Accounts payable is a crucial element in the financial stability of a business. If you pay your owed money in a timely manner and keep proper track of your transactions then managing these transactions will be easy. However, if you have a larger firm then manually handling your payables will not be easy.
A manual accounts payable operation most often leads to mistakes or inefficient use of resources. No matter if you have skilled professionals for handling your accounts payable, there is always a chance of errors while matching numbers or filing the paper documents.
Therefore, accounts payable automation solution is the only way out. It is a simple yet most efficient process which provides error-free handling of your debts and payables. You have a clear insight into your finances and handle them wisely.
Moreover, if you are sure about your goals and know exactly what your business requires, then automation of your accounts can do wonders to your business. You should also know how to handle the software so you can guide your team and they can work in a streamlined manner.
That’s why we have brought you a complete guide on accounts payable automation.
What is Accounts Payable Automation?
As the name suggests, accounts payable is software that handles your manual tasks of accounts payable. With this software, you don’t need to manually cover your invoice processing, approval routing, managing documents, and other tasks. This digital work process streamlines your accounts payable and makes it virtually error-free.
What Is The Function Of AP Automation?
AP automation will assist you in creating an invoice for each creditor based on the quotations you gave. These invoices employ the creditor’s information to list each item that is due for payment, the cost of those products, and the total amount owed.
The application can account for sales tax, and it may also reduce sales tax when you are not required to pay tax on particular things.
Moreover, the system saves a copy of the invoice, which you may inspect at any time.
What to Consider Before the AP Automation Process?
Before processing your accounts payable to automation, you need to do the following things.
- Try to digitize all of your invoice receipt methods. These organized receipts make the automation process smooth and easy.
- Make sure you have a solid purchasing process in place to get the most out of invoice automation. Precise invoices can be instantly matched against effective purchase order practices, with no approval process required. The same procedure can be used for both routine and contract-based purchase orders.
- For your small, rapid, and irregular tasks such as invoice entry or posting, Robotic Process Automation will be best suited.
What Does AP Automation Do To Your Business?
AP automation provides the following benefits to your business.
- Enhanced Efficiency
Your accounts payable process will have fewer errors due to automation. So, you don’t waste your time catching up on any mistakes and utilize it efficiently on other core activities.
Moreover, your invoices are also accepted in no time with this AP automation. So, your overall work gets efficient.
- Save Money
AP automation requires less labor, as most of the work is getting done automatically. So, you don’t need to hire extra labor for manual processing of accounts payable. Moreover, when you have more accurate invoices then your business will also cut down the money which gets wasted due to wrong, missed, or duplicate invoices.
Furthermore, if you are able to generate invoices on time, then you can also enjoy early payment discounts. If you have a large firm then these discounts can really make a big difference to your business.
- Increased Accessibility
AP automation is cloud-based which saves all of your data in its storage. So, you can access any file instantly and locate it anywhere i.e. in your home or office. Moreover, you don’t need to handle large piles of paper files with AP automation.
- Increased Security
All of your invoice data is stored digitally, so not everyone can access it easily. You can give access to your invoice data to only a few members in your office by adding login details for AP automation. In addition, you don’t have to fear any missing or lost file paper file.
- Faster Processing Speed
When there is no manual processing and OCR is handling your invoice processing through scanning, then the invoices are generated speedily. Moreover, less human error also accelerates the process. You can utilize the extra time to focus more on the core aspects of your business.
How does AP Automation work?
AP automation works in the following way
- Firstly, the AP software processes digital invoices by converting any upcoming invoice into digital form.
- Secondly, the OCR extracts the information from these digitally converted invoices. This process can also be optimized which results in no verification for a smoother workflow.
- Thirdly, these invoices reach your ERP system, where they will coexist with and be connected to other essential accounts payable documents such as purchased materials and purchase orders.
- Fourthly, the invoices are routed for approval to managers.
- Lastly, the manager and authorized end-users can validate the invoices and grants approval.
What to Look for In AP Software?
AP automation can only be done through proper software. So while selecting one, you can consider the following tips to get the most appropriate AP software for your office.
- It should be able to integrate with your office ERP.
- Look for self-server portals in AP software. These servers attract vendors to develop healthy relationships with your business.
- Software should have easy to handle interface so that your staff can handle it easily
- It should be able to optimize according to your office culture.
- It should be able to generate automated and instant reports so you can check invoice status and history, and look for ways which can enhance your business workflow.