You can combine accounts payable automation technology with payment automation technology to create the most cost-saving, efficient toolkit for your company’s AP department.
Why does Combining AP Automation and Payment Automation Make Sense? They Cooperate More Effectively:
Empower remote workers with Automation. It speeds up decision-making, simplifies business processes, and eliminates tedious tasks. Your team can work effectively and efficiently from wherever they are while protecting the data and information they use.
Lower fraud risk Automation uses cloud technology which is more secure than any other technology you may have installed on your computer. You can rest assured that the information stored in the cloud will be accessible only to team members with the appropriate permissions. AP and payment automation decrease the number of emails needed to exchange information.
By integrating AP automation and payment automation that enable intelligent document processing marketing communication businesses may recover from calamities more quickly. Anywhere they are, business operations can proceed normally. Your office cannot sustain fire or water damage since you can keep your data in the cloud. It is simple to send invoices to your team, process them further, index them, and send them out.
Saves time and money: Employees can communicate via email instead of carrying physical documents. AP automation and payment automation enable intelligent document processing They are not required to search through file cabinets for missing people.
By integrating AP automation and payment automation, businesses may recover from calamities more quickly. Anywhere they are, business operations can proceed normally. Your office cannot sustain fire or water damage since you can keep your data in the cloud. It is simple to send invoices to your team, process them further, index them, and send them out. Saves time and money: Employees can communicate via email instead of carrying official documents. They are not required to check through file cabinets for missing people.
Top 5 Benefits of AP Automation
Here are the top benefits of AP automation
Improve Consistency and Precision of the Process
Your payment accuracy can be significantly increased via AP automation. The best AP automation technologies have a 99.5% accuracy rate when capturing invoice data. According to the Institute of Finance and Management (IOFM), 3.6% of supplier invoices are produced manually. These mistakes can be challenging to correct and harm a company's reputation. Your AP procedures can be entirely free of human errors with AP automation. Even without the aid of a human, it is capable of error detection and correction. The data in your invoices is standardized by AP automation and put into workflows. This guarantees uniformity and easy payments.
You can Expand and Scale without Hiring more People.
You can expand your firm and bring in more revenue. You won't require more workers to stay on schedule. You can design your business rules using AP automation technologies to fit your needs. Then, your solution uses these guidelines to promptly deliver your invoices to the appropriate individuals for approval.
Even if your business needs change, you can modify your approval procedure in real-time. Without additional resources or stress, your AP department can effortlessly support the continued expansion of your business.
Reduce your Costs
The cost of manually processing one invoice might range from $8 to $10 on average. What a high price to pay! Your invoice processing costs might be as low as $2 per invoice with AP automation. By allowing early-payment rebates, automating your AP process can reduce costs. Most businesses, according to IOFM, only receive 21% or less of these early-payment discounts, and 12% do not. You can avoid late payment fines with AP automation.
Fraud Protection
71% of all businesses saw fraud attacks on payments in 2021, according to the AFP Payments Fraud and Control Survey for 2022. Automation of AP can assist in avoiding this statistic. Get rid of all paper. Pay close attention to which employees can release payments and approve invoices.
Improvement of internal controls and transparency
With the help of these solutions, you can design approval processes that demand multiple parties approve each invoice before payment can be made. You have a better chance of catching fraudulent invoices before they are too late. It also protects against incorrect or missing data, enhancing your process' accuracy.
The Immediate return on Investment (ROI).
By eliminating difficult and time-consuming manual procedures, it can significantly increase your company's efficiency. As soon as your AP automation solution is implemented, you'll notice benefits. In our experience with finance departments, we have observed productivity gains of about 300% per employee. Additionally, we've observed finance departments achieve AP paybacks in under a month and a 60% reduction in processing expenses per invoice.
The Immediate Return on Investment (ROI).
Supplier management has seen significant changes over the past few years due to technical improvements and the expanding globalization of the industry, much like other business processes. Not only is it essential to manage a sizable supplier database and have regular contact with them, but it's also essential to gain a deeper understanding of them and turn them into valuable partners in business operations. Automation of AP facilitates supplier communication and guarantees on-time payments. Both parties benefit from maintaining fruitful relationships as a result.
HOW DO AUTOMATIC ACCOUNT PAYABLES SERVE SUPPLIERS
Businesses prioritize automating AP operations. It facilitates life. Traditional supply chain management may experience delays if the payables payment process is delayed. The procedure becomes simpler, quicker, cleaner, and more effective when automated. Moving from invoices to payments can be accelerated by working with suppliers to implement the payment options they prefer. Faster payments make suppliers happier since they have more money on hand.
You can cooperate if you and your suppliers have a solid working connection. Your security and interests are increased by doing this.
Let's examine seven ways that supplier relationships can be strengthened by accounts payable Automation.
