In any industry, accounts payable is an important function when it comes to running a business effectively. But many businesses still process paper invoices manually, which takes an unnecessary amount of time. AP automation can help agencies process their invoices and payments more effectively, freeing up the accounting team to focus on other tasks. But many businesses have yet to adopt this process, with 33% of accounts payable departments reporting that they use little to no automation.
Accounts payable automation is a process by which accounting staff members use software to perform different parts of their workflow. It serves several purposes, including improving efficiency, reducing processing errors, and saving time. Administrative team members don’t have to manually code invoices or send them for approval, allowing vendors to be paid faster.
Automation helps save businesses money by cutting down the time workers spend on administrative tasks. On average, it costs between $15 and $40 to manually process an invoice. This depends on a range of factors, some of which include data entry errors and time waste.
The process of coding and submitting invoices for approval is often time-consuming. AP automation software speeds up the process, allowing staff members to make invoices available in real time for review and approval.
Wasted time is a big factor in increasing costs. When invoices go missing or are lost altogether, accounts payable employees often spend time sifting through files in an effort to find them. With AP automation tools, invoices can be scanned and stored electronically, reducing paper waste and making it easier for an employee to search for the correct records. If an invoice is ever missed during a payment cycle, the AP team can locate it more easily and resolve the issue.
An AP automation platform can read a scanned invoice and automatically populate various fields, making it easier for managers and other team members to interpret the data. They can also look at the original scan and verify entries against other systems to reduce processing errors.
Vendors who receive prompt payments are more likely to stick around than those who have to jump through hoops to receive their money. By automating parts of the accounts payable process, businesses can quickly approve invoices, and vendors can receive payments on time. Depending on the vendor, this can save a company money from late fees that add up as an invoice ages.
AP automation benefits staff members by streamlining their workflows and making their jobs easier. Instead of wasting time on repetitive tasks like coding, filing, and looking for invoices, they can concentrate on other aspects of their jobs. This type of software also allows the accounting team to track payment deadlines more effectively, helping ensure that vendors are paid on time.
With a cleaner report and better data, the management team has a better idea of the business’s cash flow and can make better decisions. The team can also access historical data to predict cash-flow trends that will help the business run more smoothly all year.