One of the best approaches to boosting your efficiency and saving precious time and money is by automating your accounts payable process.
Accounts payable (AP) automation has really emerged as a low hanging fruit when it comes to boosting the performance of your team, especially when it comes to automating invoice processing, managing approvals and processing payments.
Automating your AP can offer a number of key benefits: your team will be faster, you’ll ensure compliance with payment regulations and improve supplier relationships, just to name a few.
In this post, we will explore the extensive list of 16 key benefits of ap automation, so read on to learn more about all the treats that AP automation brings to your business!
Top Benefits of AP Automation:
- Improves Cash Flow Management
- Enhances Visibility and Control
- Reduces Costs
- Insures Security
- Improves Vendor Relationships
- Increases Productivity
- Advances Decision Making
- Enhances Accuracy
- Improves Audit Readiness
- Decreases Payment Processing Time
- Reduces Paper Usage and Storage Costs
- Improves Compliance with Tax Laws
- Enhances Scalability
- Reduces Manual Data Entry Workloads
- Increases Employee Satisfaction
- Makes Your Work Easy
1. Improves Cash Flow Management
Automation eliminates manual data entry errors, ensuring invoices are processed and paid on time, accurately and efficiently. By streamlining invoice processing and payment, companies can better track and forecast incoming and outgoing cash.
AP automation also reduces the risk of late payments and lost invoices, securing timely payments to vendors. Overall, implementing AP automation can lead to better cash flow management and improved financial health for your business.
2. Enhances Visibility and Control
Providing real-time insights into payment status, vendor relationships, and spending patterns can greatly enhance visibility and control for a business. With a centralized system for managing invoices and payments, there is less room for error or missed deadlines.
Finance leaders can track spending and monitor cash flow in real time. Enhanced visibility also helps with decision making, as all financial information is easily accessible in one place.
3. Reduces Costs
Reduced need for manual work plus better productivity equals cost savings.
Automating accounts payable processes can significantly reduce expenses and costs for your company. Manual data entry, document printing and mailing, and reconciliation take up valuable time and resources. With automation, these tasks can be streamlined and completed faster and more efficiently.
Additionally, automating invoice processing can help catch errors and duplicate payments, leading to decreased spending. The result is a more cost-effective accounts payable department.
4. Insures Security
Implementing AP automation can provide peace of mind and improve protection for a company’s financial information.
Manual entry and storage of invoices and payments leaves room for human error and potential security breaches. AP automation allows for more secure storage of sensitive financial data and can also include additional layers of security, such as multi-factor authentication.
Automating the payment process can also reduce the risk of fraudulent payments being made.
5. Improves Vendor Relationships
Timely and accurate payments, improved communication and collaboration with vendors is of the essence for any business. AP automation can improve vendor relationships in a number of ways.
First, it eliminates the possibility of human error in payment processing, which can lead to timely and accurate payments for vendors. Secondly, automating invoicing and communication can streamline the entire payment process, leading to quicker turnaround times for vendors to receive their payments. Finally, using an automated system allows for greater transparency and communication with vendors, as all parties have access to the same information and updates in real time.
6. Increases Productivity
With AP automation manual tasks are eliminated, allowing employees to focus on high-value tasks that drive business growth.
You can increase your company’s productivity by streamlining and simplifying tasks. AP automation can eliminate manual data entry, reduce errors, and speed up payment processing. This frees up time for employees to focus on more strategic tasks and improve their overall efficiency. Additionally, automating invoice approvals and tracking can provide better visibility into spending and cash flow management, which leads to significant savings in time and resources for a business.
7. Advances Decision Making
Real-time insights into cash flow and spending trends enables more strategic decision making about finances.
Automation of accounts payable processes allows for more accurate and timely reporting of financial data. This, in turn, improves decision making capabilities for both finance teams and company leadership. With automated processes, there is less room for errors and missed invoice payments, which increases your ability to make more informed decisions about budgeting and spending.
8. Enhances Accuracy
AP automation is the key to ensuring all invoices and payments are processed accurately. It eliminates manual errors and any confusion that may arise during your company’s day-to-day life, especially when it comes down to how fast things get done!
