Many businesses are only now beginning to understand the critical role accounts payable (AP) plays in daily operations. We all know that this job function is what keeps the office lights on, but it also directly affects cash flow management, fraud prevention, and the strategic supplier relationships for the company. However, there are numerous touchpoints that still require manual processing for AP, including purchase orders, supplier invoices, approvals, and accounting, which entails lengthy wait times for invoice processing and may result in disgruntled suppliers.
What is Accounts Payable (AP) automation?
Accounts payable automation, also known as AP automation, refers to the use of a digital system to minimise manual and repetitive tasks like data entry and check writing. As a result, companies can digitally submit invoices, manage approvals, and complete payments thanks to automation technology.
Top manual tasks that can be automated
1. Data Entry
There is no longer a time cost associated with entering all of the invoice data into your accounting system thanks to automation of the invoice data entry process. Now your team will have more business hours to perform other major tasks.
2. Matching and Approvals
Human intervention at this stage of the process is not required if the invoice approval and PO matching processes are automated. It is possible to route invoices to the proper approvers automatically, with follow-up messages that inform them of deadlines. Similar to automatic invoice matching, automated PO matching uses algorithms to quickly compare invoices to their corresponding POs, flagging mismatches for additional review.
3. Payment
Approved payments can be scheduled and automatically sent out on the due date by automating payment execution. AP Automation also provides a centralised workflow for executing payments of all types, making it easier to pay electronically and lowering the costs and risks associated with each payment.
Why businesses should use AP Automation?
Contrary to the popular belief of automation replacing humans, automation tools are used in accounting to add value by relieving teams of time-consuming, unproductive tasks.
1. Save time and eliminate errors
AP is more prone to errors due to the overwhelming volume of invoices. It's possible for the same invoice to be paid twice if a supplier sends an initial invoice via mail and a follow-up via email. Errors can raise operating costs, affect cash flow and vendor relationships.
The entire process can take more than 8 days without automation. Spending too much time on manual tasks and mistakes makes it difficult to find the time to address key business issues and strategic initiatives. With an AP automation system, no one in your organisation will ever have to waste another second looking for an invoice or determining whether it has been approved.
2. Reduce costs
Automation lowers labour costs by cutting data entry by 83%, speeding up other operations like payments and invoice matching, and reducing hard costs like document storage and postage. Additionally, it lessens the chance of paying bills twice, late or mistakenly paying too much.
3. Visibility
Automation provides visibility from the beginning to the end of the process, through the immediate digitisation of invoices and the inclusion of managed workflows. It is clearer and easier for Managers, Approvers, and Key Accounts Staff to locate where each invoice is stored within the system.
4. Auditability
AP automation really excels when an audit is required. The electronic audit trails provided by an automated invoice system make it simple to follow an invoice from receipt to payment and prevent fraud.
5. Productivity and teamwork
Since tedious, manual work can now be avoided, your teams will have more time to focus on the tasks that are important to them. With a user-friendly automation system, other teams can confidently submit purchase orders quickly and effectively. This implies that they require much less hand-holding and everyone - not just those in finance—can access these procedures.
Explore Boileau's Accounts Payable automation solutions further here or reach out to our sales team to start finding the RIGHT solutions for your business: Contact Us