Accounts Payable departments are involved in every aspect of a payment’s life-cycle, which starts with receiving an invoice. No matter the size of your company, processing invoices can be tedious and frustrating as a delay during any step can cause significant problems down the road. In an effort to maintain positive vendor relationships and improve the productivity of your staff, your business could benefit from adopting an automated solution for processing invoices. Since your AP process begins with invoices, your automation solution should start there too. In this article, you will learn more about accounts payable automation and how it can save your business time and money.
What is Accounts Payable Automation ?
In order to understand accounts payable automation, it may help to start with what is involved in processing an invoice. An invoice is a bill that includes the goods or services purchased from one business that is sent to the purchasing company to pay. Each invoice contains the invoice creation date, the payment date, the supplier contact information, detailed descriptions of the services or goods purchased, and the terms of payment. Each piece of information needs to be verified, tracked, and recorded to maintain accurate records.
The invoice process itself involves many steps that include verifying account information, routing the invoice to different staff members for approval, and maintaining detailed records of money paid and payment deadlines. AP automation, therefore, is a way to streamline this process to make it easier for everyone involved. AP automation allows staff to digitally route invoices for approval, automatically verify and collect data from electronic invoices, and create detailed reports from the data for a company’s financial records.
Solving AP Problems with AP Automation
Accounts Paable automation can solve many problems that your AP department faces.
If your company maintains paper records, invoices can be misplaced in any number of places: buried on person’s desk, misfiled in a filing cabinet, or even accidentally recycled. With automation you no longer need to worry about lost invoices. Digital systems can store invoices indefinitely, and staff can find them quickly by searching through digital archives.
Another problem is related to maintaining financial records. Having a firm grasp on your company’s financial position is necessary in creating strategic goals, but manual processing can get in the way of this. If invoices are left untouched for days, it can delay your entire payment process. Delayed or even late payments can negatively affect the relationship with your vendor and can prevent you from having an accurate picture of your expenses and available funds. When invoice processing is automated, everything moves much faster; your software digitally verifies information, automatically updates financial records, and you can even automate payments for regular vendor invoices.
How Does Automation Affect Invoice Processing Costs?
Reducing costs by eliminating paper is one of many ways your business can save money by adopting an automation solution for invoices. When businesses use automation tools, it can significantly reduce labor costs as less time is spent manually performing all invoicing tasks. This also means that your staff will have more time to focus on other aspects of their job while their automation software verifies, routes, and stores invoice information. Automation also leads to fewer processing errors and therefore less time wasted rectifying incorrect payment information, missed payments, and other issues.
Accounts Payable Automation at a Glance
No business wants to spend more time or money than is absolutely necessary for processing invoices and payments. With accounts payable automation, your AP staff can focus on other tasks while their automation software handles the tedious tasks of verifying, recording, routing, and storing invoice information. Stop putting your company’s financials at risk by adding extra steps to your invoice processes. Factoring in the cost savings realized by reducing paper use, improving staff productivity, and reducing manual entry errors, your company can benefit a great deal by adopting an accounts payable automation solution.