Accounts payable departments in all industries continue to manually process their invoices and accounts payable teams are constantly busy moving orders, outgoing purchases and invoicing. Manual AP processes require approval, and with so many direct invoices, we can see how these manual procedures are slowing down companies considering today’s more efficient and sophisticated solutions have to be using technology digital. In this blog, you will know 5 Ways To Overcome Accounts Payable In Your Business.
Paper-based manual AP environments, while effective for years, can be difficult to keep up with today. Because can take a long time. Luckily, you can implement automated accounts payable to your processing to speed things up.
Automated accounts payable is a trending topic in the 21st-century business world. You may be wondering what exactly makes these new technologies so unique when tried-and-true manual methods of invoicing are still so prevalent.
If it weren’t for the frustrations so many departments experience with manual errors and delays, perhaps these new technologies never would have shown much promise. However, it’s impossible to deny an increasingly digital world requires unique digital overhauling across various departments. Not only can you eliminate current frustrations through automated accounts payable, but having the best processes in place can skyrocket your potential for growth and give your departments an incredible competitive advantage.
There are so many advantage of automated AP processing, it can be transformative.
- Completing AP Processes with Greater Time Efficiency
Your team will be able to process invoices at a much faster rate using AP automation technology. Without automation, it can take as long as two weeks to fully process an invoice, confirming the numbers and getting all the necessary signatures and approvals. However, with automated accounts payable systems, you can reduce that time to one to seven days.
There are many stages in the invoice processing timeline where you can cut the time costs and streamline your productivity, for example:
. A tool called advanced optical character recognition, or OCR, will automatically index your scanned invoices and decrease your amount of manual data entry. One case study revealed automation eliminated 95 percent of invoice-related data entry. Imagine the benefits of freeing your staff from hours of entering figures and checking whether they’re accurate.
. The digital filing system makes it a breeze to find invoices, rather than searching through stashes of receipts and paper documents.
. Cloud-based storage allows managers to receive access to invoices sooner for immediate approval.
. You won’t have to worry about process delays caused by end-of-month invoice bottlenecking, thanks to individual processing times being much shorter.
Because you’re moving through the process faster, your staff has more time to focus on analysis and offering valuable cash-flow insights to improve company efficiency. You’ll also be much less likely to see time slip away during the process of correcting human errors.
- Improving Accuracy and Reducing Errors
With manual calculations, data entry and various types of communications coming from several departments, there is always room for mistakes. From misfiling and losing documents to paying the wrong amount, process errors can occur at any time, for reasons that may not be easy to isolate and eliminate.
Accounting errors can cost your business in multiple ways. Not only does backtracking and resolving the mistakes take essential time away from performing necessary tasks, but there is a chance human error will result in duplicate payments and overpayment. Errors can also cost regarding your company’s reputation and quality of service.
Imperfect invoices full of errors and exceptions create some of the biggest frustrations for finance employees. Ineffective communication is an area in which costly workplaces failures can occur. Having reliable software on your side that validates data entry and identifies exceptions along the way may be the solution you’ve been looking for to help you continuously improve, ultimately leaving the competition behind.
By automating your accounts payable, the system will recognize inconsistencies and provide unhindered communication by granting all parties digital access to files. Two- or three-way AP matching validates data across the board, ensuring accurate bookkeeping, and the document management system will provide reliable routing, so your AP department can focus on productivity, not just controlling exceptions.
- Saving Money and Optimizing Cash Flow
Naturally, saving time and energy and preventing costly errors can work wonders for your financial invoice processing costs. These streamlined elements grant you a substantial return on investment after undergoing accounts payable automation overhaul. Retraining your staff to become familiar with automation software to increase their productivity may take initial cooperation and adjustment, but industry studies have shown these efforts will quickly pay for themselves.
Here are some examples AP automation benefits related to monetary cost-efficiency:
. Automating invoices imaging can amount to nearly 90 percent savings on processing costs as opposed to manual invoice processes.
. Eliminate printing costs for creating paper copies to file emails and electronic receipts physically.
. Cut down on storage costs for extensive document filing and enjoy the perks of a digital storage system.
. Receive alerts regarding duplicate invoices and reminders of upcoming due dates, enabling you to avoid late fees.
. Cash in on early-pay discounts, which can lower costs by 30 percent or more.
An added sense of control over cash flow can help your organization prevent unnecessary costs and making the most out of potential savings. You’ll also be able to decrease the typical repetitive verification needed to avoid incorrect or possibly fraudulent payments.
- Monitoring Compliance and Increasing Process Control
Adhering to compliance regulations and creating trackable audit trails are part of what makes accounting teams so essential to a company’s success. Without the right systems in place to rigidly control processes and data, there is a chance for details to slip through the cracks.
The Association for Financial Professionals recently projected U.S. companies will experience $19 billion in fraud losses in 2018. Having an automated system to limit users to authorized functions, while simultaneously ensuring invalid invoices get flagged and reported, is crucial for anyone who aims to pull ahead of the competition.
Electronic archives made possible by invoice software enable the tracking of invoice locations, processing stages, authorization rules and compliance with IRS regulations. With an automated accounts payable business process, you can have peace of mind regarding the secure filing and protection of all your invoice processing information.
- Gaining the Competitive Advantage
If gaining a competitive advantage over 60 percent of your competitors sounds appealing, automating your AP processes may need to be your next step. The financial benefits of automation and a quick ROI will give you enough of an edge to set you ahead of the game in many cases. But when you take time savings and error reduction into account, your competitive advantage may become increasingly immeasurable.
The market is in dire need of an upgrade, and you could be a trailblazer in your industry, providing efficient and accurate service where others still rely on outdated, faulty methods.