Managing cash flow can be tough for business owners. With 1000+ tasks to execute and continuous efforts to guarantee customer satisfaction, often accounting doesn’t receive the care it should.
If not addressed, it can impact your liquidity drastically and lead to insufficient funds for daily operations. Thus, organizations worldwide are leveraging accounts payable automation to optimize processes and focus on core business aspects.
Let’s understand why businesses need to invest in automated invoice processing.
Need for Optimizing Invoice Approval Workflows
Optimizing accounts payable is the key to achieving efficiency. Automated payment processing can reduce manual errors, ensure timely payments, and enhance accuracy.
However, simply purchasing a solution is not enough. Having robust AP automation solutions and providing adequate training to your accounts team is a must.
Accounts payable automation is much more than achieving operational efficiency. Rather, it is a means to boost financial stability and build a strong rapport with suppliers.
How Does Accounts Payable Automation Work?
Accounts automation solutions let you process supplier invoices, record payments, and close completed invoices seamlessly. Automation is the best way to relieve your teammates of their heavy duties and let them focus on strategic tasks that require human attention.
1. Multi-Step Workflows
Automated accounts payable involves a series of steps to ensure that invoices are correctly recorded and paid. The process not only saves time and money but also reduces errors by a great margin. Manual workflows require multiple approvals and there are chances that they may get lost when passed between multiple team members.
Given the fact that 67% of accounts prefer cloud accounting, a cloud based accounts payable automation solution can be a great fit.
2. Digital Storage
Not all your vendors are tech-savvy. Some still send paper-based invoices. Luckily, automated accounts solutions will let you upload them and leverage optical character recognition (OCR) to extract the required information and keep digital records straight.
Luckily, these solutions keep track of all vendor data and let you schedule payments. Moreover, you will always be in the know-how of where the invoice is in the processing journey. Last, but not least, you can maintain access controls and never miss out on any information.
3. Automatic Matching
AP automation tools let you record any discrepancies and match invoices to avoid duplicate payments. Advanced algorithms can catch errors that may go unnoticed by the eye when matching is done manually.
When all information is aligned, the software schedules the payment and clears the invoice. Post that when the vendor accepts the payment, the invoice is recorded as paid and the total amount is added to your balance sheet.
5 Ways To Automate Accounts Payable
Accounts payable automation can help you eliminate the need to hire a full-fledged financial team and help you cut costs.
1. Set Up A Remote Payment Process
When remote work has become the normal norm, manual payment processing needs to be ruled out. Implementing digital payments is a must to ensure that no invoice is lost in a paper trail. Moreover, these payment methods let you send automated receipts to ensure transparency on both ends.
2. Use Digital Invoicing
AP automation software lets you record all invoice details. The best part is that these tools can read multiple invoice types and manage details accordingly. Thus, aiding fluidity in your workflow and simplifying tasks in the long run.
3. Minimize Approval Steps
Getting approvals for a single invoice can be tricky. Leave alone handling multiple invoices. Luckily, accounts payable automation lets you send information directly to approvers and get your job done in no time.
4. Simplify Matching
Matching invoices with the correct payment can take a lot of your time. Authenticating information like company ID, deliverables, and other information is a must before closing an invoice. Accounts payable automation will help you allocate unique IDs to all vendors and then match them with the ID and payable amount. This will help never go wrong with your payment cycles.
5. Streamline Bill Payments
Tracking when to clear invoices is a tedious process. Automating bill payments will help you ensure that invoices are delivered on time. Also, there will be no issues in calculations when a fee arrives for late payments.
Conclusion
Selecting a good AP automation software will help you automate 75% of your accounting tasks. To ease your burdens, we have built our Solution- Serina. With real-time analysis, automated invoice processing, and top-notch risk management abilities, financial management issues are a thing of the past.
FAQs
1. Can businesses automate accounts payable?
Yes, accounts payable automation lets companies process invoices without manual intervention. Thus, offering a digital workflow to reduce the burdens of your accounts team.
2. How to use AI in accounts payable?
AI, ML, and RPA (Robotic Process Automation) lets tools capture and analyze real-time data. This, in turn, helps in streamlining multiple accounts processes.
3. What is the benefit of AP automation?
Accounts payable automation leads to faster invoice processing, prevention of duplicate payments, and timely payments to suppliers. Thus, improving vendor relations, boosting profitability, and being seen as a reliable client.
4. Why do we automate accounts payable?
Automating your accounts payable process has a series of benefits that directly correlate with cost savings, greater ROI, improved invoice data entry, greater time efficiency, improved visibility, and more.
