Invoicing is growing in both complexity and volume for many businesses (iPayables reports that 39 percent of AP professionals have seen their total invoices increase as much as 10 percent from 2016 to 2017). With automation technology emerging as a huge efficiency-driver for businesses, accounts payable (AP) departments are looking for it to transform their operations for the better. In manual processes, employees in accounts payable are weighed down by many touchpoints throughout the life of an invoice that can be handed off to automation tools. AP automation can let employees contribute to more high-level strategies such as cash flow optimization and fraud prevention.
Research shows that 82 percent of businesses fail because of cash flow mismanagement. AP automation streamlines the beginning-to-end processes involved in generating data about cash flow, so businesses have better insight and more granular visibility into their overall finances. Here are the top five reasons why you should automate accounts payable:
Remove Bottlenecks From Your AP Department
The Accounts Payable Network found that only 14 percent of paper invoices are input into the AP system on the same day as their arrival. That means those departments are either burdened by volume of work or bottlenecked by tasks preventing them from processing those same-day invoices. Whatever the workflow delay, AP automation sends many types of tasks to software to eliminate the need for human interference – thereby relieving your AP department.
Streamline Invoice Approval Process
Without automation, a human has to walk an invoice through a tedious, multi-day long process (in many instances), to collect approvals and follow up on outstanding ones. Should anyone request to see where an invoice is in its approval, that employee needs to dig through the workflow and locate the document. With accounts payable automation there’s no need for employee labor in the invoice approval/purchase order (PO) matching stage because invoices are automatically sent to the relevant person for approval. The software will also automate follow-ups to ping parties about deadlines. Employees will no longer have to match POs to their invoices to correct for mismatches manually.
Improve Data Entry Accuracy
Coding invoice data into your accounting system is vital if you want to get an accurate picture of your cash flow. Manually doing so introduces inevitable human error. It’s also one of the more tedious requirements of the AP department’s employees. AP automation software puts this crucial process into the hands of technology – giving your staff this time back and letting you rest easy knowing your invoices are properly coded at 99.5% accuracy (Your AP department will enjoy an extra hour a day, according to research).
See Better Relationships With Vendors
AP automation helps payment execution happen on time and with strong accuracy, too. In manual processes, invoices can get lost, causing you to delay vendor payments. Automated payments mean approved payments are scheduled and sent at the right time – improving your supplier relationships. You’ll also get a broader snapshot of those relationships, which contributes to better oversight of your financials and operation as a whole.
Drive Cash Flow Optimization for Future Growth
Every benefit of AP automation ultimately enables a business to gain more granular insight into their cash flow and financials to make smarter decisions. With employees less mentally taxed and your AP system in the hands of software, your business will save time and money and prevent loss by not having to go back and account for mistakes.
The APP2P Network says that invoice and AP automation pay for themselves within 6-18 months on average – making it a win-win considering the above benefits. Consider transitioning to this revolutionary technology if you want to get a better grasp on your cash flow, relieve burdened employees, and introduce more efficiencies across the board in your AP department.
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