3 Back-Office Problems That AP Automation Can Help Solve
January 29, 2021
An accounts payable (AP) automation solution at the broadest level simplifies complex accounts payable activities and helps manage large volumes of invoices, improving the efficiency and accuracy of the accounts payable department.
While that’s the definition, that doesn’t mean every AP automation solution is built the same. What are the mechanics that make up the most valuable automation solutions? And how do you know what to look for?
Those often-asked questions luckily have straightforward answers. It’s simply a matter of accessing them and understanding the aspects of an intelligent AP automation solution.
Here we’ll take a look those aspects plus defining characteristics of leaders in automation.
Struggling with resource limitations, wasted time resulting in late payments, or financial data transparency?
AP automation can help resolve these key back-office issues.
How AP automation improves the legacy accounts payable workflow
Managing and approving invoices in a legacy AP workflow is tedious and cumbersome, requiring several manual steps and open to severe inefficiency. Repetitive, manual data entry creates room for error in invoice processing. Multiple approvals and handoffs mean significant extra time. Payment processing and fulfillment brings its own set of processes that do not lend well to speed, cost, or scale. Then, there’s also the matter of post-payment invoice management to create the necessary audit trail.
The good news is that it doesn’t have to be that way.
Businesses can reduce costs associated with the invoice lifecycle by 80% and significantly reduce time by investing in intelligent automation. Here is a look at how intelligent AP automation improves the legacy workflow.
Legacy Accounts Payable Problem: Limited Resources
AP Automation Solution: Increased Performance
Accounts payable teams manage some of businesses most important financial data, yet often are departments that run lean. The unintended consequence can be that teams find themselves in a situation where it’s difficult to scale alongside the business without the right tools. With an accounts payable automation solution, everything from invoicing to processing and payment becomes a seamless workflow.
Artificial intelligence and machine learning allow those workflows to be optimized, while also helping to find efficiencies in the accounts payable process. The result? The accounts payable department can perform at a high level while still running lean.
Another issue lean teams run into in a legacy model is the reliance on tribal knowledge. That puts organizations in a tough position when that person or individuals are out of or leave the office. In a modern AP automation solution, that’s an easily resolved problem.
Electronic invoicing and storage mean all documents are in a central location with quick accessibility. Businesses no longer must rely on tribal knowledge. Rather, multiple members can jump in to facilitate the processing and payment of invoices.
When manual processes enter the workflow, errors are unavoidable. It’s only human. But with intelligent automation and the combination of a business-rules engine and data-capture engine, errors can be all but eliminated. Plus, accounts payable automation software complies with accounting standards and regulations for AP processing so you don’t have to carry the burden of compliance.
Legacy Accounts Payable Problem: Wasted Time Results in Late Payments or Invoices
AP Automation Solution: Increased Efficiency
A modern accounts payable workflow via intelligent automation means improved processes and shorter payment cycles, delivered efficiently and accurately. Ultimately, businesses can avoid late fees and optimize cash flow. Plus, they can take advantage of early payment discounts, which can add up to significant savings. What business wouldn’t want to allocate those valuable dollars in savings to more strategic business initiatives?
Also, on the topic of strategic initiatives, increased efficiency not only translates to cost savings, but also time savings. With more time back, accounts payable teams can focus more on impactful operational objectives and value-added tasks.
Businesses can reduce costs associated with the invoice lifecycle by 80% while gaining significant operational efficiencies by investing in intelligent AP automation.
Legacy Accounts Payable Problem: Limited Insight into Financial Data
AP Automation Solution: Access and Visibility into A Rich Dataset
What if you needed to quickly access a report showing outstanding payments by vendor? Or recent expenses by product, expense type or category? This represents crucial data finance leaders need to make strategic and tactical decisions.
In a legacy system, it can be difficult to get that insight at all. Siloed data and the inability to access it quickly compound the issue. Delays in reporting or simply just the significant investment of time and resources to pull the data results in delays in moving the business forward.
With AP automation software, access to data is at a finance leader’s fingertips. A single repository for AP documents and system integrations get data out of siloes. Finance leaders and their teams get greater visibility, control, and reporting on each payment sent.
Key considerations for an AP automation solution and why
When comparing AP automation solutions, it’s important to pay attention to a few key considerations. These are a few of the characteristics that define the leaders.
Proper AP Integrations
What good is AP automation if it doesn’t alleviate manual processes across the entire lifecycle? That’s why it’s important to make sure that the accounts payable automation solution you choose has seamless integration with other systems. For example, proper integration with your ERP or accounting system means an end to duplication and manually copying information. And when it comes to the end of the month review, accounts payable software makes that reconciliation process simple.
No one wants the experience of being overpromised and then underdelivered. The problem is that the term ‘intelligence’ is a vague area that makes it difficult to understand what falls under that umbrella and the differing levels of intelligent automation.
What’s important to note is that the best solutions incorporate elements of artificial intelligence and machine learning to optimize workflows and find efficiencies. For example, automatic data capture combines modern optical character recognition (OCR) technology with AI. This type of technology can also alert you to signs of suspicious activity, duplicated invoices, or other potential signs of fraud.
Another aspect of intelligence is neural networks, which can handle tasks that have a deep level of complexity. In the accounts payable context, neural networks apply AI to smartly map and populate invoice data based on a business’ specifications.
An experienced and consultative partner can make all the difference. While that may seem obvious, there are a variety of AP automation solutions in market. You should know exactly what you’re getting out of the solution as well as the partnership. A true partner is one that has walked in your shoes and can provide the technology, guidance, and expertise to help you turn AP into a strategic and scalable resource.
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