Accounts Payable

Let It Flow: How AP Automation Helps Liquidity

March 15, 2022


Estimated Reading Time: 3 minutes

When it comes to your company’s finances, cash flow is king. Optimizing the amount of money coming in and going out is the goal, but that’s easier said than done.

Automating your accounts payable process can be your secret weapon, giving you the means to achieve the ideal balance when it comes to your business’ money.

businessmen hand shaking

Strengthening Bargaining Power

Not only does AP automation significantly reduce invoice processing time, but it also provides end-to-end visibility. With customizable approval matrices, the software delivers invoices to the right person in the workflow, sending regular reminders until the document is approved and paid. Any bottlenecks can be quickly flagged so they can be resolved before causing any delays.

And the faster you develop a reputation for settling invoices promptly, the quicker your company will be able to enhance your relationships with vendors — a quality that will come in handy when negotiating more favorable rates and terms.

In addition, the ability to remit payments swiftly gives you the opportunity to take advantage of early payment discounts, which would have a positive impact on your cash flow.

Keeping an Even Keel

When accounts payable is handled manually, delays in the process can lead to a buildup of pending invoices. This can result in an erratic outflow of money, with multiple disbursements happening at the same time.

An AP automation software like Beanworks allows you to process invoices 9x faster than when the same work is done manually.

What’s more, resolving invoices in a timely manner leads to a regular, balanced release of funds and avoids any sudden cashflow spikes.

Full visibility also ensures money isn’t going out too quickly — as a general rule, it’s best practice to establish a happy medium. Don’t send your money too late, but hang on to it as long as you can.

reduce the cost

Cutting Out Extra Cost

Efficiently managing your AP process with automation eliminates the threat of fees and interest for late-paid invoices — expenses that can add up like death by a thousand papercuts.

Software like Beanworks allows you to reduce the cost associated with processing invoices. Attempting to manually process your invoices is a time-intensive process, and greatly increases the price tag associated with accounts payable.

The cost of manually processing an invoice runs as high as £15, compared to a rate of less than £5 when adopting automation.

Ensuring they walk the line

Greater transparency in the AP process helps ensure that vendors are adhering to the terms agreed to in your service level agreements (SLA) and makes it easier to review your business relationships and helps avoid any negative impacts to your cash flow.

Automation lets you quickly match purchase orders to invoices, eliminating any discrepancies. When errors are identified, the invoice can be promptly sent back to the company for correction. Not only does this prevent you from paying any more than you are supposed to, but it resets the clock on the invoice due date, keeping funds in your pocket for as long as possible.

To learn more about how automation can help you, check out Beanworks’ library of free, on-demand webinars

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