Automation is reshaping the way companies manage their financial operations, especially in accounts payable (AP). Understanding how AP automation works and how it streamlines AP processes is vital to keeping your company ahead of the curve in a rapidly evolving business finance landscape.
AP efficiency is more important than ever given the growing need to do more with less. As budgets come under increasing scrutiny, AP automation solutions play a vital role in unlocking efficiency and keeping businesses agile and responsive. In this blog post, we’ll dive into the transformative world of AP technology to explore its role in modern financial operations and how it can help businesses save time and money.
What is Accounts Payable Technology and What is its Role?
AP technology encompasses a range of tools and solutions designed to streamline the management of an organization’s financial obligations to its vendors. In essence, AP technology enables businesses to efficiently handle the process of paying their bills and managing their outstanding liabilities. Without AP technology, manual processes can hinder efficiency and result in costly mistakes like inaccurate invoice capture.
Trends in Accounts Payable Technology
Several key trends in AP technology have emerged as organizations navigate the post-COVID-19 business landscape. Here’s a closer look at three trends from MineralTree’s 2023 State of AP Report:
The Pressure to Do More With Less
Budgets are under greater scrutiny, which means organizations are constantly under pressure to increase their operational efficiency. In fact, boosting productivity for lean AP teams is top of mind for 59% of finance leaders. This places increased importance on automation and digitization, especially in remote and hybrid work environments where it’s difficult for AP staff to physically collect invoices and complete other tasks in the AP process.
The Importance of Vendor Relationships
Two-thirds of finance leaders agree that their vendor relationships have grown in importance — and this shouldn’t come as a surprise. By fostering strong and transparent relationships with suppliers, AP teams can gain preferential treatment, improved pricing, and enhanced collaboration.
AP is the Number One Digitization Priority
Given recent economic headwinds, it makes sense that finance leaders ranked AP automation as their top priority for digitization. This trend underscores the growing recognition of the benefits of AP technology, including real-time dashboards that boost visibility into cash flow.
An Overview of AP Technology Solutions
You have several options to choose from when selecting an AP technology solution. These solutions can broadly be categorized into point solutions, enterprise resource planning (ERP) systems, and AP automation tools.
Technology Focused on Specific AP Tasks
Point solutions are designed to automate specific parts of the AP process. You can integrate point solutions into your existing systems to automate just some parts of your AP workflow, such as payments processing. However, these targeted solutions do not provide end-to-end automation. These point solutions can include, but are not limited to the following:
Manual invoice approval workflows can be time consuming to manage. Accounts payable teams often must follow up directly with decision makers and department heads to get signatures on invoices. It can also be difficult to gain insight into the status of an invoice when this process has not been digitized. For this reason, AP teams are most likely to automate this task, with nearly 71% of companies already doing so.
Manually inputting invoice data can introduce potential inaccuracies. However, many automated solutions that feature OCR technology still have only a 60% accuracy rating. When considering the right technology partner, AP teams should investigate solutions that combine OCR technology with human review for a fast turnaround and reliable information.
When new vendors get onboarded, it’s important to verify details to ensure these are correct. However, the right technology partner will also help AP teams better leverage vendor relationships to optimize the payment mix. For example: Solutions like MineralTree can determine which vendors offer virtual cards, so AP teams can take advantage of rebates.
ERPs are primarily designed for broader business management, so they often lack the specialized features needed to optimize AP processes. But by integrating dedicated AP automation tools like MineralTree with an ERP solution, you can enhance efficiency, reduce manual tasks, and minimize the risk of errors. This integration not only streamlines the AP workflow but also empowers your business to make informed decisions and maintain healthy vendor relationships.
Here are some examples of popular ERP solutions that can integrate with MineralTree’s AP automation solution:
Oracle NetSuite is a popular cloud-based ERP that can seamlessly integrate with MineralTree TotalAP. This two-way integration streamlines invoice processing, expense management, and vendor communication.
