Technology has rapidly revolutionized the way that businesses operate over the last few decades. The trend only looks set to continue for the foreseeable future, making it more important than ever for ambitious companies to embrace the support of technology.
While all areas of business can benefit from technological developments, one we want to highlight today is the finance department. In particular, the accounts payable and invoicing process. These have traditionally been entirely manual and heavily time-consuming in nature, but the development of accounts payable automation has the potential to revolutionize these processes.
How accounts payable traditionally functions
Accounts payable (AP) is one of the most important areas of any business to manage, but has traditionally involved a lot of manual data entry and input. From the receiving of invoices to verifying purchase orders, matching invoices with those orders, obtaining approvals and making payments, there are many steps involved. Each of these requires time investment from the team and is subject to potential delays and errors.
Not only that, the entirely manual AP process incurs high administrative and operational costs. The relative cost of processing just one invoice involves a large degree of manual input and manpower hours.
On the whole, the traditional invoicing process is highly inefficient and leaves businesses vulnerable to cash flow disruption, strained business relationships and high operational costs.
The revolution of accounts payable automation
How accounts payable automation benefits businesses is extremely simple – it streamlines the entire invoicing process, utilizing technology to offload repetitive tasks to the software and reducing the need for human input into the process. Members of the team only need to set up the rules for the automation to follow and monitor its outputs.
AP automation automatically captures invoices, inputting their data into the system and entirely removing the need for manual data entry. The system can also validate data by crosschecking documents, catching potential errors ahead of time and flagging potential issues for stakeholders to quickly address.
As it also has the ability to seamlessly integrate with other backend business systems – such as enterprise resource planning (ERP) and customer relationship management (CRM) software – data can easily flow throughout these core systems.
The wider benefits of accounts payable automation
Streamlining and modernizing the invoicing process is only one of the benefits that accounts payable automation brings to businesses. Incorporating AP automation into your finance team can deliver significant improvements in both accuracy and efficiency, as the data is captured and processed automatically.
By handing over much of the busywork of managing invoices and accounts payable to the AP automation software, members of the team are freed up to work on other tasks instead. Not only does this result in higher productivity – as the same team can now handle additional work in the time they’d be spending on the invoicing process – but it also makes for a more satisfying work balance.
With your valuable team members able to focus their efforts on value-adding and more stimulating tasks they will likely feel more fulfilled in their role. Utilizing automation to support the team and remove their need to invest time in tedious and repetitive tasks can improve team morale, as well as helping to strengthen external relationships with suppliers and vendors.
As invoices can be processed at much faster speeds with the help of AP automation this should naturally foster stronger business to business relations. Companies who can demonstrate efficiency and fast turnaround times, without sacrificing quality and accuracy, will see a greater willingness to engage in future work or contracts.
Accounts payable automation has the potential to revolutionize the way that businesses manage their invoicing process and wider financial operations. With the support of automation, the efficiency, accuracy and turnaround times of the process can improve drastically compared to purely manual invoice handling.
Source: businesshint.co.uk
