9 Definite Rewards of Automated Accounts Payable Workflow
9 DEFINITE REWARDS OF AUTOMATED ACCOUNTS PAYABLE WORKFLOW
We figured you'd be interested in learning about a new way to reduce late payments, invoice approval delays, and unreliable, outmoded processes. Allow us to illustrate the advantages and steps required to turn your dream of automating your accounts payable workflow into a fact.
Before getting into the automated workflow of accounts payable, let's illustrate what is classical and manual workflow of accounts payable.
People get directly involved in the whole accounts payable process of collecting invoices and making payments in a manual AP workflow. Receiving paper invoices, typing the invoice data into an electronic system, and delivering the paper invoices to business leaders for approval. The AP Accountants from the AP department then chases down the required signatures, cuts paper checks, and sends payments to vendors and suppliers once they've been accepted.
We are also listing out the limitations of this traditional workflow of AP.
Hundreds of thousands of invoices are frequently processed each month by businesses, and keeping track of all the paper invoices can be quite challenging. Invoice errors are common with paper-based systems. They are often overlooked, resulting in invoices being submitted for incorrect quantities. Fraudsters can steal money from businesses by stealing details from paper invoices.
And now, our Calman Analytics will explain to you the all-new Accounts Payable Automation Workflow in detail.
ACCOUNTS PAYABLE AUTOMATION WORKFLOW
At the start, we wish to make it short and crisp. Here it goes,
In Accounts Payable, When the invoice is received, the workflow begins. It winds up when the payment is received.
Usually, By using optical character recognition technology, AP automation technology transforms paper documents into digital format. The technology automatically saves invoice data in an electronic digital file that your finance team can access and scan.
The system double-checks that the information on the invoices matches the information on the bills payable and sales receipt. Exceptions are caught quicker and more accurately by automated workflows than by a manual search with human eyes.
If the system recognizes errors, the document is flagged as an "exception" and sent to a human for review.
Exceptions are electronically routed to individuals and business units based on rules established in the AP software to be resolved. You don't have to give people paper or chase them down with phone calls and emails any longer. All of this is handled by the app. Disputes and exceptions are resolved more quickly. Collaboration between different corporate departments and vendors increases.
Invoices are electronically entered into the company's accounting and enterprise resource planning (ERP) systems until they have been authorized. Payments are then submitted either electronically or by paper check.
Your finance team will also use a centralized financial dashboard as part of this operation. They can check the status of invoices and payments, get more information, and make faster payments there.
There's more to come. Business leaders can also track employee performance more efficiently, detect process bottlenecks, and manage workloads across several organizational locations.
And now, accomplishing the main topic of the article, bringing the theme of the benefits of the automated accounts payable workflow. We explain to you the 9 benefits as merits of automating accounts payable.
MERIT 1: LESSENING THE SEVERITY OF FRAUDSTERS
This scenario may play out in the Finance department. Vendor X sends an invoice to the Finance team. However, no one notices Vendor X isn't a valid vendor(fake) during your manual AP workflow phase. Your company pays the invoice and then loses track of the funds.
It's much more likely that the automated system will detect the fraudulent vendor, and you won't be able to make the payment. What exactly does this imply? Simply put, AP automation workflows contribute to the prevention of fraud.
MERIT 2: ON TIME PAYMENTS ACHIEVED
Here's an example of a situation you may be familiar with: Many manual systems are also subject to errors and disorganized procedures, such as delayed invoices. As a result, payments are irregular or completely skipped. This isn't good news but here comes the actual good news.
Automated systems reduce errors and increase the number of checks and balances in the process. As a result, you're less likely to skip payments.
MERIT 3: AVOID PAYMENT OVERDUE PENALTIES
When you pay vendors late, you'll almost always have to pay a tax. However, for automatic workflows, this is unlikely to happen because the system keeps you informed about the status of invoices and payments. If a deadline is approaching, the device will notify you in advance.
MERIT 4: ACCOUNTS ARE RATIONALIZED
Of course, you don't want to waste time looking for littered documents. You'd probably like to manage your financial transactions with a variety of apps.
An integrated AP workflow that centralizes your invoice and payment information into a single, well-organized database would make your job much easier. You'll be able to monitor the status of invoice approvals and payments more quickly than you do with a manual, paper-based system.
