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Here’s What Your Accounts Payable Process Looks Like with Automation

your ap process automated

Optimal cash flow, minimal manual intervention.

The age of disruptive accounts payable technology is upon us. If your frontline accounting staff, department managers, and CFO are all spending time manually processing invoice approvals and payments, they’re being diverted from more important and meaningful work. And the worst part is, it’s wholly unnecessary.

The negative impact of outdated AP doesn’t stop with your own personnel though, as these inefficiencies are also likely keeping your vendors in the dark on overdue payments. This puts your entire company at risk of receiving a diminished level of service from vendors, and as a result, delivering a diminished level of service to customers.

Here’s a look at what your accounts payable process would look like if you were leveraging cutting edge technology that is now available to automate it with MineralTree:

old and new ap

1. Effortlessly accurate invoice data capture and coding

While this step is typically the most time consuming part of an AP employee’s day, automation technology can accelerate the process by 3x. Physical invoices are electronically recorded at 99.5% accuracy by leveraging a combination of Optical Character Recognition technology and human review. Invoices can be uploaded directly into your ERP through an API-level integration with your AP automation solution. This type of integration can facilitate a bi-directional sync that transfers data back and forth like this continuously.

Automating this step eliminates many errors resulting from the monotony of manual data entry, and prevents the cost of time resources for remediating those errors downstream from ballooning up to 10x the cost of catching them initially.

2. Centralized approval routing

From there, the invoices can be routed directly to the appropriate person for approval based on pre-set routing rules. These rules can be set based on criteria like vendor name, and you can also set dollar amount thresholds that trigger a requirement for two tiers of approval.

3. Segregation of duties

Automated accounts payable processes build the critical payment control of segregation of duties into the process of paying every single invoice by separating duties in the AP process. With 78% of businesses impacted by payments fraud last year, this basic set of checks and balances is becoming more critical than ever. An AP Manager can oversee the data capture and routing, but a second second person should always review and approve invoices before they are paid.

With AP Automation, this second (and sometimes third) set of eyes can be built into the approval process for every invoice. Leading solutions have separate views for approvers, that are protected by not only passwords, but also two-factor authentication in some cases.

4. Single-tap invoice approvals

Rather than managing each approval on a separate email thread, automation centralizes all outstanding approvals into one view for you, and for each department head. Within this view, invoices can be approved with a single finger tap, with more details available in cases where further inspection is needed.

This setup simplifies life for both you and your department heads, making it easier to stay on top of all required approvals, and more challenging for unpaid invoices to slip through the cracks.

5. Easy access to electronic payments

With automation, every vendor gets paid with the method that is most advantageous to you. Do you qualify for an early-pay discount? After a streamlined approval process, an ACH transfer can easily be delivered on time. Does your commercial card program offer a cash-back rebate? It will be just as easy to pay by card.

While there are clear benefits to transitioning your vendor payments to electronic payments, leading solutions offer to facilitate check payments on your behalf as well. Regardless of which payment method you choose for each vendor, whether it be check, ACH, credit card, or wire, setting up payments is just a matter of clicks with automation.

6. Single-tap payment authorization

Once payments are set up in MineralTree, your controller, CFO, or payment authorizer is automatically notified. From there, they can authorize the payment with a single tap and send it on its way to your vendor. If they want to review a vendor’s payment history, they can easily do so with all of that information readily available within the payment approver view. After payment, all remittance details are delivered automatically as well.

What Your Company Looks Like with AP Automation

By automating accounts payable, the process of paying vendors shifts dramatically from a source of stress and a strain on resources to a strategic advantage to your entire company. Establishing a more proactive approach to AP can have a profound effect across your business in these three areas:

Improved Vendor Service

The way you pay your vendors can make a tremendous difference in the level of service that they provide to you, and ultimately the level of service you provide to your customers.  Thinking strategically about how you process and pay invoices can help you establish build a maintain strong relationships with vendors that help move your business forward.

Automation unlocks the time for you to establish this strategic approach. While manually processing and paying invoices can keep you busy just trying to get the bills paid on time, automating will give you the capacity to ensure every invoice is paid on time and with the most advantageous payment method.

Optimized Cash Flow

Automating gives you greater command over when you pay your vendors. This enables you to create a longer average payable period to increase the amount of cash the company has on hand for operations and capital expenditures, allowing your company to maximize the use of its trade credit by using every dollar in its cash flow as much as possible.

Not only can the accounts payable team maximize capital usage, but it also has a unique opportunity to increase capital. Using corporate credit cards to pay vendor invoices can provide a significant, steady stream of income. Most credit cards have cash-back rebates of at least 0.5%. While that may seem trivial, an additional $5,000 in capital per $1 million in operating expenses can improve the performance of an organization. Automation simplifies the process of paying by card as well.

Simplified Company Audits

Audits are a necessary evil for every company. How the audit experience goes for companies has a lot to do with how the accounts payable team records and maintains their vendor invoice data over the course of a year.

The easier it is to quickly locate required documentation, the less disrupted your company’s employees will be from focusing on their core responsibilities during an audit. If documentation is missing, misplaced or inaccurate, employees will get pulled away from their tasks that help the company perform more efficiently in order to locate or produce the document or correct the error.  Automation preserves audit trails in a central repository for quick access at any point in the future, making audits a breeze.

In each of these areas, an accounts payable team can easily slip into reactivity. After a vendor relationship deteriorates, then they will step in and fix it. If cash flow dries up, then they find a way to expand the average payable period. If an audit occurs, then they work to retroactively clean up the paperwork and get organized. This method of operating accounts payable can hold a company back. The simplest way to take a proactive approach to accounts payable is to automate the end-to-end process.

Are you curious to see AP Automation in action? Contact MineralTree for a personalized demo.


Scott Siegler
Scott is the editor of MineralTree's Invoice-to-Blog, and also a co-curator of The Proper Payable, a weekly email newsletter covering the best (and worst) in financial strategy.


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