Accounts payable automation or AP automation reduces the manual tasks associated with accounts payable. Automation technology creates a digital workflow for routine steps like receiving invoices and routing them for approval, payment and reconciliation. The process starts by capturing invoices electronically. Yooz compares invoice details with open purchase orders. Any discrepancies are flagged for review, and matched invoices are automatically routed for approval or scheduled for payment.
Why Every Business Should Invest In Accounts Payable Automation
Every business should prioritize investing in AP automation. Automation saves time by removing unnecessary manual tasks and making the core processes more efficient. A well-configured software also reduces errors and provides meaningful insights. Beyond these time and cost-saving measures, AP automation software can also be used to detect, flag and prevent potential fraud from overstated or duplicated invoices.
This set of benefits lays the foundation for an effective business, creates more opportunities to scale up operations, and improves the bottom line in the long run.
Getting The Most Out Of Accounts Payable Automation
Financial controllers and accountants should follow some key procedures to get the full benefits of AP automation software. These practices guide the most effective techniques to maximize the ROI on accounts payable software:
All Hands On Deck – All staff members should be on board to ensure your AP software translates into the benefits we have identified. Financial heads should engage their team members and inform them of the benefits of AP automation. They should take feedback from exhaustive discussions and apply it to vendors’ proposals.
Selecting A Project Leader – Capable people should be assigned to oversee and implement AP software. The project head is responsible for monitoring and troubleshooting the software. Project leaders are also in charge of training their colleagues on industry best practices in automation processes.
Multi-Stage Implementation – There is often a large amount of data that can be immediately automated. It is advisable to automate in stages and monitor between stages. There is a learning curve associated with rolling out a new software; thus, the process should be managed gradually.
Integrate Existing Systems – Your AP automation software should integrate into the existing infrastructure. There should be no data duplication in more than one system as this cancels out the benefits of automation. The AP software should communicate with the existing database through ERPs and other business programs.
Create Work Structures – Workflows in AP automation software give a real-time snapshot of the supply chain. You can monitor the movement of orders and identify areas where you can reduce turnaround times.
Set Up Actionable KPIs – The AP automation software gives financial controllers access to new and valuable insights. You can use this data to monitor key indicators such as free cash flow, cash tied up in inventory and balances on outstanding accounts.
Selecting The Right AP Software
Include these steps as you choose an accounts payable automation system:
Pre-plan – Set up a team to determine the company’s most pressing needs.
Collect and rank your requirements – Document how the existing software works and highlight the areas that can benefit from automation. This creates the blueprint of requirements to formulate the features of the software.
Vendor Engagement – Speak to potential vendors and software providers and factor in scale, price and ease of use.
Vendor Selection- Pick the vendor that can deliver in the most practical way in terms of cost and post-purchase support.
By reducing manual processes and delivering payments on time, AP automation helps a business improve relationships with suppliers and partners. It boosts productivity, reduces days sales outstanding, and saves money, which increases profitability and growth.