In most companies, the accounts payable department tends to be a paper-intensive, manually-based process. By using AP automation software, companies can save hours of staff time, money and give executives greater insight into the cash-flow process. So how does AP automation work? Let’s take a look behind the curtain and follow an invoice through the AP automation process.
Whether an invoice or a purchase order is received through the mail or email, it’s converted to an electronic format. The AP automation software then analyzes the data to determine what it can automatically import – details like company name, PO and invoice numbers, dates and amounts. Once the data has been identified or recognized, the software will try to automatically match information against related transaction data or purchase orders. When there is a complete match, it can be routed automatically for final approval or directly for posting and payment, depending upon your process and the integration capabilities of the solution. Any exceptions or anomalies found are automatically routed to verification/correction and alternate processing.
AP automation depends on efficient workflow, so approval routing should be configured to your specific business rules. You’ll create rules in the software such as which employees have access to various types of documents, what invoice levels they can approve at and what happens when exceptions occur or a document is taking too long to process.
The final step in the AP automation process is paying your vendors. According to a 2015 AFP survey, issuing checks is ten times more costly to businesses than making electronic payments, and the high cost is the primary reason nearly 80% of businesses are moving away from paper checks. Once the transition has been made to ePayments, your staff can focus on more high-value work including customer service, answering vendor inquiries and working on special projects.
Effective automation for payables should provide a seamless way to handle most of steps in your disbursement cycles. An integrated and well-implemented AP automation solution should drive immediate benefits to your AP department, providing up to 80% faster processing, better and cleaner data, excellent reporting capabilities and an optimum use of time and resources.
If you’re ready to learn more about how AP Automation and ePayments can benefit your company, contact ACOM Solutions today!