While it’s often said that only death and taxes are certain in life, any reputable company knows there’s a third inevitability: vendor bills. Failing to pay these bills promptly and securely can lead to financial losses and reputational harm. However, many businesses still rely on manual accounts payable (AP) processes which are time-consuming, resource-intensive, and prone to errors.
The first issue is the sheer volume of paper records that need to be managed, including invoices, purchase orders, shipping receipts, and more. All of these things can be easily digitised, which opens the door to AP automation. Combining the benefits of digitalisation and automation, organisations can streamline their bill payment and cash flow management processes, get access to timely financial information, and reallocate working resources to more strategic initiatives.
How to Automate Accounts Payable
1. Embrace E-Invoicing
AP payment process begins with receiving and documenting invoices from suppliers. Making even a little error can cause major problems later on in the process.
Electronic invoicing replaces the tedious process of collecting and sending paper invoices, greatly reducing the amount of human labour required. To see how it works in practice, click here. Employees simply install a receipt scanning app on their smartphones, which digitises paper documents using optical character recognition (OCR) technology. This makes it easier for account payable staff to obtain expense data and lessens the likelihood of invoices being lost.
2. Streamline Invoice Approvals
Bottlenecks can arise when invoices become stuck in the approval procedures. When an invoice is stuck in the approval queue, it’s difficult to tell where it is or why it got there without business insight.
By automating the approval process, you and your staff can track the progress of invoices on an online dashboard. To shorten the processing time, those involved in the expenditure approval process are promptly informed of the necessary steps to take.
Upon receipt of an expenditure report, the approver has the option to either approve, refund, revise, or reject the expense. The automatic approval procedure keeps track of the approvers and the dates of their approvals. Cloud backup safeguards against lost information, and automation assures more confidence in the end.
3. Eliminate Manual Data Entry
There is a cultural component to the technological process of automating AP. It is therefore imperative that businesses identify all manual entry of AP data and include it in their larger digitalisation effort. Optical character recognition (OCR) technology makes it unnecessary to re-enter data from paper invoices, and automated workflows guarantee the correct completion of all process phases.
4. Automate Invoice Matching and Verification
When checking an invoice, it’s common practice to compare it to both the purchase order and Invoices are double- or even triple-matched with purchase orders and, often, delivery receipts as part of the verification process. This is to guarantee that the right amount is paid and that all the data is in order. Nevertheless, this vital process requires a lot of resources beginning with gathering all the necessary information and is prone to expensive mistakes, particularly as a company grows and makes more acquisitions. Digitisation allows for the automation of matching by eliminating the need for paper.
5. Stop Manual Ledger Coding
An important aspect of accounts payable is general ledger coding. To keep track of costs, a unique code is assigned to each kind of spending. While this does make it simpler to track spending, billing the incorrect department is as easy as entering a one instead of a zero when coding manually. To help businesses keep correct financial records and prevent annoying and expensive mistakes, AP digitisation and smart automation solutions provide a customisable framework that gets rid of the need for manual ledger coding.
Get Started Today: Future-Proof Your AP
Companies can’t afford to ignore the growing importance of automating their accounts payable processes. The advantages are obvious: significant savings, more control over the AP process, and far higher efficiency and data accuracy. Now is the perfect time to embrace this transformative technology. There is no company, no matter how big or little, that can afford to overlook the benefits of automating accounts payable.
