One of the most crucial and hard to optimize departments in a business is accounts payable (AP). Companies often overlook it because they do not know how to fully utilize its potential. But many companies are starting to realize its direct impact on the management of cash flow, not to mention vendor relationships and fraud security. However, whether the impact will be positive or negative depends solely on how the AP team does its work. By automating, you increase accuracy and remove errors from your accounts payable process.
Reasons to Automate Accounts Payable
From receipt to payment, there are many points across the life of an invoice that require the assistance of accounts payable. Manually handling these points can prolong the payment process. Thanks to many disruptive technologies, accounting teams can now eradicate unnecessary manual processes, thus increasing efficiency.
Need more reasons to automate your AP? Here are ten.
1. Increased Productivity and Efficiency
Haven’t we all heard the classic phrase “work smarter, not harder”? That is exactly what automated accounts payable software allows you to do. Gone are the days of performing repetitive, wasteful tasks. With automation helping non-core business activities, your team can focus more on the essentials.
Managing all your accounts payable information through a central software platform gives you better control and transparency. You can also evaluate your company’s performance instantly instead of having to wait for reports to arrive at end of day. That real time access makes it easy to access old information. You can digitize records that predate the automated system.
2. Fewer Mistakes
The primary problem with AP staff is that humans make mistakes. Thanks to the built-in functionality of AP software, the chances of errors are minimized. And software does not tire or lose motivation.
Since accounts payable software automatically collects incoming invoice information, its accuracy is high. Any electronic invoice received goes straight into the system. If you receive paper invoices, you can scan them directly into the system.
3. Better Strategic Decision Making
Making strategic decisions becomes easier as accurate, up-to-date data allows you to form a more realistic view of your company’s AP department. Updated AP systems usually come with tools to help you categorize the information you are searching for. This is a huge deal if you want to avoid an overload of information and quickly find data to help you with decision making. Making budgets becomes simpler since you get real data instead of having to proceed with guesswork.
4. Improved Cash Management
Automating accounts payable accelerates processing, saves money and provides accurate financial information. These features are important if you want to improve and grow your company since they help manage your accounts payable cash flow.
Automation enables cash flow management in several ways. You can see exactly where money was spent; calculate supplies and negotiate payment terms with suppliers; and never lose track of expenditures, making the prediction of cash flow simpler.
5. Operational Flexibility
Automated accounts payable systems are easily configured. All you need to do is set it up to automatically enforce all your company’s custom policies. Additionally, cloud-based accounts payable systems can be accessed anytime anywhere with the right password and permissions. Therefore, it’s easy to access your information and supervise payment approvals on the go.
6. Reduced Clutter
Processing invoices manually means printing them out. Filling out these records thus requires a lot of space and creates paper waste. When you automate your accounts payable, you reduce your need for paper; a good thing for the environment.
Digital records offer even more advantages over paper. Backing up huge amounts of data becomes easy and storage requires little space. Also, digital files have less risk of catching fire or being damaged by water.
7. Effortless Installation
Automating your accounts payable is also easy. All you need to do is sign up for the service and install a program. Downtime during the transition is short and these programs are easy to use.
8. Reduced Cost
Paper is pricey, and there are other significant costs associated with manually processing records, such as ink, file folders, binders, staplers, filing cabinets and paper clips. These outdated office supplies are a must to keep paper records safe, but digitizing minimizes costs.
9. Reduced Work Force
The advantage of automation is that most accounts payable software has optical character recognition. This converts any typed or handwritten text into something comprehensible to the computer, eliminating the need for manual keying and allowing you to maintain a more efficient, compact workforce.
10. Seamless Integration with Other Services
Perhaps you like using a variety of business platforms; for example, email, cloud storage or CRM. With the help of intelligent integrations, the automated system can do much more without you needing to switch back and forth between platforms.
Updating accounts payable makes your work a lot easier, but some companies hesitate doing it. However, in today’s business world, the advantages of digitization and automation cannot be overlooked. By automating your accounts payable, you will undoubtedly save time and resources to invest in your business’s core activities.