The administrative work in accounts payable is an overwhelming burden for many businesses. It is a job that cannot be rushed, as mistakes can be costly. When invoices are not paid properly, businesses will miss out on early-payment discounts and run the risk of late payment fees. This can also damage the reputation with vendors and suppliers. However, automation can help simplify the process.
Setting up the process with automated accounts payable software can make a huge impact on businesses.
Why AP Automation?
Regardless of how an invoice arrives, the accounts payable software can be used to process the invoice. Users can scan paper invoices with a mobile phone, and the system triggers notifications when invoices are due and all payments can be done within the software.
The Benefits of Accounts Payable Automation
The following are the key benefits of accounts payable automation:
Processing invoices manually can allow mistakes to happen during the data entry. The errors mean that clients overpay or underpay, which results in lost money and embarrassment. AP software can eliminate data entry by extracting the data from invoices. The system will automatically read the amount due and the date can be captured automatically.
Streamline the Invoice Approval Process
When using the automated accounts payable solution, users can setup a workflow for all invoices to follow, and then the solution does the rest. The solution can match an invoice to a purchase order number and follows the approver’s flow. Approvers can authorize payments or halt an invoice for further investigation. Additionally, there is no more need to wait for someone to come to the office to clear the due accounts. The entire payment process can be recorded step-by-step for further review.
Leverage Early Payment Discounts
Paying invoices on time can get businesses better deals. Around half of businesses are missing early-payment discounts if they are not paying them on time. Automated accounts payable systems can track early payment opportunities, while the approval process makes it easy for clients. The savings can amount to hundreds of dollars per year.
The method of using AP software to pay accounts is more secure. Business owners/accountants can put payments on a dashboard to make sure everything is done right. This prevents fraud and protects businesses from committing any mistakes that occur with manual handling. Additionally, lost and misplaced paperwork becomes a thing of the past with a fully-automated system.
Payments can be quickly settled and if a specific invoice hasn’t been paid, clients can quickly check online. Likewise, the records in the database will help business to know whether the client is being audited by the tax department.
Better Understanding of Cash Flow
The paper-based process will not always make it easy to see what cash flow looks like. Employees have to manually enter the data into a spreadsheet and then generate charts for the workflow. It is a labor-intensive and slow process. To find the data, employees have to go searching which takes a large amount of time.
Automated accounts payable solutions can integrate with accounting software and track cash flow in real-time. The solution helps to keep track of spending, compare cash-in and cash-out, and see emerging cashflow problems.
Quick reports can help analyze the data and lets businesses make smarter decisions. The data gives businesses greater confidence in making business decisions.
Switch to Automation
Business owners want to save time, but they don’t realize software can help achieve that goal. Do not underestimate what difference businesses can make by switching to an automated accounts payable solution. Choose AP software that closely integrates with accounting solutions. Early payment discounts alone can pay many times over, giving back to the businesses what they put in and more.
Businesses will immediately notice how accounts payable automation can help save time and money. Gaining real-time insights into the cashflow proves to be the biggest benefit in the long run. This would help to understand the business while allowing for cost cuts and generating profits.