Invoice processing and accounts payable management is considered to be a reflexive function of business, but digitization has allowed the process to become more strategic. Accounts Payable solutions streamline the entire process, ensuring that best practices are being implemented consistently.
The following are proven methods you can use within an accounts payable solution to streamline the business and maximize benefits:
Digitalize Supplier Invoices
Accounts Payable (AP) solution can help deal with three main AP challenges – routing invoices manually, entering data manually, and dealing with paper invoices. These challenges are what accounting professionals experience when they don’t automate accounts payable processes. Spending hours on fixing various issues can be very costly, but AP software can automate the entire process and store the data in a centralized location.
Automate Invoice Validation and Matching Mechanisms
Once the process is automated and the invoices are digitized, it’s time to verify and validate the invoices against POs. With an automated accounts payable solution, you can verify your invoices against purchase orders and the requisition information. By doing this, the accounts payable department will focus on the invoice approval process as well as reviewing exceptions, rather than spending most of their time on manually entering the data.
Eliminate Invoice Rate
Cutting down your monthly invoice rate is the best start to streamline your AP process. Look for low dollar payments made to suppliers and do not overlook expenses connected with employee travel and entertainment. To limit invoices, shift purchases to credit cards. You don’t need to control your expenses or spend time handling additional and redundant invoices.
Switch to Fully Electronic Payments
By switching to electronic payments, you can utilize various payment methods such as ACH. More than half of companies are still using checks and most don’t know that the cost of sending a check is ten times more than the cost of receiving and sending ACH transactions. Therefore, switching to completely electronic payments reduces the total costs associated with the AP processes.
Making payment process centralized will help you manage greater volume of payments. Allowing staff to approve payments from your ERP or accounting system enables your business to send a consolidated file of ACH payments, checks, virtual card payments, and other transactions directly into your bank account.
Besides automating the accounts payable process, the solution can identify fraud while ensuring the payments made are legitimate.