The way you manage your AP processes can have a significant impact on your organization’s cash flow, fame, and growth. To be effective, accounts payable must be accurate, competent, and cost-effective. Rather than just being a necessity, AP departments are taking a new approach and incorporating AP automation software to help future proof their accounts payable operations.
An automated AP software solution can transform your accounts payable processes by eliminating data entry errors and manual processes, which ultimately reduces the burden on your AP staff.
In this blog, we present a few best practices that help you create an efficient AP process and enhance your organization’s cash flow.
Streamline Accounts Payable Workflows and Processes
The initial step in getting the most out of your AP system is to inspect your existing workflows so you can streamline your accounts payable processes.
A simplified workflow will let you place your invoices in a central location that you can easily access. It also enables you to automate key business processes by removing manual data entry, automating the approval of vendor invoices, and validating the accuracy of invoices and payments. An automated AP system streamlines your accounts payable process so you can be more efficient and focus on enhancing your organization’s bottom line.
The main thing when streamlining your accounts payable workflows is to make sure that your software is easily scalable as your business develops. You don’t need to spend money on continuous upgrades or gain more expenses when your accounts payable requirements to expand with your business.
Digitize Accounts Payable Data
Automated AP processes need to manage and digitize your data within a centralized system. Sophisticated OCR technology and AI eliminates the need for manual data entry, giving you more accurate data and invoice information right at your fingertips. This includes invoice images, supplier data, reports, taxes, workflows, discounts, and more – all in a single online solution.
Advance Invoice Management
Manual invoice management could lead to late payments, penalties, and ruin supplier relationships. An automated AP software solution helps enhance invoice management and invoice processing.
Digitizing data and workflows with an automated system can eliminate more than 80 percent of your manual workload. Introducing new systems into your accounts payable automation strategy can make your digital processing environment even more powerful. For instance, adding a document management system will enable you to automatically store, manage and retrieve volumes of documents, reports, and images across the company – including tagging documents to the invoices they belong to. This makes AP and processing invoices easier and quicker for everyone.
Build Better Supplier Relationships
The result of your AP automation depends on your supplier base and whether they are ready to adapt to your new processes and practices.
You should make sure that the solution used by your AP team and your suppliers are compatible and can share data without exposing either party to risks.
If your suppliers are not willing to adapt, it is essential to maintain communication, so they are aware of your new policies and know how your solution handles invoices and payments.
If you have good relationships with your suppliers and generally make larger purchase orders, they would be happy with the changes. Finally, streamlining AP and making it more efficient will increase invoice processing times and supplier satisfaction.
Look for Early Payment Discounts
Just like you want your clients to pay on time, your vendors also want the same thing, and they might offer early payment discounts. Automated AP system allows for better cash management and faster approvals so you can capture early payment discounts more efficiently.
Continuously Track KPIs
When you modify a process or workflow in AP, you should continuously track, analyze, and make enhancements to make sure you’re getting the most out of it.
Generate a detailed analytics report on your AP process KPIs and its performance to determine if your system is working for your business. Understanding the key metrics will help you make crucial decisions about where to improve your process and workflow optimization efforts.
An automated system simplifies tracking and enables you to find potential problem areas and reinforce others, ensuring your suppliers see the best performance.
The best AP automation practices will help enhance your accounts payable process and transform the AP department. With less time-consuming errors to rectify, your team can avoid costly mistakes, get early payment discounts, focus on essential tasks, and improve your organization’s bottom line.