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Streamlining Your Accounts Payable Process: The Power of Automation
Optimise your accounts payable process with automation. Boost productivity, reduce manual tasks and experience seamless financial operations.
Managing accounts payable is a critical function for businesses of all sizes. It involves handling a company's outstanding obligations to creditors or suppliers for goods or services received but not yet paid, commonly known as accounts payable (AP). These payables appear as current liabilities on the balance sheet. However, this crucial aspect of financial management often presents significant challenges, ranging from timely payment processing to maintaining accurate records and fostering strong vendor relationships. Additionally, given the susceptibility of accounts payable to business fraud, it becomes even more essential to establish robust controls and implement diligent monitoring to safeguard company resources.
Understanding Accounts Payable Automation
The traditional manual approach to processing invoices and executing payments is time-consuming, error-prone and can hinder operational efficiency.
According to a report by IOFM, it costs over $18 to manually process a single invoice, while it only costs less than $5 with an automated system. Aside from additional costs, manual processing takes an average of 14 days, meaning suppliers and vendors must wait nearly three weeks to receive payment. This strains the relationship between the organisation and its suppliers, and can also result in purchase discounts lost which is a forfeiture of the suppliers’ offered discount for early payment.
Aside from delayed payments, businesses also struggle with duplicate entries and data inaccuracies, leading to missed opportunities and potential financial risks. However, in an era driven by technological advancements, there is a solution at hand: accounts payable automation.
Accounts payable automation refers to using technology and software solutions to streamline and optimise the accounts payable process. It involves automating various tasks and workflows, such as data entry, invoice matching, approval routing and payment processing through advanced software systems. Businesses can enjoy a wide range of benefits by implementing accounts payable automation.
5 Reasons Why You Should Automate Accounts Payable
1. Improved efficiency
Accounts payable automation streamlines and optimises the entire process, eliminating manual tasks and reducing the time required for invoice processing and approval.
Businesses can significantly expedite their accounts payable workflows by automating data entry, invoice matching and payment processing. This increased efficiency allows for faster turnaround times, accelerated cash flow and improved operational effectiveness.
2. Increased employee productivity
Businesses can unlock significant time saving and efficiency gains by automating their processes and streamlining repetitive, time-consuming tasks.
This frees up valuable time that can be redirected towards more strategic and value-added activities, such as analysing financial data and implementing process improvements. This enhances individual employee performance and empowers them to contribute their skills and expertise to areas that directly impact the business's growth and success.
3. Time and cost savings
By eliminating manual processes and reducing the potential for errors and delays, companies can streamline their operations, leading to faster invoice processing and payment cycles.
Additionally, automation reduces administrative costs associated with manual data entry, document handling and paper-based processes. The time and cost savings translate into improved financial performance and more efficient use of resources.
4. Enhanced accuracy and compliance
Manual accounts payable processes are prone to errors and vulnerable to fraudulent activities. As such, accounts payable automation plays a crucial role in mitigating these risks and ensuring compliance.
Advanced accounts payable software systems employ built-in controls and validation mechanisms to detect potentially fraudulent activities, such as duplicate invoices or unauthorised changes. Through process automation, businesses can establish robust controls and implement diligent monitoring to safeguard against fraud, which protects company resources and maintains a high level of financial integrity and compliance.
5. Strengthened vendor relations
Through automation, businesses can improve communication and provide timely payments to their vendors. Vendors appreciate the reliability and efficiency of automated payment processes, which can lead to enhanced trust, improved partnerships and potential discounts.
By streamlining the accounts payable process, businesses can cultivate stronger vendor relationships and create a positive impact on their overall supply chain management.
ProSpend's Hyperautomated Accounts Payable
In today's fast-paced business world, optimising financial processes is crucial for efficiency. ProSpend offers a game-changing solution with our hyperautomated accounts payable platform.
We streamline every step of the accounts payable process by leveraging advanced automation, intelligent workflows and robust analytics. Additionally, our Human-In-The-Loop (HITL) machine learning ensures accurate data capture during scanning. This innovative approach eliminates the need for manual data entry and improves accuracy rates.
One of our valued clients, Breakthrough Accounting, experienced firsthand how ProSpend transformed its accounts payable process through account automation. They overcame manual invoice processing challenges and achieved remarkable results. Invoice processing time reduced by 75%, improving cash flow and enabling faster payments. Data entry accuracy soared, minimising errors and eliminating manual corrections.
HITL-Powered AP Management: Main Features
Aside from HITL, our accounts payable solution has the following features that help you streamline your process:
- Invoice delivery options. ProSpend provides flexible options for invoice delivery, allowing businesses to receive invoices electronically, via email or through integrations with other systems, ensuring seamless invoice handling.
- Auto-coding and verification. Invoices are automatically coded based on predefined rules, reducing manual effort and improving accuracy. The system also performs verification checks to ensure coding accuracy and compliance.
- Duplicate invoice check. Our robust invoice check feature identifies and flags potential duplicates, preventing overpayment and eliminating the risk of duplicate processing.
- Quick split allocations. ProSpend simplifies the allocation process by offering quick split options, allowing users to efficiently allocate invoice amounts across multiple entities and cost centres with just a few clicks.
- Global options. Our accounts payable solution offers multi-currency capabilities, ensuring accurate currency conversions and compliance with international financial requirements.
- Configure approvals. Approvers receive fully coded invoices and can approve them on the go. Additionally, approval workflows can be designed based on multiple dimensions, such as country level, division, cost centre, supplier and more. Workflows are flexible and can be changed based on your business’s needs.
- Payment protection. Our accounts payable solution uses OCR and AI technology to scan every invoice, and the data extracted initiates a rigorous multi-check process. Any error or anomaly is immediately identified, which protects your business from fraud and payment mistakes.
Drive Efficiency with Accounts Payable Automation
As businesses strive for operational excellence and efficiency, automating the accounts payable process emerges as a key solution to overcome the challenges of manual workflows. The advantages are clear, from improved efficiency and increased productivity to cost savings, enhanced accuracy and stronger vendor relationships.
Accounts payable automation empowers businesses to gain better control over their payables. By embracing this digital transformation, businesses position themselves for success in a rapidly evolving business landscape, driving growth and achieving sustainable success.
Ready to simplify your accounts payable?
Get in touch with our experts and schedule a demo to explore how ProSpend can streamline your processes and drive growth.