AP Automation Best Practices

Best Practices To Automate An Accounts Payable Software

Today accounts payable is considered to be one of the most broken financial processes in all of the business. Because of this, various organizations looking to automate their accounts payable processes and solves this problem. There are numerous cases where processes surrounding AP functions need to take full advantage of all possible savings generated by automating accounts payable.

Here, we present a list of best practices as an important part of accounts payable automation strategy so businesses can ensure that they will be able to maximize the profits of automating AP process.

1. Centralized Scanning of Invoices into Workflow on Receipt Day

This is one of the most critical steps to minimizing the invoice process turnaround time and achieve cost savings. Capturing invoices immediately provides real-time visibility, enabling efficient cash flow checking and the potential of maximizing discount options for pre-payment.

2. Automating Invoice Matching for a Quick and Efficient Processing

Terms such as 2-way, 3-way, and 4-way match are mostly bandied about and what meaning do they have to your organization? Matching purchase orders with received invoices or with goods received makes sense but can give rise to many problems if an organization’s system does not communicate properly, and the information is not available for syncing electronically.

In the case of 3-way matching working efficiently, the goods received module must be active in the system. 4-way matching records goods that have been accepted and have been shifted to the destination and thus making it necessary that all components of the system are easy to communicate and compare values. Automated matching minimizes the manual labor involved and enables direct processing when a match is achieved.

3. Simplifying Your Company’s Approval Hierarchy

Many times, approval hierarchies are complicated and impractical as organizations add levels and layers to have bullet-proof protection, often at the cost of process time. Approvals must be done on time and by suitable management. Moreover, restricting approvals to 2 levels ensures a smooth and safe approval flow.

4. Easy Electronic Approvals
Workflow approvals should be a prioritized step every day. Just like with daily emails, a manager can deal with the electronic approvals that are presented in an inbox and can be quickly cleared off early, unlike the paper-based approval tasks that are dragged for a considerable period.

5. Purchase Order Creation

Accurate purchase orders enable matching invoices to be passed straight for processing and payment and allow for more time to focus on exceptions and discrepancy resolution. By streamlining processes and ensuring stakeholders understand the relevance and impact of detailed purchase orders, businesses can optimize the benefits of their automated AP process.

6. Invoice Structure Requirements

Correct invoicing enables accurate and prompt payments. So, ask your supplier to comply with simple guidelines in return for prompt payment terms, and this will be the first step in building stronger supplier relationships.

7. Visibility to the Chart of Accounts

Keep it simple and accurate for management to conduct approvals. Ensure that the technical and approval process is relatively pain-free by including easy access to drop down menus to the standard Chart of Accounts.

The Bottom Line

Best practices should be implemented to support Accounts Payable automation and let your accounts payable department running smoothly. Together, suitable policies and quality AP software can improve cash management, save money, and speed up invoices processing.

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