Managing invoices is one of the most important processes that a business performs on a day-to-day basis. However, given how critical invoice management is to a business’s fiscal health, why are so many organizations trusting this process to manual data entry and paper-based systems?
You have probably heard about automating your accounts payable workflow but may have wondered if it is even worth your time to explore. Businesses that have implemented AP automation are realizing impressive results including time savings, cost savings, and improved accuracy.
5 Reasons to Automate Accounts Payable
Some businesses are reluctant when it comes to automating accounts payable processes and this initiative often falls to the wayside when choosing which business processes to digitize. Many organizational leaders find themselves wondering if the legacy systems are working for the most part, why change?
Here are five reasons why your business needs to start automating accounts payable processes. If you are nodding your head as you go through, it’s time to start researching your options!
1. Working Capital Optimization
Companies that have a high payment volume typically expend an enormous amount of resources performing manual tasks such as printing checks and collecting approvals. Automating this process will allow companies that process over 100 invoices or payments per month to access faster forms of payment and cut processing times down significantly.
In today’s business climate, organizations cannot afford to squander opportunities to free up their working capital. Businesses need to take a more strategic approach to accounts payable, and that involves automating accounts payable processes.
Delayed payments, whether due to manual processes or convoluted approval systems, can erode supplier goodwill and lead to slower delivery times, less willingness to fix defects, and slower responses to queries. AP automation software allows your accounts payable team to select the appropriate timing in which to pay suppliers, freeing up working capital and allowing AP departments to take advantage of early-pay supplier discounts.
2. Faster and More Accurate Invoice Data Entry
Increasing headcount is often seen as a result of company growth but it also takes away from your bottom line profit. Before you send out that req or request headcount, consider how automation can improve the productivity of the team you have in place today. In a traditional accounts payable workflow, invoice data is manually entered before being routed for review and approvals. This manual invoice payment cycle often leads to data inaccuracy, lack of visibility, and delayed responses — often due to human error.
If your business is still accepting paper invoices, your accounts payable department is likely also struggling with late, duplicate, lost, and erroneous payments. With AP automation, businesses can automate invoice data entry with OCR (Optical Character Recognition) and ensure that only invoice exceptions ever need to be reviewed by your accounts payable team.
Automating your accounts payable workflow processes will eliminate previous back and forth on administrative tasks and streamline the electronic validation of invoices against contracts, goods received, and purchase order data.
3. Greater Time Efficiency
Finding the time to address critical business matters or contribute to strategic initiatives is a challenge when you are spending so much time on manual tasks. Without automation, it can take as long as two weeks to fully process an invoice. Reclaim that time by automating your accounts payable processes.
There are many stages in the lifecycle of an invoice wherein your AP department can cut time, costs and streamline productivity. For example:
- OCR will automatically index your scanned invoices and decrease the amount of manual data entry necessary for the department as a whole to complete.
- The centralized data filing system allows your AP department to find and access invoices easily, rather than searching through physical storage spaces and paper documents.
- Cloud-based storage and configurable business rules make it easier for AP managers to receive access to invoices more quickly for immediate approvals.
- Thanks to quicker individual invoice turnaround times, your AP department will avoid delays caused by end-of-month invoice bottlenecking.
Payments are sent when they are scheduled, approval workflows run themselves, and invoices are captured accurately all without any manual work. In addition, because invoice processing progresses more quickly, your staff will have more time to focus on analysis and offering valuable cash-flow insights to improve organizational efficiency.
4. Expanded Process Visibility
When you are a multi-entity business unit, you have invoices coming at you from multiple locations, payments that need to be made to suppliers operating in numerous locations, and it all needs to roll-up to the headquarters general ledger. How is your business keeping track of everything?
While it might appear that automation would obscure operations in invoice processing, we find that the opposite is true. Automating your accounts payable processes provides an increase in visibility by showing relevant data exclusively to authorized parties. Your AP department will know exactly when and where issues arise, and the data necessary to resolve them will be at your fingertips, no matter the physical location.
AP automation solutions that serve multi-entity businesses enable you to create a central location to submit invoices, automate payments, and track expenses for each location, all without manual intervention.
5. Compliance Monitoring and Increased Process Control
Accounts payable is a goldmine for fraudsters. Checkbooks or blank check stock are often left unprotected in a file drawer and checks are able to be drawn without any approvals. Adhering to compliance regulations and creating trackable audit trails are part of what makes accounts payable teams so crucial to a business’s success.
Without the correct systems in place to rigidly control processes and data, there are opportunities for details to slip through the cracks and for fraudulent activity to go by undetected. Automating accounts payable processes to limit users to authorized functions, while also ensuring that invalid invoices are flagged and reported, is essential.
Automation ensures that approval workflows are followed, that there is an audit trail from the invoice to payment, and that payments are not authorized by the same individual that initiated them. With an automated accounts payable process, you and your AP department can have peace of mind regarding the secure filing and protection of all your invoice processing information.
Are you ready to start automating your accounts payable processes? AP automation can bring your business greater working capital, more accurate data, time savings, enhanced visibility, and protection against payments fraud via increased controls.
With MineralTree, you can automate and streamline your entire AP process, from invoice capture to payment execution. Contact us today to see if MineralTree’s industry-leading automation solution is right for your business.