk of fraud. It enhances the visibility in the organisation’s AP department, including the reporting capabilities to capture the flow of transactions. It could significantly reduce processing costs and provides additional benefits such as:

  • Eliminating duplicate invoices
  • Streamlining the overall approval process
  • Enabling early payment discounts
  • Tracking payments and dues

 

Types of cloud-based accounts payable automation

There are several types of cloud-based accounts payable automation software available, but generally, these can be divided into three types, which are:

  • A public cloud is where the infrastructure and services are provided offsite over the Internet. It is also known as the ‘true cloud’ as it offers all the advantages of a cloud community as well as shared resources. 
  • A private or hosted cloud is where the service is maintained on a private network. In this, the organisation would need to buy and maintain the infrastructure and software without the benefits of shared resources available on a public cloud.
  • A hybrid cloud involves multiple private and public options with various providers. A hybrid approach enables organisations to decide and operate their AP processes remotely from anywhere.

A hybrid cloud approach is best suited for organisations looking to benefit from the scale and security of a public cloud while keeping their data on a private cloud. This can help improve privacy and ensure compliance for your regulated applications. One drawback of this variation is that the users would be required to track multiple platforms and ensure that their different business solutions could communicate with each other. 

For even further gains, organisations should look for a holistic, end-to-end AP automation solution covering steps starting from invoices capturing to supplier payments. One intuitive system for controlling and overseeing all the AP processes will translate into fully automated processing, better levels of compliance, and opportunities for further savings which would impact the business’ bottom line.

The cost-effectiveness of cloud-based AP automated solutions is the key motivating factor. An organisation should know what is their current cost for invoice processing and how implementing an AP automation solution would help them. Usually, the benefits of cost savings come after deployment in the form of streamlined IT processes and a reduction in costs related to upgrades and customer service solutions. 

 

How to choose an ideal/best cloud-based accounts payable solution?

Choosing a cloud to accommodate the AP process is a big decision. It’s crucial to be fully aware of what the potential solution offers. Below are some of the key areas an organisation should explore when choosing cloud-based accounts payable automation solution:

  • Can the solution offer end-to-end invoice processing without human intervention (from scanning to coding, approval and syncing with the ERP)? 
  • Does the vendor have any case studies or testimonials of the deployment of their solution with another client?
  • Service history of the vendor providing the cloud-based AP automation solutions.
  • Vendor’s global footprint. Will such a vendor be able to provide support in new geographic areas?
  • Whether the vendor outsources any part of its development or customer service? 
  • What level of support could you expect before, during, and after the deployment of the solution?
  • Does the solution allow the organisation to track and measure process performance KPIs?

Harnessing the capabilities of the cloud recaptures the ability of an organisation’s accounts payable team to increase efficiency, and enhance cash flow management with increased visibility and improved reporting to different relevant stakeholders. It helps the AP department to become the most agile, scalable component of the organisation’s finance department.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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