5 Benefits of Automating Your Accounts Payable Process

Although the global pandemic has impacted many parts of our way of life, including how we work, our business processes are not as flexible in most office settings, whether virtual, hybrid, or in-office. In particular, adapting accounts payable processes to the new normal has been a challenge for most organizations.

Invoice processing can be problematic, especially if you are still performing it manually. Invoices may get misplaced, approval requests overlooked, and vendors could be paid two times – or not at all. Streamlined invoice processing can strengthen a business’ finances and operations, especially in a remote work environment.

AP Challenges In the Modern Work Environment

From routing invoices and capturing data to resolving discrepancies and managing operations, AP processes have many moving parts, for the most part manual steps.

Some of the challenges AP departments may face include:

• Scanning invoices, then mistakenly placing them in the wrong digital folder or accidentally deleting them.
• Lack of efficient data entry leading to missed or lost paperwork, inaccurate information, and an increased time staff must spend on correcting mistakes.
• Difficulty collecting and processing hard copy invoices arriving daily by mail.
• The storage and security of confidential paper invoices on an employee’s home desk (that could very well be their dining room table).
• Manually uploading invoices into systems, causing extremely long processing times and late/missed payments.

According to Esker, the visibility of cash and working capital for companies is now more critical than ever. “Delays in access to that information have helped illuminate the flaws in their current AP processes as well as those in the rest of the cash conversion cycle.”

Accounts Payable Automation Benefits

The more smooth and efficient your accounts payable process is, the better you can do business. Workflow automation solutions enable accounts payable departments to streamline business operations, even when staff work on-the-go or remotely.

Here are five ways that automation solutions help streamline AP processes:

1) Touchless processing

Accounts payable workflow eliminates the paper process and manual data entry – allowing your AP staff to focus on more productive tasks.

Smart data extraction technology built into accounts payable workflow automation solutions extracts and validates data from paper and digital invoices. All invoices are captured and visible in the system within hours of receipt.

This visibility gives you complete control over your cash flow. Cash management becomes more efficient with reduced data entry errors and accelerated cycle times. Additionally, automated cash management allows you to take advantage of early-pay discounts offered by your suppliers and the opportunity to negotiate new discounts.

2) Real-time visibility

Optimized accounts payable solutions offer real-time insights into the metrics that financial leaders need to grow their organizations.

Real-time dashboards display the status of invoices and other critical information within hours of receipt. Current and historical invoice information can be accessed quickly and remotely. And, users can run ad hoc reports efficiently and export critical data for key stakeholders.

Machine learning capabilities in automated workflow solutions also enable the delivery of more accurate data over time. Extracted data from invoices are paired against information residing in a computing system. Then, the data is automatically routed digitally based on your pre-set workflows.

3) Reduced processing times and costs

One of the biggest hurdles in invoice processing and one of the most obvious impacts that an AP department has on a business’s operations is high costs.

According to a 2020 report by the Institute of Finance and Management (IOFM), the average expense for organizations working to process up to 100,000 invoices per year is about $6.10 when they process each invoice manually. For growing organizations that process 20,000 or fewer invoices, the cost is $15.97 per invoice.

Without a sophisticated and automated approach to AP processes, error rates are bound to rise, driving up costs. Each invoice adds up, which could very well cost tens of thousands of dollars (or more). Consider how much of a positive difference in cash flow your organization can record across an entire fiscal year by automating your AP workflow. High costs driven by rising error rates can seriously impact growth potential.

4) Reduced labor

Labor is a major component of a company’s operating expenses in multiple departments, including  supply chain, sales, and accounting.

Strategies to address labor efficiencies include optimizing workflows, implementing automation for improved productivity, shifting some operations offshore to capitalize on lower-cost labor, and possibly outsourcing non-strategic functions like accounts payable.

These techniques often provide savings of 20% to 30% even for large, “lean” companies.

5) Easy deployment and integration

Unlike on-premise AP systems, cloud-based automation software can be deployed without significant upfront capital costs that require ongoing IT support. A modern user interface allows remote users to get up and running with the software quickly, no matter where they are located.

The majority of cloud-based accounts payable solutions integrate seamlessly with various ERP and financial systems.

Overall, enterprises can deploy a cloud-based workflow automation system in a fraction of the time it takes to implement an on-premise solution.

Capture, Process, and Manage Invoices with Ease

When processes are automated and information is managed efficiently, it not only reduces operational waste, but it allows companies to do more with less.

VRC’s VitalScan solution includes digital mailroom and workflow automation services with business software integration that eliminates paper-heavy processes and brings efficiency to your workflow.

Do you need a way to capture, process, and manage invoices from your company? You can use our workflow automation service to improve your  bottom line. This can help you save up to 30%. Contact us for a free consultation today.