Today, businesses are tired of following the traditional accounts payable processes and need to do something to update it. As per a survey done by the Institute of Finance and Management, nearly 88 percent of businesses are planning to minimize the quantity of paper invoices that they receive from vendors by 25 percent. Most enterprises are expecting to eradicate the use of paper invoices that they are currently receiving.
Organizations have realized that automating their invoice approval procedure helps in delivering huge dividends when compared to the companies that depend on traditional processing such as pen and paper.
Here are five key benefits of using an automated accounts payable system:
a) Reduces the number of human errors on purchase order invoices.
b) Requires less time to process an invoice.
c) Provides the finance department with granular insights.
d) Route invoices above a specific amount to the correct authority.
e) Create and maintain approval timers, validate payables, balance workloads, and more.
Here are few important considerations you must keep in mind before evaluating accounts payable solutions that successfully fits your business requirements.
a) Provide Real-time Data
An accounts payable software solution should have the ability to merge data on currencies, subsidiaries, payment methods, and various regions into one file which is available when payments are processed. It is easier for the users to review all payments executed, access data in the invoice details, and download the reports in order to close the account and ensures that the payment results can be synced automatically with an existing ERP or accounting system.
b) Automating Payment Method
Automating the process of disbursement can help businesses to eliminate the tedious work like manual data entry across different bank portals, high bank fees, and inflated overhead expenses. A solution regardless of the mode of payment, currency, or country allows businesses to upload a single file for all vendor payments. Then the system parses payments and submits them by using a suitable format without any interaction required from staff. Later the data for each payment method and status is reconciled and uploaded to the ERP system. It helps the vendors to select their preferred mode of payment and provide bank details through self-service portal.
c) Self-service Vendor On-boarding
Automating the process of vendor on-boarding eradicates the need to clean emails for banking information, update vendor contact, send request for tax forms manually. The portals automate the entire process of gathering vendor information such as banking details, validating tax information, assigning ID’s to vendors, and checking any kind of duplicate records. Few portals also allow the vendors to select payment procedures and currencies.
d) Use of Virtual Cards
Payments made by virtual cards can get processed quickly than ACH transfers. Such cards use tokenization- a process to create one-time card numbers for users for each and every payment. So, it protects your organization’s payment information while accelerating payment procedure. The accounts payable software will assemble virtual card platforms into the solution and also offer a list of all the vendors that will accept your card.
To Sum Up
There are numerous ways to automate accounts payable software that in return can overwhelm many financial leaders. The automated solutions can help eliminate almost 97% of workload and frees employees to focus on more productive work.
Switching to an electronic mode of payment is not an easy task and one must keep in mind to look for a solution that can help make check payments easily on your behalf, especially when you are planning to make electronic payments as the most crucial part of vendor payment strategy.