Automation and Account Payables Automation
All you should know about Automation and Account payable automation
Automation can be defined as “the technique of making an apparatus, a process, or a system operate automatically.”
What is Accounts Payable Automation?
Accounts payable automation is the application of technology to streamline and optimize accounts payable processes, removing manual tasks and offering better control and transparency over critical financial data. Integrating your procurement and accounts payables approach with an account payables software solution is recommended to reduce costs and associated risks while increasing control and compliance. Accounts payable automation enables businesses to process supplier invoices without human interference by creating a digital workflow to manage steps that were originally managed by an AP staff member. Accounts payable automation can provide a company with significant cost savings in addition to the anticipated savings from eliminating manual tasks. Businesses can enhance their distributor investments, avoid duplicate or inaccurate payments, and benefit from early payment discounts. Comprehensive and integrated accounts payable automation begins with digitizing invoice data, typically through scanning or capturing method such as optical character recognition (OCR).
Accounts payable automation software selection
Organizations seeking to automate accounts payable should thoroughly research various Account payable automation solution options to achieve the best fit for their company. To ensure the right automation of accounts payable, costs, and time savings, the accounts payable automation software chosen must support every invoice processing scenario. Furthermore, it is critical to understand how the new AP automation solution combines with the existing ERP to secure data synchronization and a streamlined process that eliminates manual tasks while automating accounts payable.
What then is accounts payable process automation?
Accounts payable process automation is a strategy for reducing human intervention in the trade payables process and eliminating error-prone tasks. AP is mostly accomplished by integrating accounts payable software with the online business network that digitally connects trading partners.
AP automation improves efficiency and effectiveness by:
• Speedy billing approvals: Errors are identified and rectified before submission, and invoice data is e-mailed to the inbox of approvers.
• On-time payments: With speedy approvals, payment data is captured more quickly, and payments are sent instantly on the scheduled date.
• Improved visibility: Suppliers can track invoice and payment status through the online network.
• Better working capital management: Payments can be scheduled to better manage cash and take advantage of early-payment discounts.
While considering whether or not to automate your business process, you need to also think of what you will achieve if your processes is automated; consider the costs and time you would save if you choose to automate your account processes which will automatically reduce the pen-paper way of keeping records. You should save time by focusing more on the growth of your business when you automate business workflows.
Automation will reduce or eliminate repetitive tasks, which means you will no more do task like chasing payments or recurring invoices of the same or different classes one after the other. With automation, you can Increase your debtor’s collection period through its automated payment reminders which keep your accounts receivables abreast of payment deadlines.
Automations make it possible to categorize transactions even if you have a hundred or more of them on like when you do not have an automation process on ground which will make you miss several transactions. Automation makes it easy for you to charge your old clients for future transactions. It makes automatic deductions for recurring invoices of any saved card details that is linked to a particular customer.
Here’s a secret, In order to make strategic influences you might need to automate your business.
You can link your procurement and accounts payables in the following ways when you automate your accounts payable
- You can decrease your invoice errors and exceptions
- Enforce high level of compliance and prevent contract leakage
- Increase in capturing of early payment discounts
- Reduction of invoice processing costs
- Engaging your accounts payable and receivable department in a more strategic way.
When you automate, your eyes will be opened to the secret of how you have been working in a less efficient way while using the conventional pen-paper method. Paper restricts you and your distributors from having instant access to invoice and payment status information. When mechanical accounts payable techniques require data capture, invoice handling, and reconciliation, it depletes resources. All of this slows the movement of your accounts payable process, and it may result in late payments.
Therefore, late payments result in missed early-payment discounts and additional financial pressure for suppliers. In cases where you keep having late payments then your business becomes questioned by your customers or vendors.
On the other hand, Let’s consider when your business is automated Accounts payable software integrated with a digital business network that connects you to all of your suppliers can be automated. Errors can be corrected before invoices reach your accounts payable system. Aside from lowering costs and risks, you’d have more time and resources to add value to the business.
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