Things You Must Look for in Accounts Payable Automation Solutions
Today, businesses are simply tired of manual accounts payable processes and they want to do something about it. It is estimated that over the next two years, 85 percent of businesses will plan to minimize the number of paper invoices they get from vendors by 25 percent, per the Institute of Finance Management. A majority of businesses surveyed expect to eradicate paper invoices they are currently receiving.
Businesses identify that automating invoice approval processes distribute huge dividends when compared to those businesses that depend on manual processing. According to IOFM’s report of 2017, companies with highly automated operations spend 80 percent less to process each invoice, capture 45 percent more early payment discounts, report errors on purchase order-based invoices, and more. These are the reasons why automation is the top priority of AP leaders.
But numerous options to automate accounts payable can overwhelm the savviest financial leaders easily. In order to find a scalable and smart AP system that fits your business needs, here we present a few considerations while assessing accounts payable solutions.
1.Centralized and Secure Management
As accounts payable includes direct access to cash reserves, it is incredibly crucial to establish governance and controls. You need to search for solutions with role-based permission, which will help impose segregation of duties along with configurable business rules to initiate funding accounts, disbursement, creating reports, and more. Accounts payable software must provide customizable approval routing for invoices and payments, based on the transaction criteria. Also, the solution must have built-in vendor and user audit trails, extensive reporting, and storing documents for audit awareness.
Automating disbursements will help businesses to eliminate data entry across various bank portals, high bank fees, and inflated overhead expenses. Automated AP solution allows organizations to upload a single file for all vendor payments, despite the payment process, currency, or country. The accounts payable application later resolves the payments and remits them leveraging relevant format without any interaction needed by employees. This payment status and data for every payment process is automatically normalized and flawlessly uploaded to an ERP system. Vendors can select their preferred payment process and give banking details or information through the self-service portal.
3. Early Payments
The built-in old payment abilities in modern AP solutions make it simple to capture early payment discounts. The AP system alerts vendors of initial payment offers via a white-labeled vendor portal and email. When a vendor does not accept an offer the day it’s presented, new payment amount is calculated based on the number of days before the due date that vendor would be paid. Search for a solution that automates vendor opt-in and gives complete control over which vendors are offered early payments, when they are offered, and how much is eligible. An AP system must also support multiple payment options and have finance leaders to cover early payment balances.
4. Invoice Processing and PO Workflow
Handling physical papers leaves less time for value-added activities like spend analysis and working capital management. Advanced AP software provides a single platform which automates payments, approvals, and invoice capture. For achieving touchless invoice processing, you need to look for automated AP solutions that will eliminate data entry with OCR and adaptive learning, allow multiple invoices to get paid in a single workflow, and centralize invoice receipt through a vendor portal and email.
5. Self-service Vendor Onboarding
Automating vendor onboarding eliminates the need to clean emails for banking information, update vendor contact details manually, and send requests for tax forms. This self-service vendor portal in new accounts payable solutions automates the entire process of gathering vendor contact details, collecting and validating tax and banking information, assigning vendor ID, and avoiding duplicate vendor records in vendor master. A few vendor portals also allow vendors to select payment methods, payment thresholds, and currencies.
Accounts payable automation with these capabilities eliminates more than 85% of AP workload, freeing up the finance team’s time to focus on speeding up productivity and growth.