Finance teams are often burdened with repetitive tasks, such as manually reconciling invoices and paying suppliers.
Automating these time-consuming processes can help organisations increase efficiency, improve cash flow and enhance visibility into supplier activities.
To improve this process, many teams utilise Accounts Payable Automation.
What is Accounts Payable Automation?
Accounts payable automation is the use of software to automate, manage and streamline accounts payable functions. It provides automated processing for invoice matching, invoice approval, approvals routing, payment processing and exception reporting.
Accounts payable automation also enables organisations to better manage their accounts payable workflow by improving data accuracy, visibility of invoices, automating repetitive tasks and managing exceptions more effectively.
The system will store all invoices in one easy place, allowing finance teams to easily access them without the need to manually input data at any stage, although approvers may still need to sign off on payments with a mouse click.
Benefits of Accounts Payable Automation
The biggest benefit of accounts payable automation is that it allows finance teams to optimise their existing resources and significantly reduce the time spent on mundane, repetitive tasks.
In addition, organisations get a boost in productivity because employees are focusing more of their efforts on value-added activities rather than monotonous paperwork. They can work more efficiently without referring to multiple sources for information.
Finance teams become far more effective by increasing visibility into supplier activities, allowing them to identify potential account management issues much earlier.
It also enables finance teams to provide full disclosure of supplier activity across the organisation as invoices are stored in one place easy for all teams to access.
Finally, automating processes such as invoice matching and payment processing helps you improve cash flow by making it easy for suppliers to get paid quickly and accurately.
The use of accounts payable automation is a great way for finance teams to free up valuable resources and drive better performance across the entire organisation. As this technology continues to grow, it will be interesting to see how businesses are able to optimise their accounts payable processes further.
Do You Need to Automate Your Accounts Payable?
If your business is spending too much time or resources on accounts payable activities, it may be the right time to investigate automation.
The true value of using an account payable system lies in automating repetitive tasks and improving data accuracy.
If you’re unsure if it’s worth the investment, consider these questions:
- Are employees spending too much time manually processing invoices and chasing payments?
- Is your management information lacking in accuracy and transparency?
- Do they need to refer to multiple sources for information?
If the answer to any of these questions is ‘yes’, then you should consider investing in some accounts payable automation software.
AP automation also helps to identify issues with suppliers earlier and improve supplier relationships.
It provides finance teams with all the information they need to make well-informed decisions, such as understanding which suppliers are late in their payment cycle, missing deadlines or causing unnecessary delays.
Furthermore, this technology has been known to reduce invoice errors, making it easy for businesses to save time and money.
If any of the above will benefit your business, then accounts payable automation is for you.
What Are Some Accounts Payable Tasks to Automate?
The following are some common tasks that businesses typically automate with an account payable system.
Invoice processing: All invoices are stored in one place, allowing finance teams to easily access them without the need for manual data entry. Finance teams can also view invoice statuses at-a-glance, which makes it easier to track unpaid invoices and spot exceptions.
Invoice matching: This allows businesses to automatically compare invoices with purchase orders and payment terms to determine whether they need to be approved or rejected, speeding up the invoice-matching process.
Data entry: Account payable systems allow businesses to store their supplier and customer information in one place, which is then used to automatically populate forms and templates. This provides a “touchless” experience for finance teams, improving accuracy levels and reducing human error.
Approval routing: You can set up approval routing based on your own business rules, automating the process of sending invoices to managers for sign-off.
Payment processing: Most account payable systems can integrate with platforms such as bank portals and e-payments gateways so that suppliers can get paid quickly and easily. This allows businesses of all sizes to make cash flow improvement a priority, improving their cash-to-cash cycle and making them less vulnerable to financial shocks.
Coding invoices: This is a useful feature for businesses that process a high volume of invoices. You can configure accounting codes and even set up new ones, which helps you to improve data quality and make it easier to produce reports for C-level executives.
Risk management: With the ability to track invoice statuses and compare supplier performance against industry benchmarks, account payable systems can help to identify potential problems with suppliers before they cause significant issues.
When Is the Right Time to Automate Your Accounts Payable Processes?
The answer to this question will depend on your business and whether it is already taking advantage of automation.
If you’re struggling to manage your invoices due to the sheer volume of transactions, then it may be time to consider automating your accounts payable processes.
Account payable automation systems can help businesses of all sizes improve cash flow management by making it easier to pay suppliers on time and giving finance teams more visibility over outstanding payments.
If you’re not sure if this technology is right for your business, the following are some signs that it might be time to automate your accounts payable processes:
- You have issues with invoice data quality.
- Invoices are not being approved in a timely manner, which is causing cash flow problems.
- There are delays because of added or missing information.
- You’re spending too much time inputting invoices.
- You need to retrieve the same information frequently in order to complete tasks such as reconciliation or reporting.
- Your business has adopted lean accounting practices, including working with an accounts payable system designed for all organisations.
How Do You Get Started?
Once you’ve determined that it’s the right time to automate your accounts payable processes, you’ll need to choose a system that meets your specific business needs.
There are numerous providers on the market, each with different features and benefits, so it will be important to compare systems in order to determine which one is right for your business.
Our recommendations are Infor SunSystems and NetSuite Financial ERP.
Infor SunSystems is an innovative accounting system that can help you automate invoice processing, manage supplier relationships and improve cash flow. It’s been designed with the needs of all organisations in mind – from managing multiple currencies to providing easy access to important data across all areas of your business.
NetSuite Financial ERP includes an array of features, including 24/7 payment processing that integrates with over 20 payment methods. It also provides risk management tools and support for different currencies.
For more information on how any of these tools can automate your accounts payable processes and increase efficiency, book a call with us today!
