Accounts payable (AP) is an accounting term that represents the amount a company owes to its creditors and suppliers. It is recorded on the balance sheet or through software under current liabilities. In contrast, an increase or decrease in total AP from the period prior will appear on the cash flow statement.
This is an important figure on a company's balance sheet that determines the growth and ensures cash flow. AP describes a function in a company that emphasizes processing payments for suppliers and vendors. It is beneficial to pay close attention to AP expenditure and maintain internal control to avoid inaccurate invoices.
Accounts Payable Workflow:
The workflow begins within any company when a supplier or vendor submits an invoice.
Different steps involved in the accounts payable (AP)process involve maintaining the master document, vendor invoices, coding or uploading invoices into the financial or the automation system, verifying and matching invoices, routing for approval, and processing payments.
These procedures occupy a lot of time and are tedious when performed manually. To complete all these processes, you need to hire full-time employees who spend long hours each day looking into invoices. Handling thousands of invoices manually will make you probably encounter a human error or a backlog. In order to deal with large backlogs, high costs, and losses due to human error, a technology automated software, Hermes, is very beneficial.
Hermes automation helps organizations process their invoice faster using cutting-edge technologies based on OCR and machine learning.
Accounts Payable Software:
Many companies use software to automate manual AP processes like GL coding, invoice approval, uploading invoice details, and identifying invoice duplication. This technology-driven processing software boosts the efficiency of a company that is handling high-volume invoices. The software provides visibility into current liabilities, processes and improve control over financial information.
Hermes is a simple yet advanced seamless invoice management software that is designed to streamline AP processes. Hermes automates, simplifies, and accelerates the Accounts Payable process with little to no human intervention.
Different technologies that make Hermes the best software include artificial intelligence, optical character recognition, and cloud-based processing.
Features of Accounts Payable Software:
Hermes is advanced technology-powered software that is helping clients with reduced ap invoice processing time and human errors. Let us have a look at the features of software:
- Automate the manual work to pay the invoice more efficiently.
- Connect invoices with popular financial and accounting solutions.
- Keep digital records in the cloud for easy access by authorized users.
- Manage cash flow with visible and transparent workflow.
- Reduce invoice processing time from five minutes to 20 seconds
- Handle backlogs and overnight invoices.
- Reduce human errors and improve the quality of output.
- Enhance invoicing speed and scale down dependency.
Accounts Payable vs. Account Receivable
These are both opposites, Accounts Payable is the money a company owes its vendors, while account receivable is the money that is owed to the company. Receivables determine the funds owed to the firm for services rendered. Accounts Payable represents the funds that the company owes to others.
Why automate Accounts Payable?
Every company receives invoices and makes payments to vendors. Processing invoices and paying bills requires plenty of time and is particularly costly. Manual work adds an additional strain on visibility and operational resource, which also burdens the accounting team. Using automation software, many companies improve the inefficiency associated with the manual AP process. With Accounts payable automation solutions, the procedure becomes faster, easier, and more secure.