Managing accounts payable can be a tiresome process. Companies that use antiquated paper-based solutions often find that their work is less efficient and less accurate. Today’s companies are finding that AP Automation Software is a better choice for the modern workplace. These automated systems can help companies keep track of their money and products in one step.
Most companies have to keep track of invoices and accounts payable. Some companies are still using manual systems. Ideally, employees should be able to create invoices and keep track of accounts payable using an integrated software solution. This means that everyone in the company has access to a central invoicing system, ensuring that the incoming payments are properly tracked.
Poor invoice control can lead to losing money. Employees who have to spend time tracking down invoice information become frustrated and cannot effectively perform their jobs. Planning a paperless invoice system makes the most sense for everyone.
How Paperless Solutions Work
When used effectively, automated processing of invoices and accounts payable saves valuable time and money. Automated invoice processing involves the processes of:
- Price matching
- Managing purchase orders
- Transferring digital payments
- Data entry
- Streamlining workflows
Responsibility for invoice processing falls on accounts payable. In the traditional method, this system involves entering invoice data, assembling paper invoices, matching the purchase orders, and other time-consuming processes. This bloated process perpetuates inefficiency. Invoices are coming in from many different sources, including mail, fax, and email.
The accounts payable department needs automated solutions. Accounts payable departments will be able to streamline their outdated systems using artificial intelligence (AI) and machine learning.
Explaining Accounts Payable Automation
Digital invoices are the most important aspect of accounts payable automation. Technology is able to redefine the way businesses operate, including invoice management. If companies are interested in accelerating the accounts payable process, they can do so through automation.
Traditionally, the accounts payable process begins when a supplier sends an invoice. The invoice must be matched and approved, sometimes at more than one level.
After matching, the invoice must be entered into the system and posted for payment. Finally, payment is issued. If this system is done manually, it could take up to 15 steps. This means that many people are required to get the work of accounts payable done, and there is great potential for inefficiency.
When using automated invoicing, companies can process information in an agile fashion. When invoices arrive, they are scanned into the digital accounting system in a process called invoice capture. This means that hours of manual data entry are not necessary. The invoice software will then be able to convert the data to a searchable digital format.
Upon receipt, the invoice data can be extracted. This data can be mapped in the paperless system so that the software remembers which fields are necessary to process the invoice. The system can auto-capture fields like the supplier name, the purchase amount, and quantity. The system automatically routes the invoice to the proper department for approval.
The Benefits of Paperless Processing
Automated invoicing systems have many advantages. The primary advantage is a huge reduction in the time it takes for a company to go from procurement to payment.
When automated invoicing is put into use, the error rate greatly decreases. When employees are not entering the invoice information by hand, there are far fewer mistakes. Luckily, computers can handle all the important tasks like document comparison, redlining, blacklining, etc…
The approval process and processing times are improved. This can mean more efficiency for the business as a whole.
Labor costs are reduced, meaning that staff members are able to work on more critical tasks. This may result in the contraction of certain entry-level positions.
Duplicate invoices and payments can be reduced. It will be easier to compare records with the client, meaning that accounts payable staff will not have to spend time chasing down invoice data.
Stress levels in the office can be reduced as well. Internal staff will have an easier time performing their jobs, and vendors will also appreciate the accurate and detailed accounts payable system.
The cost of accounts payable processing will be cut. With paperless processing, the need for paper, envelopes, and stamps will be reduced.
It is easier for companies to meet early-payment discounts and to avoid paying late. This can be a serious problem when there are multiple accounts payable employees working on the same accounts.
AP Automation Solutions Work for Everyone
Every company that deals with invoices should consider an AP automation solution. The increased efficiency, cost savings, and time savings will free up employees in the accounts payable department to spend time on more important tasks. Errors will be reduced, and the likelihood of paying on time will increase.
When reducing the paperwork burden matters, your company should turn to automated AP systems. Moving forward into the new decade will be easier when you take advantage of the newest technology.