More and more businesses are adopting automated solutions for invoice processing and payment, dramatically speeding up the accounts payable (AP) cycle. Automated solutions are helping to improve accuracy and compliance, while also reducing the overall cost of processing vendor invoices. In this article, we give some insights on how payment automation will affect accounts payable in the future.
1) Reduced Costs
Manually processing invoices is time consuming and labour intensive. Paying suppliers on time is a constant battle and late payments cause disruption to the business as well as more work for AP dealing with copy invoices and queries. Processing exceptions with the business via email or non-structured methods means no visibility of where documents are and the main contributory factor to late payment. There are a myriad of technologies to automate invoice processing and query resolution, which will significantly reduce costs, improve the process for end users and relationships with suppliers.For example, many companies are now using einvoicing combined with OCR to get all invoices into their ERP electronically. Technology also provides automated matching and posting of invoices with no touch and automatic sending of workflows based on rules. Get in touch to learn how our einvoicing service combined with cloud OCR can help automate your e-invoicing process.
2) Increased Efficiency
As businesses increasingly look for ways to improve their invoicing process, it’s clear that automation will play a key role in increasing efficiency in the years to come. By automating repetitive tasks such as data entry and invoice reconciliation, accounts payable managers will be able to focus on more strategic tasks such as vendor management and exception resolution. In addition, automation will help to reduce errors and improve compliance with internal controls.
3) Automated Workflow
Automated workflow can be configured to notify AP and business users when vendor payments are near due or overdue. Automatically expediting workflows, sending reminders, copying in the manager or escalating the workflow are becoming common place in the latest AP automation software solutions. . This will help ensure that invoices are paid on time, reduce the risk of late fees and interest charges plus ultimately reduce supplier queries Business users are notorious for delaying the payment process due to sitting on issues for too long, but having everything on workflow means you have visibility of the documents wherever they are in the process and report on workflow performance.
4) Proactive Problem Solving
By automating the AP process, companies free up time and resources that can be better spent on proactive problem solving. If AP can eliminate the data entry process via einvoicing, OCR or managed services as well as automate the posting of say 50-70% of their documents then that gives more value-add time to manage the supplier relationship, do more statement recs and focus on improvements. Furthermore, if you can automate workflow based on rules then that further reduces the volume of documents AP have to touch.
5) Early Payment Discounts
By automating the payments process and making timely payments, businesses can potentially secure Early Payment Terms (EPT) from certain suppliers. EPTs can significantly reduce the cost of goods and services, providing a financial benefit to the business and improving the relationship of trust with important suppliers.
6) Better Spend Management
Automating accounts payable will allow businesses to streamline spend management and improve efficiency. Automated AP systems reduce errors and improve visibility into spend, as well as reducing the amount of time spent on manually processing invoices. In addition, automated accounts payable will help improve cash flow management and optimise working capital.
7) Better Strategic Planning
When supplier invoices are paid automatically, there is no risk of late payments or missed payments. This gives businesses a clear picture of their financial situation and enables them to make more informed decisions about where to allocate their resources.
Cogent Consulting offer AP automation support using a range of SAP-compatible software solutions, contracted invoice processing services, and tailored advice on AP process optimisation. Find out more today by calling 01536 266585.
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