Don’t settle for less when investing in accounts payable automation.
The market for accounts payable (AP) automation is still very young, and the term AP Automation is still very vaguely defined. For this reason, businesses considering investing in a solution should be fully aware of what the market-leading solutions have to offer.
Disruptive, cutting-edge technology continues to create new efficiencies that can make life easier for finance teams that are trying to keep up with accounts payable duties. The clear and immediate value created by these efficiencies offsets costs with expedience, and furthermore makes the technology accessible to every business processing 50 or more invoices in a given month. If you’re looking for an optimal ROI, here are four things that your AP Automation solution should be able to do:
1. Automatic Payment Scheduling
The traditional approach to tracking payment deadlines, as well as early-pay discount deadlines, has involved managing complex libraries of Microsoft Excel spreadsheets. This system has historically yielded nearly 50% of invoices being paid past their due date, and has consistently left companies at risk of jeopardizing their relationships with critical suppliers.
Those AP Managers who have been diligent enough manage one of these types of libraries on a daily basis to ensure everything is up to date have quickly realized how complex and time-consuming of an endeavor this is. And the sad news is that no matter how hard a team works to keep this information up to date, it is still easy for invoice payments to fall through the cracks due to the sheer volume that teams are forced to track.
Automatic Payment Scheduling is a feature of advanced AP Automation solutions that takes the burden of manually tracking payment deadlines and discount requirements off the shoulders of AP staff with “set-it-and-forget-it” functionality. As invoices are imported and automatically captured into the solution database, they can be scheduled for payment at their due date. From there, they are routed for approval, and AP managers can rest assured that their vendors will be paid on time. Discounts can also be automatically reflected and applied to payments within AP Automation solutions.
2. Duplicate Invoice Detection
AP professionals know that paying the same invoice twice is among the costliest of mistakes they can make. As the 1-10-100 quality management rule indicates, the costs of remediating errors can tower over the costs of preventing them.
When it comes to processing and paying duplicate invoices, the costs include:
- Time wasted making spurious payments
- Time spent having awkward conversations with suppliers to recover funds
- Time spent dealing with unexpected cash flow issues
Additionally, an unrealized cost can include the dollar values of undetected duplicate payments to don’t get reconciled.
Automated Duplicate Invoice Detection is a feature that can save precious time during the process of getting invoices approved by completely eliminating the possibility of paying the same invoice twice. It works by flagging an invoice with data that matches an invoice that already exists in the system, and prevents an AP manager from moving forward with processing it until it is either rejected or adjusted.
3. Automated Purchase Order (PO) Matching
Purchase Orders provide businesses with a critical control when purchasing goods and services from suppliers, and an opportunity to bypass the process of getting invoices approved by department heads. Rather than collecting everyone’s “stamp of approval” for every invoice that is received, AP teams can verify the validity of an invoice by simply comparing the invoice to the PO that has been previously delivered.
However, for the AP department, matching incoming invoices against existing POs can be a time-consuming, tedious, and error-prone task. For that reason, AP solutions now employ Automated PO Matching through advanced algorithms and AI techniques that automatically compare invoices with their corresponding POs. This feature is a boon for overworked AP departments seeking to follow-through on the controls promised by the introduction of POs.
4. Virtual Card Payments
Virtual card technology is raising the bar for what it means to securely process payments, and AP teams would be wise to make it a part of the AP Automation solution in which they invest.
Virtual cards are randomly-generated credit card credentials that are delivered for payment on behalf of your static credit card data. These credentials are generated through a process called tokenization, and can only be charged one time for one amount. Additionally, virtual card payments can be set up to expire if they aren’t charged within a designated time window.
Popular credit card issuers like Mastercard, Visa, and American Express offer virtual card pay platforms that are built into lead AP Automation platforms, and can be easily selected as a payment method while queuing up vendor payments.
The Best Path to AP Automation
There are a wide variety of ways that AP Automation is currently defined and many solutions available from which you can choose. When deciding which solution is right for you, it’s important to understand that taking a holistic approach to automating accounts payable and investing in a solution that streamlines the end-to-end process will deliver greater efficiency, improved control over cash flow, and enhanced protection against fraud.
MineralTree is leading the AP Automation paradigm shift by providing the most comprehensive approach to automating your accounts payable process. With marketing-leading features, a simple implementation process, and praise-worthy customer support, MineralTree continues to redefine what is possible in the realm of AP efficiency.