Accounts payable (AP) is a process that will require maximum time and effort on your team’s part. While the earlier software solutions, focused on invoice processing and settling bills, the benefits of AP automation tools lie in streamlining the entire process.
Are your suppliers getting paid on time? Also, are the right amounts being sent? What if your team clears duplicate invoices? Well, the list is endless as manual processes can get opaque. Once money is lost in the process, companies get into a frenzy and think of investing in solutions. But, not only is money wasted, but precious time is also spent in the entire process.
To keep up with your suppliers and vendors, it is a must to have a solid AP team backing you up. Unfortunately, manual processes taught to clerks and even your team cannot match up to transaction volumes in the present case- scenario.
Why Manual Accounts Payable is A Recipe for Disaster?
Piled-up paperwork, getting approvals from multiple parties, payment frauds, and security flaws are just a few perils of manual accounts payable process. Not only is precious time wasted, but you also lose out on client trust. While choosing the right accounts payable software is no easy feat, the benefits of AP automation go much beyond your imagination. A broader array of payment options, automated accounting entries, and seamless approval workflows are just the beginning.
Here are some benefits of AP automation that you must know about.
1. Increased Productivity
Accountants have not spent years studying to perform manual tasks. One of the main benefits of AP automation is boosting employee satisfaction and boosting turnover. With more time in hand to contribute to innovation and problem-solving initiatives, your team can use their skill set wisely. Invoice automation can reduce data entry by over 80%. Here are just a few tasks that can be automated.
- Payment scheduling and execution
- Categorizing transactions
- Purchase order creation and invoice matching
- Creating journal entries for all transactions
2. Minimizing Expenses
Automating your AP is the key to reducing operational tasks and errors. This will also let you save up to 65% costs in the long run. Still, some companies choose not to invest in software solutions. Thus, accounting teams lag in progress as their efforts don’t get good results. All this is due to poorly automated processes.
44% of finance professionals agree that their companies have lost time and money due to the same. AP automation will ensure smoother payment terms, reduce late fees, boost cash flow, and let you provide early payment discounts. Wait, the benefits don’t stop here-
- Software solutions can send automatic alerts in case of duplicate entries
- Digital storage leads to reduced printed costs
- Flag faulty payments and notify the concerned authorities
3. Simplified Scalability
The benefits of AP automation are not limited to productivity. Rather, the best systems grow with you. They can easily accommodate high transaction volumes, handle operational complexities, and manage suppliers with ease. Such systems don’t require complete overhauls and costly upgrades to function well with changing business requirements.
As you add in more clients you will need your best employees to focus on business development and strategic planning. Not only will AP automation let you automate manual and repetitive tasks, but it will also give insights into financial performance. This will help you relocate employees to projects and provide your customers with the best services.
When your employees are involved in revenue-generating operations, you can establish new cash flows. Besides, you can create customized workflows, address recurring challenges, set up alerts, and get reminders on payment schedules.
4. Bank on the Latest Trends
AP automation lets you analyze data in real-time, and identify trends, opportunities, and irregularities. With a clear view of expenses, revenue streams, and cash flow you will stay miles ahead of your competitors. Thus, letting you optimize business processes and allocate capital smartly.
Be it identifying areas for cost reduction, getting early payment discounts, or reallocation of resources for higher returns. Close to $300K per year can be saved by automating repetitive tasks per year. Gaining timely insights can accelerate workflows, boost liquidity, and reduce financial risks by significant margins. Besides, you can ensure that the capital you invest will yield good returns.
5. Seamless Integrations with Tech Stack
One of the best benefits of AP automation has to be improved interoperability with other automation solutions. Modern AP automation lets you integrate with ERPs, HR management systems, and card networks easily.
6. Reduce Invoice Processing Time
AP automation lets you keep your financial data in the same place. This way you can easily access and review data whenever required. Also, handling purchase orders, quotes, and receipts becomes simplified as your automation solution acts as the single source of truth.
Interdepartmental communications also get smooth as department heads can sign the invoices and thus expedite the whole process. Moreover, these solutions can identify errors and inform the concerned authorities. With employees now free of manual tasks, they can focus on productivity. Thus, boosting overall efficiency and bringing order to your operational cycle.
7. Improved Relations with Vendors
With higher data visibility you can easily recognize data patterns, generate reports, and make better decisions. Having the right data will help you improve customer services and vendor access points. With transparent communication and optimized workflows, your vendors can check invoice status and raise concerns if any.
8. Boost Security
Having enterprise-grade security and audit trails are some benefits of AP automation that you must know about. The process ensures that all the guidelines are adhered to and approvals are done as per the set procedures. This, in turn, ensures that invoices are legitimate. Besides, high-grade encryption ensures that companies can cut the risk of fraudulent transactions with zero hassles.
It is particularly useful for employees who work across different time zones and geographies. With a single-user interface for all purchases, companies can ensure compliance and consistency with ease.
AP automation tools offer multi-level access for employees. Moreover, building workflows with role-based access will let you identify duplicate and fraud invoices much sooner. Your accountants will be able to check for missing data in just a few clicks.
Furthermore, your company can set different compliance parameters to double-check if invoices are as per the organization’s rules and regulations. At the same time, it is also checked if the approved transactions fulfill government policies and legal requirements.
Last but not least, automated accounting solutions maintain a record of all actions that have been taken on the invoice. These include the edits, employee name, ID number, and the timestamps for the same. This data is crucial for building accountability in team members when it comes to error handling.
Wrapping Up
Now that you know all about the benefits of AP automation, it is time to select a tool that will ease out your life. Close to 75% or more tasks can be automated with well-equipped accounting software. Thus, we have built our solution- Serina. It knows the ins and outs of accounts to help you say goodbye to all your productivity issues. Here is how you will benefit from Serina.
- Access all invoice and payment details in real-time
- Keep your vendors happy with AP automation
- Manage multiple invoices with ease
- Reduce data validation efforts
With automated invoice processing, data interchange, real-time analysis, and superlative risk management abilities, you can leave all your financial management woes to Serina, and see the magic unfold!
FAQs
1. Is AP automation worth the hype?
Real-time access to financial data, informed decision-making, and faster working processes, are just a few benefits of AP automation. Small businesses to enterprises can derive manifolds from AP automation.
2. How does AP automation work?
Accounts payable is the process of minimizing human intervention and errors in the whole accounting process. This is achieved using accounts payable solutions that connect collaborators and streamline workflows.
3. Are there multiple types of accounts payable?
Accounts payable can be categorized into two parts: Expenses and Salaries. They also include invoices, checks, bills, and salaries. Salaries are paid to employees and expenses. Whereas, expenses are sent to suppliers and agencies.
4. What are the functions of accounts payable?
The accounts payable department is responsible for controlling and managing reimbursements, and petty cash, and keeping track of sales tax exemption endorsements.