TIMELY EMIGRATIONS
Automating AP operations is a top priority for businesses. It makes life easier. If the payables payment procedure is delayed, there can be delays in the supply chain workflow management approach When a process is automated, it becomes more accessible, faster, cleaner, and more productive. Working with suppliers to implement the preferred payment alternatives will speed up the transition from invoices to payments. Suppliers are delighted when payments are made quickly because they have more cash.
If you and your suppliers have a good working relationship, you can cooperate. By doing this, you boost your security and interests.
Let's look at seven ways that automating accounts payable might improve your interactions with suppliers.
CREDIBILITY
Shipping hold-ups, late payment fines, and credit rating issues might result from late payments. Technology that increases transaction accuracy and efficiency, like AP automation, can be a fantastic way to win over vendors for your company. Buyers can more easily make on-time payments because of AP automation. With your supplier, you can immediately negotiate costs to secure longer-term contracts. Automation of AP can shorten processing times, enhance accuracy, lower expenses, boost productivity, and simplify overall payment cycles. Businesses can decrease costly fines while improving cash flow.
SMOOTH ONBOARDING
The first and most crucial stage in developing a solid supplier relationship is setting expectations. If the vendor and the AP team establish a solid yet straightforward supplier onboarding strategy, everyone will be more at ease. Suppliers frequently want to know when payments will be made and the payment plan. A tailored enrolment campaign can reach suppliers thanks to AP automation. Additionally, it simplifies the procedure for both parties and allows for a smooth onboarding. Due to updated information, suppliers won't have to worry about any payment issues or delays. By collaborating with the best AP automation provider, you'll have access to a committed team that works behind the scenes to guarantee payment quality.
ACCURACY
To be reliable and successful, accuracy is crucial. When automating accounts payable, maximum accuracy is promised. Using three-way matching, AP automation verifies vendor invoices against purchase orders and shipping documents. Data on vendor invoices, including contract-specific information and payment terms, are automatically filled in. Suppliers will be content if they know what you expect of them and what you're willing to do for them.
ENHANCED VISIBILITY
Automation allows you to capture more financial information for advanced analytics. Businesses can provide real-time visibility to their suppliers' transaction statuses. Suppliers can log in from any central location to view the quality of their invoices and payments. They have all the information that they require at their disposal. Communication is enhanced when there's complete transparency. It also reduces the time necessary to answer supplier questions and improves supplier relationships.
CONSTANT COMUNICATION
Communication is crucial for fostering fruitful business connections. The AP department may offer their management and procurement colleagues more excellent data and analytics, which enhances supplier relationships. Regular status reports from AP automation ensure communication via email between all contacts. This avoids misconceptions and confusion that might have expensive repercussions. Preventing supply interruptions helps to safeguard business owners' relationships with suppliers and their reputations.
Read More:- Advantages of Cloud ERP Solutions for your Business
IMPROVED WORKFLOW
Accounts payable processes Automation lessens the commotion caused by manual procedures. It enables instant access via a central place for all stakeholders and permits seamless workflows of all payables processes. 90% of respondents to a 2020 survey said they thought task automation was highly advantageous. As a result, fewer errors, and the work was of more excellent quality. The utilization of workflow data by AP employees to anticipate vendor inquiries and identify whether payments have been made is made possible by AP automation. Automation of AP can lessen fraud and billing mistakes, which relieves stress on both sides.
Ways to Automate Accounts Payable
Save on Costs & Get a Higher ROI
Printing checks and gathering approvals take a lot of time and work for high-paying businesses. It might be expensive to manage accounts payable manually. Examine the following:
Checks Manual check processing costs $5.00. By automating 500 payments, your business can earn $4,800 each month. However, more than half of companies—roughly 45%—use checks for their expenses.
The cost of processing invoices manually is $10.00. Five hundred monthly invoices can be automated, saving your team $12,000 in labor costs.
- Cost of operations: Businesses are increasingly seeking sustainable growth. For the coming year, an average wage increase of 3.9% is anticipated. There will be a 3.9% rise in the payroll budget for recruits. Manual processes are more expensive than automated ones regarding accounting for personnel that oversees AP.
- To provide businesses with quicker payment choices and shorten processing times, this procedure can be automated. Your ROI will rise as you automate additional tasks. Most of the ROI is driven by Automation. To cut costs and improve efficiency, you can digitize as many processes as necessary if you already receive rebates on virtual cards.
- In the current economic context, businesses cannot afford to miss opportunities to boost their working capital. Accounts payable requires a strategic strategy from companies. Automating accounts payable procedures is part of this.
- Supplier resentment may result from payment delays. They may result in longer delivery delays, less readiness to correct flaws, and slow query responses. Your accounts payable staff can choose the ideal moment to pay suppliers thanks to AP automation software. This releases working capital and enables AP departments to take advantage of supplier early-pay incentives.
