Despite rapid technological advancements, many accounts payable (AP) teams still feel the burden caused by poor processes. Although manual processes may appear to offer greater control, AP teams recognize the need to prioritize automation of their workload, reducing their stress and strengthening their vendor relationships.
Why AP Inefficiencies Are Costing Distributors
Manual AP processes could be costing your business more than you think. Without an automated system, you’re more likely to lose invoices. Chasing down vendors for replacement invoices takes time away from higher-priority work.
Relying on manual AP processes also puts you at risk of falling behind on payments. Late payments can result in costly late fees, and overdue charges typically run 1% to 2% per month of the invoice amount.
These AP inefficiencies may adversely impact your relationships with vendors. When you consistently pay invoices late, vendors may prioritize other customers over you or tighten your payment terms. In some cases, some vendors may even sever the relationship entirely.
AP inefficiencies may also hurt your cash flow. Without a clear picture of upcoming payment obligations, you may find it challenging to forecast and manage cash outflows. As a result, you may incur late fees often or miss out on early payment discounts.
Eliminate AP Inefficiencies in 4 Steps
1. Centralize Invoice Intake
AP teams that rely on manual invoice processing often make data entry errors or misplace documents. These inefficiencies can come at a hefty cost.
Businesses that use manual AP processes spend $12.88 to process an invoice. In contrast, companies that use payment processing automation spend $2.78 on average. So, if your business processes 1,000 invoices monthly, you could potentially save $10,100 through automation.
With AP automation, you can reduce data entry errors and document loss by consolidating invoices from multiple sources, such as email, mail, text, online portals, or even messaging apps.
When team members work from a single source of truth, they’re less likely to make costly mistakes. With Worldview’s enterprise content management solution, teams can collaborate on documents from a central location — saving them precious time looking for scattered documents.
2. Automate Data Extraction and Matching
Manually extracting invoice data, such as invoice numbers, vendor names, and payment terms, from multiple invoices can be time-consuming and error-prone. Your team might fail to catch duplicate approvals and incorrect payments.
AP order acknowledgement automation tools can auto-match invoices with purchase orders and delivery receipts, saving your team hours of laborious, manual work.
3. Streamline Approval Workflows
The average AP team takes 9.2 days to process a single invoice — often due to bottlenecks in the invoice approval workflow, such as errors or dependence on email approvals. There is a chance that your vendors may not be paid on time, which could strain or end your relationship with them.
AP automation allows you to set up escalation rules to prevent delays, as you can route invoices directly to the right approvers, even if multiple approvals are needed.
4. Enable Real-Time AP Visibility
A lack of visibility can make it difficult to track invoices and payments, resulting in missed invoices and late payments.
With AP automation, you can monitor the entire distributor AP workflow in real time. You can then make better decisions that speed up payments and strengthen supplier relationships. You can also gain insights into upcoming payments and improve cash flow management.
Worldview’s AP automation tool has an intuitive dashboard that gives accounting teams access to essential real-time data. Whether you want to know what’s pending, approved, or who’s handling exceptions, our dashboard provides complete visibility into the AP workflow — from receipt to payment.
Turning AP Into a Strategic Asset
Automating your AP processes can improve your bottom line by enabling you to capitalize on early-payment discounts, avoid late fees, and improve cash flow management. AP automation can also allow you to make timely payments, improving supplier trust — a win-win for both your business and suppliers.
Despite these benefits, it’s not necessarily wise to automate all of your processes at once. Instead, gradually optimize your AP processes by starting with high-impact areas, such as approval workflows. As you spread costs slowly but steadily, you can reinvest savings into your next automation phase. You’ll see positive results from each improvement as AP teams adapt to the changes, ensuring smooth integration with your existing ERP or accounting software.
WorldView can help you automate 90% of your AP processes, allowing you to focus on strategic initiatives like improving vendor management or forecasting spending patterns to optimize cash flow.
Contact us today to learn how WorldView solutions can improve your AP workflows.
