Why Is Accounts Payable Automation On The Rise?


The accounts payable team discussing why automation is on the rise.


Because of the control it has over company spending, the accounts payable department is foundational for any business. Despite that, investment in automation software for AP has not always kept pace with other areas. As a result, many AP departments are still mired in partial or even zero software automation while trying to manage complicated and time-consuming processes like invoice processing.


Currently, 77% of AP departments utilise some form of automation. But of these, most are at still the lower end of the integration scale. Paper use continues and full end-to-end automation is still a minority category. However, changes are afoot. Many AP managers are now taking the necessary steps towards process maturity by digitising invoices, optimising processes and introducing more software comprehensive solutions. So why the change?

Costs And Accuracy

A key driver of the adoption of new software in business departments is cost reduction and AP automation is no exception. Manual processing of invoices is laborious, slow and subject to human error. Desk-level processing by individuals can often result in inconsistent methods which will require resolution later on. All of this takes extra time and resources, which, given recent budget cuts and redundancies in many departments, can soon become unmanageable.

Flaws in AP processing can also lead to direct costs through duplicate invoices. These may be issued by suppliers following missed deadlines or by accident. In either case, the extra payments affect balance sheets, even if they are later returned. Additionally, late payments often incur extra fees and, by the same token, early payments can gain discounts.

Frees Staff To Improve Standards

The release of staff from the burdens of manual invoice processing means they can focus on other tasks that are demanding attention. Automation means that consistent standards are applied across the board, with slow, error-prone manual inspections no longer necessary. Staff are then less likely to cut corners to meet deadlines. Less rushing results in fewer mistakes, which is ultimately faster.

Better Spending Management

AP software automation means that invoice processing can be better managed and analysed. Payment timings can be optimised for early discounts or capital retention with little risk of default. And it allows for much greater oversight of financial outlay, promoting clear spending controls and improved budget forecasting. With automation, these benefits are achieved without high labour costs and with superior standards of accuracy.

Business Relations

Better AP management can bolster the department’s standing in the business. AP should be at the forefront of business considerations, given the control that it has over company spending, but poor performance is detrimental to reputation. By introducing software automation, greater accountability, transparency and control of outgoing and incoming payments can be achieved. Thus facilitated, AP can show its true importance at the heart of the business.

Find Out More

To learn more about your options for accounts payable automation, get in touch or book a live demo with Cogent Consulting.

SAP Invoice Automation Guide - Cogent Consulting

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