Accounts Payable Automation for Property Managers
September 16, 2020
Estimated reading time: 3 minutes
When done manually, property management accounts payable (AP) can be grueling. From organizing invoices for payments, to the intricate data entry and signature follow ups – an endless stream of tasks adds up to make AP a time-consuming and labor-intensive process. A lengthy approval process is the biggest cause of late payments and missed discounts for accounting teams, followed by manual invoice routing and lost invoices.
With the projection of the global property management market expected to expand to $23.63 billion by 2026, property managers need to prepare to scale. Here are top reasons why eliminating paper, and automating AP can transform the workflow:
Cost savings by eliminating paper
Reducing processing costs is a top priority for 63% of AP leaders. The good news is that these leaders recognize paper as the culprit adding towards high costs. 52% of organizations admit that cost reduction was the principal advantage of paperless processing. Much of the high cost-per-invoice in paper-based departments is attributed to slow processing and high volume of paper. The longer it takes to process invoices and the more employees are involved in AP processing, the higher the cost gets.
Approval delays are a major challenge even when teams are in the same office. When working remotely, the struggle is employees are not in office to receive invoices or authorize payments swiftly. If you operate multiple locations or have approvers on different sites, following up on approvals can become time-consuming.
A major benefit of digital transformation is managers can conduct business remotely – from their home, a property or anywhere else in the world. They can route invoices automatically and simplify approvals with a mobile app. They can even follow a digital trail to audit the history of an invoice or payment.
Secure financial data
Data stored in the cloud is far more secure than on spreadsheets and paper. Think about it – your team is working remotely trying to close the month and in the pressure to do so in a time crunch, they transfer financial data through non-approved routes. This can easily go undetected too. 35% CFOs said they don’t regularly test or audit their controls. In uncertain times, financial risk is even more heightened.
With an automated system, information is stored on a central platform. Users can access, edit, review and exchange data easily without exiting the central system. You can even customize access based on location, role, invoice amount, unit lists etc.
Enhanced vendor relations
95% of businesses fail to make vendor payments on time. Late payments are the bane of the supply chain causing significant disruption to vendor relations. Companies accrue late penalties and lose on cost savings opportunities such as early payment discounts or virtual credit card rebates, without a proper payments workflow.
One of advantages of automation is property management teams become more strategic in vendor management. When you can see your spend in real time (or even before the money is spent) you are better equipped to forecast cash flow, schedule payments, and identify vendor discount opportunities.
Managing AP requires time, effort and resources. With AP automation, accounting teams can lower invoice processing costs, mitigate risks, and improve vendor relations.
Beyond Manual Data Entry – How AI is Giving Accountants More Time Back
The latest addition to this AI-backed feature-set is a tool called Line Item Capture, which further simplifies invoice data entry by extracting line item information, such as descriptions, unit costs, and quantities with 99%+ accuracy.
How To Perform a Health Check On Your Accounts Payable
Research has found that following up on invoices is a lengthy process, which can take up to 20% of a typical AP clerk’s time. Calculating exactly how much time your business spends on approvals can help you identify bottlenecks slowing you down.
When Crisis Strikes, Resilient AP Systems Are Crucial
While the pandemic has accelerated the need for businesses to prepare for uncertainty, arming your AP team with the right technology ensures your finances are a lot more secure.
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