Today, many organizations still follow the traditional method of manual accounts payable.
As we all know, manual accounts payable process is incredibly tedious, consumes a lot of time, error-prone, needs attention to details, and is often dependent on the presence of CFOs to finalize.
The four largest pain points identified during the process by the State of Accounts Payable are:
- Invoice approval
- Data entry and invoice coding
- Matching invoices with purchasing orders
- Getting the checks signed and emailed
Accounts payable automation is a more effective option now as it minimizes expenses while enhancing the efficiency of your department. Here we present how automating AP solves the most tedious tasks.
Streamlines Invoice Approvals
The invoice approval process involves routing the invoice to the right approver. When the average worker gets 150 to 200 emails every day, it is possible that the right approver may lose invoice which requires to be revised in the shuffle of the inbox.
So, it is for this reason that manual invoice approval needs attention, monitor invoice’s trails, and time to chase down trails when team heads fail to follow up.
By automating accounts payable, all approvals are documented automatically and preserved in a central data repository, making it easy to search during audits. It totally negates the need to juggle through multiple email threads.
Moreover, businesses can also set up customized invoice routing rules with accounts payable automation to make sure that the invoices are routed to the appropriate invoice approver automatically.
Many companies still have to rely on having a controller in the office to sign the checks. It can turn out to be a lengthy process if the required person is out of office. Automating accounts payable simplifies payments to a process in just a few clicks.
The payment will immediately go out on a scheduled data upon approval, and no controller or CFO needs to be present physically for signature.
Automation allows organizations to transition away from check payments and toward more safe and beneficial electronic payments such as ACH transfers and virtual cards. It minimizes the expenses of physical goods and the risk of fraudulent activities.
Optimizes Data Capture and Invoice Coding
Data capture and invoice coding is a pivotal part of the AP process. When the employees get busy with paperwork, they tend to shift their focus to simply coding invoices in the fastest way possible.
This method of manually entering data enhances the likelihood of having errors. It may include the omission of data, typos, duplicate entries, and more. This may cost your business both money and time and may take a while to reconcile.
When employees are focusing on reconciling errors, they are not finishing the tasks at hand or working towards value-add projects. The time spent on unnecessary expenses could be put to better use. By automating accounts payable, invoices are captured in bulk automatically.
Accounts payable automation solutions include OCR technology with an additional layer of human review to make sure 99.5 percent accuracy during data capture. Also, they can flag duplicate invoices before they are flagged into the accounting software.
Automation enhances your team’s productivity levels, as it is 3x faster than the manual process and provides your team adequate time so they can focus on other important tasks and projects.
Simplifies Matching Invoices to Purchase Orders (PO)
Matching invoices manually to the appropriate PO needs attention to detail. It is quite challenging and at the same time, time-consuming. Inaccurately matched invoices can create expenses and negatively impact relationships with suppliers.
Also, this process slows down businesses and becomes more complex as the business develops.
Automated purchase order matching compare invoice line item with the data which is already in your accounting software using matching algorithms. When purchase order data is found, the solution examines and flags potential errors.
It can also be customized to set varying tolerance level on inconsistencies.
The Bottom Line
Automation eliminates these four major tasks in accounts payable in the simplest way. SutiAP offers end-to-end accounts payable automation that automates payment and invoice processing.
It is observed that businesses save 75 percent or more on payment processing costs and receive cashback rewards from credit card payments. Moreover, businesses increase effectiveness and get a clear insight into cash flow operations.
The solution minimizes payment risk with advanced security features such as two-factor authentication.
Marissa Levin is a marketing consultant, freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP, and Cloud/SaaS trends.
More Related Posts
- Why Data Entry Outsourcing is Best Option
- Why Small Businesses Should Invest in AI
- How To Use Remote Desktop Software
- Why Choose Kotlin For Android App Development
- 6 Best Artificial Intelligence Tools And Applications