Traditionally accounts payable has been managed through manual approaches or at best by using semi-manual approaches. With scale and overtime, these methods become quite time-consuming and tedious. Manual tools like spreadsheets are not apt to handle tasks like tracking, reporting, and monitoring. Also, they are not ideal to manage large data sets.
Enter accounts payable automation, a transformative approach that leverages technology to streamline financial workflows. Leveraging technology and robotic process automation, organizations can automate accounts payable processes.
Let’s take a look into the advantages of adopting account payable automation and how it can revolutionize the financial processes of an organization.
Enhanced Efficiency and Productivity
For starters, account payable automation reduces manual accounts payable processes, freeing up staff to focus on value-added tasks. Without automation, 84% of staff time is spent on transaction processing, leaving only 16% for high value add activities. With the time gained, staff can address invoice backlogs and engage in activities like contract compliance, managing budgets, mitigating compliance issues, rationalizing supplier spend, cash flow management, and budget forecasting.
Streamlining Invoicing Process
Automation of account payable processes, as shown in a study conducted by OnPay Solutions and PYMNTS.com in April 2020, resulted in a 60% reduction in missing invoices. Using the right software for invoice processing reduces costs, time, errors, and fraud risks. Automation enables automatic routing and reconciliation of invoices, performing matches, and optimizing workflow. Furthermore, automation software can seamlessly integrate with major enterprise resource planning (ERP) systems, streamlining the account payable process even further.
According to a study conducted by APP2P Network, implementing tools for accounts payable automation can result in a remarkable 85% reduction in monthly invoice processing costs. Additionally, late payment fees, duplicate payments, and incorrect data entry are common sources of financial losses. By leveraging accounts payable automation, organizations can effectively mitigate these risks by enforcing strict controls and ensuring adherence to predefined business rules.
Improved Vendor Relationships
According to the 2022 State of AP Report, timely payment was ranked first in importance by 84% of vendors, followed by payment accuracy at 67.2%. The relationship with your vendors is certain to suffer if your company relies on manual account payable processes. Efficient accounts payable operations play a crucial role in nurturing positive vendor relationships. By automating the payment process, businesses can ensure prompt and accurate payments, which can help enhance trust and loyalty with vendors.
Data Visibility and Reporting
Account payable automation revolutionizes your accounts payable processes by providing real-time tracking and a user-friendly dashboard for easy analysis. It allows you to measure and improve every aspect of your operations by tracking metrics such as payment processing costs, inquiry handling time, electronic invoice percentages, and average invoice processing time. By harnessing the power of spending through AP automation, you gain greater visibility, control, and strategic decision-making capabilities for your business.