Previously observed as a back-office function, accounts payable (AP) is identified as the team that acts as the main hub for controlling spend management. As AP shifts into a visible role of handling spend, the employees get the opportunity to take an increasingly strategic role.
If you work in AP, you might be wondering how it’s going to keep up with the demands being placed on as accounts payable takes on a pivotal role in the organization. Or, maybe you want to figure out a way to convince other workers in the company to value the contribution that AP makes.
Accounts payable automation streamlines AP processing so that it is simple for workers to do their work. It frees up time for them so that they can take on value-added activities for the organization, like leaning into a strategic role that AP can fill.
The Case for Accounts Payable Automation
Whether you are trying to keep up the demands from somewhere else or making a case for giving accounts payable more responsibility, it is critical that the AP method works effectively. The idea of automation can bring multiple benefits to the business. When done right, AP automation saves your business money and makes the work easier without displacing valued staff.
Even when you are working with the automated accounts payable system, there is a chance it could benefit from an upgrade. Many AP teams are following old cumbersome methods to handle AP via ERPs that were not intended to have the needed functionality for accounts payable. A cloud-based accounts payable solution is easy to use, cost-effective, and can seamlessly integrate with the existing programs.
Make Your AP More Effective
It is good to state that accounts payable automation will save your business money and make the team easier to run. But what work does automation do?
Once you deploy the AP system, the solution allows you to auto-process up to 90% of invoices. The cutting-edge data capture systems allow the solution to log all the data on paper and digital invoices from the suppliers. You can receive a granular insight into each detail of the invoices and cut back on the need for manual data entry significantly.
The average business that moves from standard invoice processing to high levels of automation will find a 25% reduction in invoice errors. When compared to a company that processes invoices manually, completely automated AP teams can save an average of 15 dollars. Additionally, automation minimizes the average cycle time for an invoice to only 5.5 days. The invoices connected to POs can be matched and processed in less than twelve hours.
Understanding the Strategic Role of AP
The transformation that the accounts payable software brings has a profound effect on how the organization manages AP. Suddenly you can process invoices faster and with fewer errors. It lets you make strategic moves like extended payment terms with your suppliers and negotiating early payment discounts.
Plus, you are monitoring more data about the cash flow and purchasing, and the data is easier to sort and access. Only it needs a few keystrokes to search the files you are looking for. The solution can create custom reports based on your requirements. It provides you a rich resource for making accounts payable more strategic. For instance, you can examine spend closely for every category and supplier, providing you the details that you need to make more competitive purchasing bids.
The ability to customize automation to fit your business needs also provides you the chance to monitor and control spending closely. You can customize the solution’s tolerances in order to enforce the company’s policies automatically. And when accounts payable steps into the role of harmonizing spend flow and begin working with the procurement and purchasing teams, it opens up more possibilities for strategic cooperation.
The Inter-departmental Mutual Strategies
The other, often overlooked advantage to accounts payable automation is that the solution can interact with other automated systems across your organization. For instance, when you leverage robust accounts payable software to automate your AP and purchasing, the solution matches invoices with the purchase orders automatically.
When someone who is working with an invoice in accounts payable wants to check the related purchase order, all they require to do is click, and they will be taken to the purchasing program automatically. This is easier than if you are leveraging multiple unconnected programs to handle various financial procedures in the business.
Another advantage of automating your AP is that there are no additional charges for adding more users. You can grant solution access to as many staff as you want without checking an increase in cost. Rather, the pricing is based on the service you use every month. The AP solution easily scales to the business requirements, whether you experience a sudden growth or a slow month.