Even if you have your accounts payable processes down to a fine science, mistakes can still happen. That’s just the nature of mostly paper-based processes. And if you’ve ever found yourself wondering, “Did we pay that?” and unable to confirm that in less than a minute, then you should consider automating your AP processes. Eliminating mistakes and having immediate knowledge of your invoice status are just some of the benefits you can realize with accounts payable automation.
Read on for the rest of the benefits of automating your AP processes.
1. Significant Cost Savings
Cost savings comes first because the savings are truly substantial. When you automate your accounts payable processes, you’ll see significant cost savings across the department.
Some examples are:
- Less money spent on mailing invoices for approval
- No costs to print or copy documents
- Less money spent on office supplies
- Free up your staff to work on other projects
- Take advantage of early payment discounts
We’ve even heard from a client who had someone in their AP department retire, and because of how much was automated, they didn’t need to replace them. Not only did that save them in payroll, but also any costs associated with hiring and onboarding.
2. Eliminate Manual Data Entry Errors
No matter how skilled your AP employees are, there’s always the possibility of manual data entry error. We can’t help it! We’re human! But by automating your AP processes, you can eliminate costly data entry errors.
When you add documents to your software, the software automatically grabs important information and indexes it. An automatic workflow kicks off as soon as the invoice is confirmed and goes right to the designated approver. Once the process is over and everything is paid, your records are stored securely in your ERP and document management systems.
3. Better Vendor Relationships
No matter how great your vendors are, they’re going to get annoyed if you continually pay them late.
But when you implement AP automation, one of the benefits is that you can ensure that your vendors are paid on time, or early, every time. This will strengthen your relationship and that can lead to:
- Early payment discounts
- Product or service discounts
- Industry insights you’re unaware of
- Early access to new products or services
- More customization to your specific needs
- Referrals of your business to others
Once you get comfortable with your automated AP software, there are some that even allow for a vendor portal. Your vendors could log in and see the status of their invoices, which will eliminate many of the calls and emails.
If you don’t want to give vendors that kind of access, at least you’ll be able to give them the information quickly by just checking your system.
4. Immediate Approval Workflow
Ah, approvals. How much time in your day do you lose to chasing down approvals either in-person or by email?
One of the benefits of accounts payable automation is that you can create workflows that will immediately send off the invoice to an approver. And if the approver takes a while to approve? Follow up emails can be programmed to send with a reminder.
If you have multiple approvers, you can build the workflow to send to every single one. And if one of your approvers doesn’t approve the invoice? No problem. The workflow will send the document back to the AP department to handle whatever needs to be fixed.
Best of all, that entire document history is saved within your system, so you’ll know exactly who approved which invoice and when.
5. Easier 2-Way and 3-Way Matching
We don’t need to tell you why 2- and 3-way matching is important in accounts payable. What we can tell you is that automating makes this process much easier and take far less time.
You can do this by following these simple steps:
- Add your documents to your document management software either by scanning paper or uploading PDFs
- The system pulls the information from the documents (or you can manually enter it into index fields)
- Do a simple search or run workflow to group the related documents together by the PO number
That’s it! Your days of getting up to pull documents from the filing cabinet and cross-referencing them by hand are over. The only time a human hand touches the invoice is if you scan it into your system.
This is also helpful if you have an audit – just pull up the related documents via a simple search! More on that later.
6. Quickly Identify and Solve Exception Processing
Another one of the benefits of accounts payable automation is that it will immediately identify invoices that don’t match the purchase order.
Once the invoice is brought into the system, based on rules you set up, it will try and match itself to the accompanying PO. Then you will be able to compare the documents and make sure that the amount matches.
If it doesn’t, you’ll have all the information right in front of you when you call the vendor to solve the error.
7. Stress-Free Accounts Payable Audits
Even though they’re important, nobody looks forward to an audit. Combing through files just to find a single document is time consuming for both the employees and the auditor.
With AP automation, audits take much less time and are far less stressful than keeping everything on paper. Here’s how:
- Putting every invoice, purchase order, receipt, etc. into the system means that you can find any document you need with a simple search
- Document audit trails show exactly when a document was added, who looked at it and when, who approved the invoice, and when it was marked paid
- Auditors can spot discrepancies quickly via the dashboard or a search
It’s also highly likely that the last bullet point won’t even happen, but it’s better to know about a problem sooner rather than later.
With AP automation, audits are over in a snap and your department can get back to work.
8. Greater Visibility into Business Finances
When your invoices and purchase orders are all on paper, it’s hard to have a sense of what stage of approval or processing that every invoice is in. That also doesn’t make it easy to know how much money has been paid compared to how much still needs to be sent out.
But with a good AP Automation software, you’ll be able to have instant insight into the status of your invoices.
Some software, like Vision360, has an impressive dashboard feature that lets you look at your invoices holistically and see their status, history, and accuracy. Software like Square 9 GlobalSearch lets you group invoices into specialized searches so you can see what’s outstanding and where it is in the approval and payment process.
As you can tell, automating your AP processes will truly give you some powerful benefits and take your department to the next level. With invoices handled quickly and completely when they come in, your employees will have the time to focus on higher level work.
This post is part of the comprehensive Datamation Guide to AP Automation.