Most AP automation systems use technology such as optical character recognition (OCR) to accurately capture and input invoice information. These systems also have built-in checks and balances to catch any errors, ensuring that all payments are made correctly and on time. The result is more reliable financial reporting and better decision-making.
9. Improves Audit Readiness
Audit time is an especially stressful period for finance teams, who struggle to collect all the documents manually and prepare them for audit. An automated process is an efficient way to generate necessary documents for audits, making it easier than ever before!
AP automation improves audit readiness by reducing the risk of human error. With automation, invoices and documents are accurately categorized and easily accessible, reducing the time and stress of preparation for an audit. Automated workflows ensure that all necessary approvals and documentation are in place before payments are made, reducing the likelihood of fraud or non-compliance. Finally, automating AP streamlines the process and creates a more organized and efficient system, ultimately improving audit readiness.
10. Decreases Payment Processing Time
Did you know that it takes around five minutes to process a single invoice manually? Automation speeds up invoice processing, resulting in faster payment turnaround time for vendors and improved efficiency and productivity within the organization.
Manual entry and reconciliation of invoices can be a time-consuming task, but by using AP automation you can greatly decrease the time it takes to process payments, because invoices can be uploaded and matched to corresponding documents in just a few clicks. Additional benefit is that it also streamlines communication between parties, allowing for faster approval and payment processing.
11. Reduces Paper Usage and Storage Costs
How many unnecessary papers do you have laying on your desk right now? Paper invoices and documents can be eliminated with automation, leading to cost savings and increased environmental sustainability efforts.
If you automate the AP process, you can greatly reduce the need for paper usage and storage. Digitizing AP can streamline workflows and eliminate the risk of lost or misplaced paperwork. You can keep all your files well organized and at your fingertips with a smart document management system. By moving to digital invoicing, approvals, and payments, companies no longer need to print and file physical documents. This not only saves on paper costs, but also frees up valuable storage space that can be used for other purposes.
12. Improves Compliance with Tax Laws
AP automation streamlines the invoice and payment process, allowing for more accurate record keeping. This not only improves a company’s overall financial organization, but also ensures compliance with tax laws.
With automated AP, businesses can easily track their spending and necessary document information for tax filings. Automated systems can flag any potential red flags or discrepancies in invoices, preventing any accidental non-compliance with tax laws.
13. Enhances Scalability
As a business grows, AP automation can easily accommodate additional vendors and invoice volume without strain on resources or manpower.
Implementing AP automation allows you to scale your operations without having to hire additional staff or spend more time on manual processes. With automated invoice processing, your business can handle a larger volume of invoices and make timely payments without increasing resources. This not only saves time and money, but also improves efficiency and accuracy in managing accounts payable. AP automation often includes integrated reporting capabilities, giving businesses the ability to track financial data and make informed decisions about scaling their operations.
14. Reduces Manual Data Entry Workloads
Employees no longer have to spend time manually entering invoice information and navigating through countless spreadsheets! Freeing up their time for other tasks or projects within the company can only contribute to productivity.
In fact, AP automation reduces manual data entry workloads and instead, invoices and other documents can be scanned and uploaded into the system, where they can be easily accessed and processed. Other features are available too, like automatic matching of invoices to purchase orders and electronic payments. It saves time, but also reduces potential errors that can occur during manual data entry.
15. Increases Employee Satisfaction
Elimination of manual tasks will certainly improve job satisfaction and morale among employees of your accounts payable department. And employee satisfaction is the most important, right?
With manual tasks eliminated, employees have more time to focus on strategic, value-added work. This not only benefits the company as a whole, but also allows individual employees to feel a sense of personal growth. Additionally, automating tedious tasks reduces errors and stress for employees, further contributing to their overall satisfaction at work. Implementing AP automation will give you happier, more productive employees.
16. Makes Your Work Easier
Finally, the ultimate goal of automation is to serve you and make your business processes as streamlined as possible.
If you’re interested in learning more about how AP automation technology can help you speed up your AP workflows, check out our features page where we dive deep into all things DOKKA.