How Can Accounts Payable Automation boost business?
Paper and people-based processes incur extraordinary expenses and missing business opportunities. A study that showed:
• Paper accounts for 35% of all invoices in the United States.
• 42% of US businesses use paper checks to pay their suppliers.
As popular American business magazine Forbes mentioned, Automate or Stagnate. It is high time for business to automate their AP processes for good.
Many firms suffer from accounts payable bottlenecks caused by human data input, inefficient processes, and manual routing of invoices for review and approval. Accounts payable (A/P) automation can save costs and increase efficiency by automating numerous complex operations in two significant areas: invoice processing and payments.
1) Automated Invoice Processing
Using the correct accounts payable (A/P) software to handle your bills minimizes cost, time, human-prone errors, and the risk of fraud when compared to manual data input and paper-based alternatives.
According to a recent CFO.com poll, 75% of businesses reported average processing expenses of $9 to $10 per invoice. Automation can cut or eliminate expenditures such as manual labor, postal services, office supplies (paper, printers, toner, etc.), and maintenance. Going paperless and reducing manual activities using a digital workflow can minimize the cost per unit processed, resulting in massive savings for giant corporations.
Time is money; You do not have to spend 12 hours a day combing through mounds of never-ending paper with AP invoice automation. No more slow, difficult-to-manage paper-based systems. There will be no more manual processes wasting time and resources. Invoices are automatically sent into your customized workflow, directed to the appropriate people for approval, and reviewed remotely by those people. When invoices are authorized, the information is transmitted immediately to your ERP for finalization, allowing your AP staff to focus on more vital tasks.
It is natural and human to make mistakes. These errors can sometimes turn out to be costly. Fortunately, there is a workaround when it comes to processing invoices. Replace manual data entry with intelligent data extraction accounts payable software that pulls data from your vendor invoices, regardless of format, to eliminate errors. The correct solution will also manage the coding and approval routing for you, eliminating the possibility of errors caused by typos or misplaced papers.
Avoid invoice fraud by detecting invoice abnormalities, connecting them to purchase orders or goods receipts, and following invoice activity. Manually doing this will result in higher costs and decreased effectiveness. With capabilities such as Invoice processing automation safeguards your operations, reducing the risk of fraud.
2) Automated Payments
By transforming paper checks and tedious processes into a seamless payment workflow, AP Payment Automation can save you around $10 each (approximately) while increasing visibility, expanding control, providing remote payment functionality, improving vendor relationships, and generating income.
Control & Visibility
Low transaction costs, faster processing cycle times, decreased risk, shorter reaction times, improved forecasting and management, and a higher ability to manage cash flow and essential accounting operations are all benefits of high visibility. Audit controls ensure that AP transactions get processed according to policies, procedures, and regulations. Automated reports enable real-time, 24-hour access to payment and vendor information, freeing up staff time to focus on strategic goals and critical activities while providing complete payment visibility to those requiring it.
Many businesses are finding it increasingly difficult to process payments manually, mainly if checks must be produced from the office and signed by many persons. Cloud-based payment systems can provide remote access from any location while boosting security with bank-level protection and enabling no-touch payments from any site.
Relationships with Vendors
Digital payment automation avoids duplicate invoice payments, reduces vendor late payment costs, collects negotiated discounts and early payment discounts, and prevents fraudulent charges. Most vendors prefer digital payments over paper checks because they are easier to execute, take less time to process, and are more secure.
Choose a payment solution that can integrate with any ERP, accounting system, or in-house solution. Organizations that have created a collaborative framework enabled by an automated, integrated AP system process more than twice as many payments as others, resulting in considerable time and money savings. This degree of adaptability is required to make automation work for you.
As digital payments become more prevalent, you may hesitate to make the switch. But don't worry - change is inevitable, and businesses must adapt to new payment options or risk falling behind. Vendor management can be complex for companies, but the top accounts payable automation solutions provide vendor onboarding and assistance. They will help your vendors enroll in the program, select their preferred payment method, and manage payments, so your finance team can focus on more priority tasks.
Your accounts payable department will save money and enhance efficiency through invoice processing and payment automation. Automation is a vital building block for reducing costs and expediting invoice collection, validation, inquiries, approvals, reconciliation, settlements, and payments. Still unsure? Calculate your ROI today to see how much money you could save with accounts payable automation solutions like Hermes – AP automation.