How Accounts Payable Departments Can Stop Cuts By Using Automation Software


An employee in the accounts payable department goes through the automated invoices.


Tasks like invoice processing have always been a significant burden for accounts payable departments. The importance of managing payments correctly, combined with the inherent difficulties of maintaining multiple supplier relations, POs and resolutions means that AP departments have a workload that is both significant and vital. And yet too often they can be seen as a liability to management.




Recent economic pressures have only exacerbated these pressures and the risks of errors are now more acute than ever. Such poor performance can lead management to consider cuts to AP. What can AP managers do to maintain the status of their departments?

Business Pressures On Accounts Payable

Invoice processing is one of the central tasks of AP departments. But traditional processing is labour and resource intensive. Invoices must be received, collated and approved. If they are received in paper form, they may need to be imported into software systems using OCR. PO matching and validation, as well as checking for duplicates and validation, takes time and is error prone.

With manual processing, invoice processors may use different methods or standards. Even with partial automation, this can still be a major source of inconsistency. To be fully effective, AP departments need to achieve consistency at all levels. Yet process maturity is reckoned to have been achieved by less than 20% of businesses.

Automation Is The Solution

Automation software dramatically improves the efficiency and accuracy of invoice processing. Over three-quarters of AP departments are now using some level of automated software. However, the majority are still only adopting it at a low level, with some way to go before end-to-end automation is achieved. Full process maturity, which accompanies automation, is, however, the best way to avoid the risk of mistakes that can be damaging to AP departments’ standing.

Accuracy And Efficiency

Some level of human error is inevitable where data is handled manually. Duplicate or lost invoices or problems matching purchase orders can result in excessive back-and-forth with suppliers and frayed relationships, all of which may lead to a lack of trust in the AP department. Accounts payable software helps to rationalise processes, keeping all parties happy and promoting better business in future.

Payment Benefits

Inefficient processing often results in duplicate invoices and unnecessary payments. Late payments are also possible where invoices are inconsistently managed. And while late payments can result in costly penalties, early payments can often gain discounts. Alternatively, where appropriate, timings can also be arranged to benefit balance sheets by payment closer to deadlines. Automated software allows you to choose the right strategy without risking reputational damage for your department. Such invoice settlement strategies are of benefit across the company and can help retain budget resources for your department.

Time Savings

Manual processes are generally more time-consuming in themselves, and even more so when inconsistent or erroneous. These delays may result in late payments, reissued invoices and extra staff workload. By incorporating automation, you can promote the status of the AP in the business, encouraging managers to invest in your department rather than mistrust or outsourcing.

Discover More About AP Automation Software

If you’d like to learn more about software improvements can benefit your own AP processes, contact Cogent Consulting for a live demo.

SAP Invoice Automation Guide - Cogent Consulting
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