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Is your accounting up to speed with current processes? The first step towards getting back to “normal” will be making tasks simpler and adding more control. How can accountants achieve that? We recommend organizations automate their accounts payable to save costs and add remote-work flexibility. We’re seeing the trends already – 62% of 1,100 accounting professionals from 18 countries that were responding successfully to the crisis were more likely using cloud-based technology.
What is accounts payable (AP) automation?
AP Automation or accounts payable automation is the technology that uses a digital system to reduce manual and repetitive tasks such as data-entry and writing checks. With automation companies can submit invoices, manage approvals, and process payments – electronically through a single platform. Organizations use automation to minimize or eliminate manual intervention and speed up operations such as approvals, which tend to take longer without proper controls. AP automation is most commonly used to accomplish the following goals:
- Eliminate data-entry
- Enable online approvals
- Generate digital audit trails
- Match invoices to POs and payments
- Enable secure, end-to-end payments
- Reduce errors such as duplicate payments
Unlike the presumption that automation replaces humans, within accounting, automation tools are used to add more value by freeing teams from tedious inefficient tasks. Organizations have realized significant cost-savings by replacing paper with electronic invoices and payment methods.
How is AP Automation beneficial?
1. Time Savings
Using business process automation to manage accounts payable reduces the time needed to process an invoice. Payables are routed according to prescribed business processes you determine, automatically and instantaneously. Implementing an AP automation system means no one in your organization will ever have to spend another second searching for an invoice or hunting down where it is in the approvals process. There will never again be another “misplaced” invoice once you implement AP automation software.
2. Cost Savings
Manual tasks in AP such as data entry and approval follow-up lead to high hidden costs. Processing an invoice manually can cost up to $15, compared to $5 or less with an automated system. Automation helps save labor costs by reducing 83% of data entry and speeding up other processes such as payments and invoice matching, as well as hard costs for document storage, postage, and more. It also helps reduce the risk of making duplicate or late payments or inadvertently overpaying invoices. An AP automation system will alert you to duplicates, overpayments, and remind you all of pending due dates.
3. Better Collaboration
Invoice systems allow as many people as necessary to collaborate on any particular payable in real-time. No matter where they are, everyone with an interest or stake in an invoice can simultaneously access it to confirm or dispute charges, seek clarification, or explain discrepancies—all with just the click of a button.
4. Reduced Accounting Risk
Automation gives visibility into the approvals and payments workflow. This means that common AP risks and fraud such as false billing, duplicate payments, and fraudulent transactions can easily be tracked within the system. The software flags duplicate invoices, extra charges, or any suspicious activity, giving you the audit controls you need. You are guarded against common AP risks and fraud such as phishing scams, duplicate payments, and unapproved vendors which can be heightened during a crisis.
5. Electronic Audit Trails
Electronic invoicing systems really shine when it’s time for an audit. The electronic audit trails available through invoice software make tracking an invoice from receipt to payment a breeze. Accounts payable fraud detection is also easier with an automated system.
6. Personalized Process
Using an invoice system, you customize the accounts payable workflow to suit your company’s needs exactly. Route invoices above a prescribed amount to those with the proper authorization, create and maintain approval timers, balance AP staff workloads, and cross-check and validate payables against your own accounting system tables.
7. Cloud-Based Accounts Payable
Cloud gives users access to the AP system from anywhere. Information is centralized on a single platform for all legal entities. Moreover, enhanced visibility means finance leaders can get insight into how efficiently the process has been running. Remote tools give stakeholders access to manage reports from anywhere, increasing collaboration and productivity.
8. Full Visibility Into the AP Workflow
An automated accounts payable system provides a sense of control that can never be achieved with paper-based invoices. Instantly, the invoice system lets you know where every invoice is, how productive the people managing them are, and virtually everything you might want to know about your payables. From no visibility to complete control may be the one thing controllers can’t put a value on, but far be it for us to stop them from trying.
Beanworks is a cloud-based accounts payable automation solution. We help companies streamline invoice-to-payment processes by eliminating paperwork and reducing invoice processing costs. Schedule a demo with us today to find out more.
Photo source: Stocksnap.io / Carl Heyerdahl
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