Automation is a trending topic that has led to major changes across different departments in the current business world. Automation not only eliminates various business challenges and frustrations but can also increase growth and give businesses a competitive edge. Interestingly, while other departments increasingly adopt these new technologies, accounts payable departments in various industries still prefer processing their invoices manually.
However, these traditional processes slow down business operations, especially in light of digitally advanced accounts payable solutions. Manual accounts payable (AP) environments, which are paper-based, might have been effective years ago. However, they are tedious and prone to human errors. Businesses should consider automating their AP processes for the following reasons.
1. Saving Time
Accounts payable automation uses technology or digital systems to reduce common manual and repetitive business tasks, such as writing checks and data entry tasks. When paired with accounting tools, AP automation enables businesses to manage approvals, submit invoices, process payments, and complete many other tasks electronically from one platform.
Businesses can use this technology to eliminate or minimize manual workflow while speeding up business operations, such as process approvals, which often take longer. It also eliminates cases of wrong entries, misplaced invoices, and other problems associated with manual AP workflows.
2. Saving Money
Most business owners don’t realize that manual AP tasks, such as data entry, have high cumulative hidden costs. For instance, processing invoices manually costs approximately $15, while automated systems cost less than $5. As a result, automation significantly reduces labor costs, speeds up other processes such as invoice matching, and eliminates hard costs associated with document storage and postage.
It also eliminates the risk of late payments, overpaying invoices, or making duplicate invoices. An automated accounts payable workflow system will raise alerts if there are duplicate copies or overpayments and remind businesses of pending payment dates.
3. Reduces Accounting Risks
Managing business accounts and cash flow statements is challenging, especially for beginner entrepreneurs. Fortunately, automation can ease this by providing visibility into payment workflow and approvals. With this, common fraud and AP risks, such as duplicate payments, false billing, and other fraudulent transactions, can be tracked from the system.
Automated AP workflow software flags extra charges, duplicate invoices, and suspicious activities, giving you much-needed audit control. It protects your business from fraud and phishing scams that can cripple your business financially.
4. Real-Time Visibility
Automated AP solutions provide real-time updates that business managers and financial leaders use to make decisions affecting business growth. Financial managers can access the status of pending invoices, historical invoice information, and much more from the dashboard in real-time. Users can also generate ad hoc reports and easily export crucial information required by key business stakeholders.
From capturing data, routing invoices to eliminating discrepancies, accounts payable workflow processes integrate many manual moving parts. This eliminates many challenges faced by AP departments, such as data entry errors, misplaced invoices, and late payments associated with manually uploading invoices into the system. Other benefits of these automated systems include touchless processing, advanced security, and easy deployment.