Finding ways to optimize operations, reduce costs, and improve efficiency is a key goal for many business leaders. And it is both a valid and necessary goal, as companies that fail to innovate and keep up with the market face the risk of falling behind.
If your business is still utilizing manual accounts payable processes, then there is a simple way to achieve all three of those goals in one swoop.
Accounts payable automation has the potential to radically transform the way that businesses handle their invoicing process by eliminating the need for manual input through automated workflows.
Today, we will explore three of the key ways that accounts payable automation can bolster your business and pave the way for stronger growth in the future.
1. Streamlining manual processes
Manual data entry and invoice handling are major inefficiencies that reduce the agility of businesses, with invoices potentially taking weeks to make their way through the entire process.
Team members need to manually handle every single step of the invoicing process, from inputting it into the system initially, matching data with purchasing orders, chasing approvals and processing payments. It goes without saying that automating all those manual tasks immediately strengthens a business.
With the support of an AP automation platform businesses can effectively automate the entire lifecycle of an invoice. The technology can automatically capture and process invoices upon receipt, quickly filtering them into the system and beginning the process of approvals.
Automated workflows – predetermined by stakeholders – ensure that all invoices are sent to the appropriate departments and individuals without delay.
With the prompting of automatic notifications and reminders, any approvals that need manual intervention are handled in a prompt and efficient manner.
2. Reducing processing costs
When using time-consuming and labor-intensive manual invoicing processes the cost of handling a single invoice is relatively high.
As it takes so long for an invoice to make its way through the system and requires so many manual touchpoints it naturally accrues a higher associated cost. This only worsens when paper invoices are still in use, as those also attract costs through printing and physical storage.
But once automation has taken over the most time-consuming parts of the invoicing process,this immediately brings down the processing cost. Invoices are processed faster and with less manual input, lowering the associated labor cost.
Additionally, the improved efficiency of utilizing an accounts payable automation platform can translate into further savings for the business. Faster turnaround times on invoices mean that businesses can take advantage of early payment discounts or incentives, improving overall profitability in the process.
3. Reducing human error
Part of what makes manual data entry so time-consuming is the fact that inputs need to be double checked, to ensure that typos or errors have not slipped through.
Any mistakes on an invoice could lead to costly issues further down the line, so it is important for businesses to make sure that invoicing data is as accurate as possible.
Accuracy is another measure that is improved with the support of AP automation, with the automated data entry far less susceptible to errors.
AP automation platforms also reduce the likelihood of misplaced invoices or duplicate payments, all of which can lead to financial discrepancies and strained supplier relationships.
The system also matches invoices with purchase orders and goods receipts, authenticating the data before it can go through to payment and flagging any potential discrepancies.
These are just three of the ways that implementing the use of an accounts payable automation platform could give your business a leg up.
Moving away from labor-intensive manual tasks is a clear step in the right direction for any business that wants to stay ahead of the competition.