MERIT 5: EXTERMINATE DATA ENTRY
Your finance team would feel more fulfilled and bring more value if they can concentrate on strategic projects instead of typing in invoice data. They'll have a lot of time for value-added work if you automate the AP workflows.
MERIT 6: BOOST EMPLOYEE PROFESSIONAL SPIRIT
Your finance department will no longer have to spend endless hours sorting different pieces of paper from across the workplace, such as checks. They don't have to bother tracking down executives for invoice approvals. Instead, they'll have more time to work on exciting projects that will improve their strategic and advisory abilities.
MERIT 7: ONLINE APPROVALS ARE SAFE AND SECURED
Your automated workflow will alert business leaders when it's time to authorize an invoice regularly. They'll accept them with a single click, giving them more time to focus on more strategic tasks. You'll also have a lot of time to devote to work that adds value.
MERIT 8: PROVOKE & REPORT EASY AUDIT SERIES
Auditors and AP accountants would most likely want to check on the financial team's reports from time to time. When they do, an integrated workflow system would make it easier for them to get the information they need faster.
Moreover, rather than sharing your whole collection of financial statements, the finance team would be able to automatically share the relevant details auditors need.
MERIT 9: MATCH INVOICES TO PURCHASE ORDERS TO SALES RECEIPTS
Consider how much time it will take you to manually review all of the details on an invoice, right from the payable days. Imagine having to do it every day or week with dozens or hundreds of invoices.
You won't have to do that if you use AP automation workflows.
You don't have to do any fact-checking because the machine does that for you.
PROCESS OF AUTOMATING ACCOUNTS PAYABLE WORKFLOW - STEPWISE GUIDE
After Listing its advantages, we would like to explain in steps how to automate the Accounts Payable Workflow.
STEP 1: PLAN YOUR CURRENT ACCOUNTS PAYABLE PROCESSES
You may want to look at your current AP procedures in depth. Determine which ones are the most effective. Make an effort to identify redundant procedures.
Consider the following inquiries: Is it easier for you to handle invoices or payments? payables and receivables? When it comes to typing in invoice details or matching invoice and purchase order data, where do you make the most mistakes?
Determining the phase of the process costs your company the most money. Is it a case of late fees? Or is it anything else entirely?
You'll be able to determine which workflow automation technology will benefit you the most once you've nailed down all of this information.
STEP 2: ADVANCEMENT BUILDING
It will be critical to gain support for your transition to automated workflows. Inquire about the finance department's AP workflows. Find out which ones cost the most money, take the most time, and generate the most problems from them. In the AP method, ask them what issues they need the most help with.
Their suggestions will assist you in making the best automation decision for your business. They'll also feel like they're a part of the solution, making them more likely to embrace the automation transition.
STEP 3: EXAMINE NECESSITIES
Evaluate the AP department’s greatest needs. Evaluate how long it takes to generate an invoice using manual workflows and equate it to an automated method. Calculate how much it costs to manually process an invoice and how much it would cost with AP automation.
Then determine if the company's workflows need to be improved primarily to save money, time, or eliminate errors. You'll be more likely to select the right AP automation solution if you know this.
STEP 4: OWN PRIME SOFTWARE FOR YOUR BUSINESS
Automating AP workflows can be done with a variety of applications. However, before you go out and buy one, you should find out what the most pressing issues are in your business. Then investing in the software is the most effective in resolving those issues.
You might, for example, have recurring issues with inaccuracy in manual comparisons of invoice data to purchase order data to sales receipts. If that's the case, make sure the software you select is capable of three-way matching.
STEP 5: ELIMINATE PAPERWORK
In your AP workflows, it's best to avoid using paper. The fewer errors you make, the less vulnerable you are to fraud, and the simpler and easier your system is to use, the better.
There is less space for error when finance departments abandon paper-based approval procedures. Approvers have direct insight into all invoices and their status in the approvals process thanks to automated invoice approval workflows. Since you don't have any files, you won't lose the invoice. Not to mention that it reduces the time it takes for approval.
Now is a perfect time to see how much automation will help you change your AP to meet your goals in the months ahead.
Consider this: Since the pandemic, improving automation through processes has been a top priority for middle-market companies. Business leaders continue to function more effectively in new ways.
Finance teams like yours have a tremendous opportunity to hit new heights quickly by using innovations like automation.