Accounts payable automation software is a digital platform that automates the managing of invoice and payment processes. A business requires that important tasks such as payment of suppliers are dealt with, without any mistakes or delay and the Accounts Payable departments do just that. They have the responsibility of making sure that vendor and supplier invoices are processed in time to keep the business running. Therefore, AP (Accounts Payable) is a vital financial process for any business. This department is usually met with large amounts of paperwork due, and any inconsistency in the order is bound to have somewhat of an impact on business. This is where the AP automation system comes in as it is a one-way solution that can help organizations cut these costs dramatically whilst simultaneously speeding up operations and minimizing risks. Manual account processes are reduced and clear, easy control is provided over financial processes and data collection. 2021 especially, has seen a rapid trend in companies wanting to invest in automation software applications because it has now become trivial for many complex business functions that are essential to business operations. The benefits of this automation affect not only finance but other crucial parts of the business too. According to PayStream Advisors’ 2018 Payables Insight Report, 55% of businesses handle financial data manually. However, in 2020, over40% of small and medium-sized enterprises claim they’re ‘somewhat likely’ to adopt AP automation software in 2021.
Here are the top 5 benefits of Automated Accounts Payable Software for Organizations in 2021:
Finding a way to save time is a necessity for most companies. Customer deadlines, vendors needing to be paid on time, and having enough cash in the bank are all reasons to shorten the AP process with an automated system. The automated Accounts Payable system, which you can check here, manages the end-to-end accounts payable process. In previous times, invoices would have to wait for order approvals before a payment could be made, resulting in a loss of time and efficiency. AP systems remove such delays and simplify complex and tedious processes with little to no human involvement. The system automatically processes invoices, eliminates errors, and can accelerate financial close by a significant amount. According to data from the Aberdeen Group, AP automation equates to around 18% fewer days payable outstanding (DPO), saving approximately 5.55 days on average.
Minimize costs and errors
One of the main reasons why companies want to implement automated AP systems is to reduce processing costs. Payment automation is a must for any successful business. Paper-based transactions are prone to errors and vulnerability. Data management would also be tedious and wasteful of resources. Automated solutions effectively reduce expenditures, as money is saved in various areas such as printing supplies, check stops, envelopes, and postage. Apart from cost minimization, digitalization would also help the environment in a big way. This software would also reduce your process errors and improve the quality of your data. A research carried out by Ardent Partners concludes that the best-in-class companies typically use modern technology to streamline their AP processes, resulting in invoice processing costs priced five times lower than average.
An automation application will help sort out manual errors and minimize data inconsistency at an early stage. There is no need to manually input invoice headers or line-item data either, reducing the likelihood of human error. The efficiency of the business is related to the increased accuracy levels that this system provides. A better relation is formed between vendors, business partners, and even the customers due to reduced delays and automated invoice handling. Regardless of the level of automation, reducing the amount of time an invoice spends in someone’s hand cuts costs and increases efficiency. With payment automation, you can see where, when, and why errors occurred. Unlike the manual process, with automation, you’ll be able to systematically address and eliminate errors to improve quality. According to Aberdeen, vendor invoice error rate decreased from 4.0 percent to 3.1 percent while vendor checks reissued decreased from 1.9 percent to 1.8 percent as the level of automation increased.
Transparency and visibility
Data manipulation is made easier through the help of automated AP systems. Invoice automation can develop clear channels of communications, allowing employees to have a clear view of all the processes, invoices, payments, and orders. You will no longer have to search through paperwork to find what you are looking for as every detail on your invoices and payments can be found instantly. The visibility and transparency of the entire process are increased which can help the company strategize about future development programs or make informed decisions in general. Enhanced dashboards are another utility provided by AP systems. For instance, when it comes to employee reviews, you can use them to analyze employee productivity in as much depth as you want.
The accounts payable section handles large amounts of money every day, but there is less security of paper invoices lying around on desks. With the help of automated systems, each invoice or transaction can be kept track of as each invoice can be assigned a code to be represented by. Most automated accounts payable software have not only an automated invoice processing system but also an automated account payment system, meaning payments are also kept track of as well. Electronic payments manage to save us an appreciable amount of money because paper checks are costly and are much more challenging to monitor. In this era, major businesses and companies are moving to accounts payable software as not only is it easier to use and much more efficient than paper invoices but also because it lets us keep track of all our payments and transactions.
To conclude, AP automation payments can save your cash, earn extra revenue, reduce the risk of fraud, bring your operations greater transparency, meet your customers’ demands, and improve the overall quality of your AP processes.