- 2. Quicker and more precise data entry for invoices
- While an increase in staff may be viewed as a sign of corporate growth, it can also affect your cash flow. Before you post a job request or make headcount requests, take into account how Automation can boost productivity in the current workforce. Following conventional accounts payment operations, invoice data must be manually input before being forwarded for review and approval. Manual invoice payments can result in errors, obscurity, and slow response times. Human error
If your company still accepts paper invoices, your accounts payable department may still be doing so. Businesses can use improved OCR to automate their invoice data entry (Optical Character Recognition). This will guarantee that your accounts payable department do not review invoice exceptions.
Back-and-forth administrative tasks can be eliminated by automating your accounts payable business operations. Additionally, it will simplify the electronic validation of invoices against data from contracts, purchases, and goods.
More Easily Scale
It can be difficult for businesses expanding swiftly to extend their AP departments sustainably. Many companies that rely on a manual process need help to develop their workforce or to recruit the people they require. Compared to companies without an automated AP process, 64% process fewer invoices with the same human resources.
As they grew from four to thirty treatment centers, BrightView Health needed a way to automate its AP processes. When Matt Santell, the controller, first started working there, he observed that between 65 and 80 percent of invoices were mailed.
With the new treatment centers opening, however, the number and frequency of invoices increased at an alarming rate. Invoices were previously at 3,000 per year, but they had risen by more than 230% to over 10,000. BrightView was able to scale its business with AP automation.
- Increased efficiency and fewer errors mean higher time efficiency.
Because there are so many bills to monitor, AP is more prone to mistakes. The same invoice can be paid twice if a supplier mails a statement and follows up with an email. Errors can increase costs, impede cash flow, and sour relationships with vendors.
Finding the time to address pressing company issues or contribute to strategic projects might be challenging when you waste so much time on manual activities, mistakes, and other inefficiencies. Without Automation, processing an invoice can take up to two weeks. To recoup this time, automate your accounts payable procedures.
At numerous points during the invoice lifecycle, your AP department can cut back on time and expenses and increase production. Here are a few instances:
Enhance Your invoices are automatically captured using OCR, eliminating the need for manual data entry.
Instead of scouring paper files and physical storage, your AP department can quickly locate and access invoices by building a central digital form repository.
Accounting managers can easily retrieve invoices for approval thanks to adjustable rules and cloud-based storage.
By sending out individual bills more quickly, your AP department can prevent bottlenecks at the end of the month.
The payment is sent as scheduled, and approved workflows run automatically. Invoices are accurately captured without the need for manual labor. Your staff will be able to spend more time on analysis and providing valuable cash flow insights, which will help improve organizational efficiency.
You can do AP work in a Hybrid Environment.
There are both office-based employees and remote workers in the modern workplace. Companies may benefit from this move since it will make it easier to recruit top talent and provide employees with greater independence. Approvals, though, can get trickier.
According to our 2021 State of AP Report, 58% of respondents thought the pandemic was a driving force for the organization's decision to digitize its financial operations. Among those who were entirely remote, 70% said they agreed or strongly agreed with COVID's contribution to the advancement of back-office digitization. Eighty-five percent of finance professionals said they worked full-time at their jobs before the pandemic. This number decreased by 63% at the peak of the pandemic. Only 22% of financial professionals claimed
Payments and invoices are related. Invoice processing must be efficient if charges are to be made on time and correctly. You can keep a consistent workflow while efficiently synchronizing invoice and payment data with the accounting system in both remote and physical contexts with AP automation.
Paper and manual processes will no longer be necessary for organizations that want to manage their AP processes effectively and efficiently in a world where many workers work remotely or switch back to hybrid settings.
- Increased process visibility
Businesses with several entities frequently need to pay multiple suppliers and invoices. The general ledger must be updated with all of this data. How does your company keep everything under control?
Although it might think that Automation would make processing invoices more challenging, we discovered the opposite. Automation of the accounts payable operations improves visibility and limits access to pertinent information to those who are authorized. Accounts payable reports can be automated to help you quickly identify late payments, aging invoices, typical approval times, and how long it takes to pay an invoice. No matter where a problem occurs, your AP department will immediately be aware of it and have all the knowledge necessary to resolve it.
You will be able to pinpoint the source of any issues thanks to this comprehensive picture of your AP data. You may create a central location to send invoices, automate payments, and track spending with multi-entity AP automation extraction solutions without using any manual labor.
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Monitoring Compliance and Improved Process Control
Countless sums of money come from accounts receivable to fraudsters. Checkbooks and blank stock are frequently left in plain view in a drawer. There is no need for approval to write a check. Teams in charge of accounts payable are essential to a business's success. They must follow compliance guidelines and establish audit trails that can be followed.
Without the proper systems in place, there are many ways for details to get missed and fraud to go unnoticed. Accounts payable procedures must be automated to restrict authorized users and ensure false invoices are reported and flagged.
