For generations, the accounts payable department was responsible for time-consuming manual tasks. Every month was a struggle as the team tried to gather essential data and close the books. Discover how AP automation solutions are used to improve basic operations and why technology has become a necessary corporate investment.
Wasted Time is Gone Forever
When the team wastes time on invoice management issues, this time is gone forever. Without automation, it can take hours to backtrack and get the facts required to process an invoice or correct an error. Struggling to gather data leads to frustration and distress. When employees are overworked and anxious, they tend to make mistakes. A vicious cycle of wasted time and effort is created, resulting in unnecessary costs to the organization.
Lost Control Due to Lack of Visibility
A lack of visibility leads to a loss of control over daily financial operations. AP automation solutions make economic data instantly accessible. From the C-suite to the AP team, everyone can review updates in real time. Cloud solutions make it possible for people to view financial updates from any device and location. Whether the CFO is attending a meeting out of state or an employee is working remotely, everyone is instantly on-board with daily updates. And nobody has to be on-site to approve invoices, which eliminates the ongoing paper chase associated with manual processing.
The System Tracks Workflow
Paper-based AP processes cause a lag in paying invoices. Information may sit on a person’s desk and could be overlooked or forgotten. Such delays could cause the late payment of invoices, and the company may incur penalties. Continued late payments can destroy relationships with essential vendors. The alternative is for the AP department to continually follow-up on every aspect of the invoice payment and approval process. AP automation solutions easily track these broken manual processes and workflows. Companies can pay invoice on-time or take advantage of early payment discounts created by improving relations with the vendors.
Be Aware of Current Cash Flow
AP data is used to determine how funds are spent and where improvements can be made. An example is using this data to more accurately forecast cash flow by foreseeing future invoice payments that are in process. As a result, the AP team becomes integral in the strategic process of finding ways to save money, making them key players in the company’s success.
Combat Fraud Externally and Internally
Unfortunately, fraud is a part of doing business. And incidents of fraud can cost a company quite a bit of money and time. The longer the fraud occurs, the more it costs the company. AP automation solutions provide audit reports that ensure key processes are in place. Inconsistencies are evident, such as multiple payments to the same vendor. By detecting these issues early, companies can address internal and external fraud before it becomes an expensive situation to figure out and resolve.
Set Realistic Targets
A digital AP process makes it simple to measure and monitor AP performance. Metrics for management to review include processing lead time, manual approval time, automatic distribution rate, and the touchless rate for order-based invoices. Knowing these metrics helps organizations establish realistic targets to achieve as well as explore areas that can be improved. Benchmarks are also available for organizations to determine where they stand in comparison to the competition.
AP automation solutions are changing the role of the AP department by streamlining operations and providing critical financial data in real-time. The implementation of automation has become a top priority for organizations across the country. Embracing digitalization is an effective way to save time, cut costs, and put human resources to better use.