Sage Intacct is a powerful financial management solution that can integrate directly with AP automation solutions like MineralTree. Its user-friendly interface and scalability make it an ideal choice if your business is looking to expand.
By integrating QuickBooks with MineralTree, you can automate the entire AP process, increasing visibility into vendor payments and improving invoice capture and approval workflows.
Microsoft Dynamics GP
Microsoft Dynamics GP is a comprehensive solution that caters to the needs of mid-sized and large organizations. When integrated with MineralTree’s AP automation solution using a native API-based connector, Microsoft Dynamics GP can significantly boost visibility for finance teams, reduce payment processing costs, and enable end-to-end automation.
Oracle E-Business Suite (EBS)’s MineralTree integration empowers companies to drive efficiency across business units. It’s a good choice for organizations processing over 10,000 invoices monthly that are aiming to secure discounts and maximize their ROI.
Oracle ERP Cloud
Oracle ERP Cloud is a cloud-based solution designed for large enterprises. This platform harnesses the power of built-in machine learning for predictive planning and forecasting, driving efficiency across your business. Integration with MineralTree can provide comprehensive end-to-end automation capabilities for AP, supporting rapid process optimization, cost reduction, and accelerated innovation.
JD Edwards EnterpriseOne
JD Edwards EnterpriseOne is an ERP solution that helps users better manage their AP workflow by negotiating better vendor contracts and handling multi-currency needs. This system is a great option for organizations that process over 10,000 monthly invoices. Users can opt for direct or indirect API integration with MineralTree depending on the organization’s needs and security requirements.
AP Automation Tools
AP automation tools offer comprehensive automation solutions for the entire AP process. Solutions like MineralTree are designed to handle everything from invoice capture to payment processing. These tools typically come with advanced features like intelligent data extraction, workflow management, and integration with other financial systems.
Why Should Companies Automate AP?
AP automation can significantly impact your organization’s financial health, operational efficiency, and ability to scale effectively. Let’s explore two key benefits of AP automation.
Save Time and Improve Efficiency
Improving productivity across the finance department has been a key challenge for CFOs due to economic uncertainty and inflation. Automating AP processes reduces the time and effort required to manage invoices, expenses, and payments. This efficiency not only saves time for your AP team but also reduces the likelihood of errors that can lead to costly mistakes. And by expediting the entire AP process, your team can ensure prompt payments to vendors that support these crucial relationships.
As your business grows, so does your volume of financial transactions. The good news is that AP automation solutions can scale with your organization. As you invite new vendors and increased transactions to your operations, the right AP automation technology ensures you can handle an increasing workload without a significant increase in manual effort. Additionally, solutions like MineralTree eliminate the costs associated with multiple seats, making it easy for the AP team to collaborate.
The world of AP automation technology is evolving rapidly. Embracing AP automation solutions is critical to stay competitive and manage your finances more effectively.
Interested in learning more? Request a demo of MineralTree to explore how we can help your business streamline your AP processes for more efficient operations.
Frequently Asked Questions
What is Accounts Payable Software?
Accounts payable software refers to technology solutions designed to streamline and automate the processes involved in managing a company’s outstanding financial obligations to vendors. These software solutions help organizations process invoices, make payments, and maintain vendor relationships more efficiently.
What is Accounts Payable Automation Software?
Accounts payable automation software is a specialized type of software designed to automate the entire AP process, from invoice capture to payment processing. It aims to reduce manual effort, minimize errors, and more efficiently manage a company’s financial obligations.
What is the Latest Technology Trend in Accounting?
Digital transformation is the latest technology trend in accounting. This involves the integration of advanced technology solutions like AI, machine learning, and data analytics to digitize and automate various accounting processes, including AP.
What are Best Practices for Automating Accounts Payable?
Best practices for automating AP include choosing the right technology solution that aligns with your business needs, optimizing workflow processes, ensuring data accuracy, and maintaining strong vendor relationships. A comprehensive AP automation strategy should also include regular performance monitoring and continuous improvement efforts.