Historically, finance operations have been riddled with time-consuming manual tasks that require a significant investment from the team to handle. Relying on manual processes can dramatically slow down businesses, especially if they are looking to grow.
Fortunately, businesses no longer need to rely on manual accounts payable processes and can instead utilize accounts payable automation software. This allows for almost the entirety of the process to be automated, instantly cutting down on the amount of time that teams need to spend on any of these tasks.
To understand just how accounts payable automation can streamline business processes and transform the role of the finance team, read on as we explore the benefits of this software solution.
Simplifying invoice processing
At the heart of any accounts payable process is the task of managing invoices. Manual processes require staff to receive, enter, and approve invoices by hand—a process that can be both tedious and fraught with a high risk of errors. This approach also leads to inefficiencies as employees are required to spend time chasing down approvals, resolving discrepancies, and entering data into accounting systems.
The implementation of accounts payable (AP) automation dramatically simplifies invoice processing by digitizing the entire workflow.
It starts with electronic invoice capture, which allows invoices to be submitted in various formats, such as email, PDF, or electronic data interchange (EDI). The system then uses optical character recognition (OCR) technology to automatically extract the key invoice details.
This data is then automatically entered into the system, eliminating the need for manual data entry – particularly when the AP automation software is synced to other core business systems.
This level of automation significantly reduces the time that staff are required to spend on processing invoices, allowing businesses to handle higher volumes of invoices without either increasing their workforce or compromising accuracy.
Enhancing accuracy and reducing errors
Manual data entry and processing are well known to be prone to errors, whether through a mistyped invoice number, incorrect amount, or duplicate payment. Any of these mistakes can prove costly for businesses, both financially and in terms of their relationships with suppliers.
By automating the accounts payable process, businesses can greatly minimize the amount of manual data entry required and thus reduce the risk of human error. As the automated system captures invoices with a high degree of accuracy, automatically matching them against other documents, this makes for a significant reduction in errors.
This overall increase in accuracy helps businesses avoid overpayments, underpayments, and other costly errors, ultimately improving financial management in the process.
Improving financial transparency and control
Another way that AP automation can benefit operations is through the real-time visibility it provides into your company’s financial data. With manual accounts payable processes, tracking the status of invoices and payments can be difficult. In some cases, it is not uncommon for businesses to lose track of outstanding invoices, miss payment deadlines, or face wider challenges in understanding their cash flow situation at any given moment.
But with the support of AP automation all invoices, approvals, and payments are logged and tracked within a centralized system. This gives finance teams real-time visibility, allowing them to instantly access information about pending approvals, payment schedules, and overall cash flow.
With detailed reports and dashboards also integrated into AP automation software, it becomes a simple matter to make informed decisions based on up-to-date invoicing data.
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Accounts payable automation is a powerful tool for businesses looking to streamline their finance operations, reduce costs, and improve accuracy. By automating key processes, businesses can free up valuable resources, improve financial transparency, and reduce the risk of errors.
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