Every business relies on suppliers to acquire products, perform various tasks, and supply them with what they need to continue their operations. Those suppliers don’t work for free and expect timely, well-organized payments from companies. It’s all part of day-to-day business. Accounts payable exists to ensure suppliers get paid and that a company’s cash flow gets correctly verified/reconciled every day. Unfortunately, typical AP processes can be challenging. Whether it’s not getting your invoices submitted promptly or an abundance of human error messing with your cash flow, any lingering should address problems with the AP process quickly. Fortunately, AP automation is on the cutting edge of doing just that, with various useful features. Here are just a few ways automating your accounts payable processes can help your business:
1. Speedy Invoice Processing
If you were to take a quick look at your existing AP processes, the odds are you’re probably dealing with mounds of paperwork, loss of potential discounts through slow approval, and myriad other problems. The unfortunate truth of the matter is manual invoice approval is a flawed process. So, what can you do about it? The short answer is automation. Automation often significantly reduces the time it takes to approve an invoice by allowing users to set tolerance levels to flag which invoices need to be reviewed. Reviewers have the power to approve invoices from their own mobile devices, effectively eliminating excessive manual reviews. Faster invoices mean quicker payments to suppliers, which in turn can help your company take advantage of early payment discounts and reduce lost documents.
2. Grow Your Business And Monitor Spend
So, you may be asking yourself, “how does automating my AP processes help me grow my business?” The answer is simple. As you already know, automation improves the overall efficiency of processing invoices. Automation enables teams to collaborate faster and easier as well. But those aren’t the only ways automation helps your business grow. By eliminating extra work and expenses associated with check/invoice printing in addition to increasing employee productivity, your company can redistribute its resources into other areas. As your business grows, it helps you cut down on waste, prevent fraud, and make swift business decisions based on accumulated data. If you prioritize AP automation and do it right, you can potentially optimize your business cash flow and monitor spend with ease.
3. Improved Transparency
Transparency is vital in any operation, but doubly so when it comes to financials and industry compliance. Keeping track of costs/expenses is an essential part of spend visibility and spend risk. By using enhanced AP Automation software, you can gain complete visibility and transparency in what’s happening within your AP processes, setting your company on the path to extensive spend visibility at the same time. It’s also helpful in knowing where your invoices are at every step of the validation process. Since invoice reporting and processing are such critical functions of any business, knowing what’s going on with them at all times is key to success. Robust anti-fraud measures help you detect potential issues in real-time. In contrast, AP automation helps your managers keep a close eye on such things while dramatically simplifying the auditing process down the line.
4. Reduced Labor Costs
Accounts Payable teams have a significant workload most of the time. With the constant flux of invoices moving in and out of a typical company’s workflow, it can become overwhelming at times. Fortunately, automation rescues your team from stacks of paperwork (and the associated paper cuts!). Not only is the workload sometimes untenable, but it can also be costly. Manual invoice processing can cost around $15 per invoice. Automation, however, reduces the cost to $5 or less per invoice. That’s nearly an 83% reduction in price! There’s less data entry involved (which cuts back on employee labor), no risk of losing/misplacing paperwork, and no need to store/mail/file physical paperwork. Because automation cross-references and double-checks whether an invoice has been paid or not, your company can also avoid accidental overpayments, late invoices, or duplicate payments. A built-in calendar isn’t the only benefit of automation, either; you can streamline the process even further through batch processing and set up your system to allow for multi-level validation for your invoices.
5. Long-Term Savings
One of the best aspects of AP automation is the long-term savings it can provide. Most of the time, savings arrive as early payment discounts (EPD). An EPD is a win-win situation for both the company and the supplier. In some instances, companies can work with their suppliers to set up conditions to receive a discount. It could be on all invoices or specific transactions. Once everything is set up in the system, suppliers can set EPD preferences that you can use to your advantage to maximize your savings. By paying invoices earlier and sending payments to your most valuable suppliers, you can improve relationships and set yourself up for extensive savings well into the future.