Accounts Payable Automation (AP Automation) is the process of handling accounts payable digitally. Manual processes are removed in place of automation, revolutionising the way businesses pay their invoices. This removes the risk of human error and makes everything more efficient.
Where does automation come in with accounts payable?
AP automation technology enables you to automate routine steps in your accounts payable. These include receiving invoices, coding, routing for approval, making payments and reconciliation. The phrase ‘touchless processing’ is sometimes used. This is because AP automation removes manual processes for inputting data at every stage. The only manual input may be to sign off on payments with a click of the mouse.
The software used in AP automation often provides dashboards and analytic tools that assist with the management of AP processes and identify issues. By digitising all accounts payable data, it is all stored in a single system. This makes it far simpler to search for audit information.
How does AP automation work?
With AP automation software, your suppliers’ invoices will be converted into a standard digital format. They will subsequently enter a digital workflow that finishes with the suppliers being paid.
From the outset, AP automation extracts information from invoices using optical character recognition (OCR). Machine learning is sometimes used to recognise patterns over time. This can improve accuracy – for instance, it may suggest approval routing or general ledger codes based on identified patterns. By customising business rules, you may be able to completely remove the need for manual intervention in the majority of invoices.
What are the benefits of AP automation?
The benefits of AP automation are many. Some relate to a rapid return on investment. By minimising the need for manual input, your processing costs can be cut in the blink of an eye. It can also make AP more scalable as your business grows since you won’t need to hire more personnel.
AP automation also gives you the tools to tighten up management of cash flow and payments. By streamlining the payment process, it can even make you better able to capture payment discounts from suppliers. Other benefits for the financial group include:
- Fewer errors.
- A reduction in instances of fraud.
- Smoother audits.
Beyond that, the entire organisation can benefit from AP automation:
- With fewer manual errors, there will be less time spent on investigating problems.
- There will be less paper storage and postage/delivery costs will be reduced.
- Efforts for compliance and audits become much easier.
- Prompt payment will enhance your reputation.
- Staff can focus on higher value tasks instead of spending time on manual data entry.
What accounts payable tasks can be automated?
Certain AP tasks benefit greatly from automation. They are usually the ones that enable you to increase accuracy or reduce processing time. Both of these things result in cost savings. Compared with manual processing, the following steps can be greatly improved by AP automation:
- Invoice Matching: Automation can match invoices to supporting documents like receiving documents and purchase orders. This is called three-way matching. Automating this makes it far quicker and more accurate than manual matching, particularly when those documents would otherwise be stored at different locations.
- Data Entry: Entering data manually is slow and error-prone. Automating data capture from source documents is accurate and happens very quickly.
- Coding Invoices: Automation tools allow you to establish rules for setting the appropriate code in the general ledger for every invoice. This is a huge time saver and eliminates the issue of inconsistencies in manual coding.
- Approval Routing: It is faster to have electronic routing to providers than it is to send documents manually. It also ensures enhanced tracking throughout the workflow.
How can accounts payable be automated?
AP automation is usually applied through the implementation of AP software. This can be done via an on-premises system if you have the budget to invest in the infrastructure. Or you can access it through a Software-as-a-Service (SaaS) model, whereby the application is hosted in the cloud.
Once an AP system is in place, there will have to be a period where finance staff and other stakeholders are trained. It is also important to configure rules so that you can take maximum advantage of automation. The AP process is fairly standard, but companies often have unique requirements. These will need to be accommodated in the automated workflows you establish.
How To Find The Right AP Software
Selecting the right software to implement AP automation for your business is a process. The following 4 steps need to be considered:
- Planning: You should assemble a cross-functional team that can define your company goals for implementing AP automation.
- Gathering Requirements: Your AP department will have records of how your accounts payable processing currently works. This can be used to create a list of requirements for automating AP. When this is done, you can compile a request for proposal (RFP) that can be sent to vendors that tick the right boxes.
- Evaluating Vendors: At this stage, you evaluate proposals from vendors that respond to your RFP. Analyse what they put in their proposed solutions, including features, implementation strategies and costs.
- Selecting The Right Vendor: Once you have delved into the proposals, you can take a deep dive into the most promising vendors. You may want to develop in-depth discovery documents and request demos. Eventually, you will be ready to select a supplier.
NetSuite For AP Automation
NetSuite offers an Accounts Payable Solution that can help you save time and gain more control. Automated invoice processing and payment will make your business more productive. For example, NetSuite’s module can minimise the time and effort spent on processing invoices by removing manual entry and calculating discounts on the fly.
The software handles exception processing when mismatches arise between purchase orders and invoices. NetSuite also delivers real-time insights into every aspect of the accounts payable process. This way, you reduce the potential for fraudulent invoice payments or lost bills.
Why choose Eventura as your ERP implementation partner?
Eventura has been providing robust business solutions to countless organisations for over two decades. We are ERP experts and can identify all of your business needs, and deliver a comprehensive ERP solution that works for you.
As Sage 200 Partners and NetSuite Solution Providers, we can help you identify which solution will fit your business needs the best. Our expert team of business analysts, developers, consultants, technicians and support staff can guide you through your entire project, from initial scoping through to implementation and on-going support.
We’re also managed IT service providers meaning we can help you identify your entire IT infrastructure requirements from day one. If you would like to speak to one of our ERP experts to discuss your options or request a free demo, you can request a free call back here.
