Manual process can break the accounts payable system with inaccuracy, lack of control, and erroneous data. Automation can help streamline the process by simplifying every phase in the AP-to-invoice cycle.
The evolution of technology and innovation has had a major impact on the organizational processes and business functions. Of all the business processes, one key function that must be transformed is the accounts payable unit.
AP Department – Need of a Process Overhaul
The evolution of mobility and other innovations have continued to change the day-to-day AP processes. AP units have to deal with the invoice processing and cash management, which requires one to invest a lot of time and energy. Automating the AP processes can deliver both strategic and bottom-line values. Today, the AP transformation revolves around a certain wave of challenges such as increased invoice processing costs, zero visibility into invoice and payment data, and lack of collaboration and integration between the processes.
As organizations want to make the AP Department a strategic unit, there are two main hurdles you have to overcome: 1. Paper-based processes for managing invoices. 2. Lack of visibility due to manual processing.
The old-fashioned method of processing invoices sinks efficiency when other businesses seek to drive value through innovation and technology. Back-office functions need superior visibility to know the cash flow within the organization. Modernizing the accounts payable processes will evolve critical improvements, especially visibility into invoice process and cash flow.
For most enterprises, it is too difficult to get the real visibility they need in the process for real-time insights. Businesses find a reporting and gap analysis that does not allow teams to react to new challenges. The invoice data will not only help in cash forecasting for the AP department, but also will help procurement and other stakeholders that leverage invoice-based intelligence for long-term planning, budgeting, and forecasting. Research has revealed that 43% of organizations do not leverage data to better understand the process. Improved control and reporting capabilities of automation can help transform the way invoice data is collected, analyzed, and leveraged.
Automation Adds Value and Boosts Efficiency
Automation is a life-saver for businesses that decided to automate their AP processes to boost both the efficiency and value of the process. As most businesses would look to transform their accounts payable processes, automation will become a catalyst by improving major aspects of the function, including:
- Automating all the key processes such as receiving invoices, collecting invoice data, and invoice processing without human errors can help businesses move beyond archaic processes. Eliminating the time that AP staff takes to respond to supplier inquiries for invoice and payment status can free up them to focus on value-added activities.
- Minimizing the invoice exception rate.
- Decreasing invoice approval times.
- Timely payments to foster supplier relationships.
Promote AP Strategically
Besides cost reduction, automation can benefit stakeholders by giving them the visibility into the financial systems. Allowing business people to make key decisions can help improve the process, and more particularly, lets you know the in and out of the cash flow.
AP Unit can Benefit Business
With the holistic accounts payable process, the entire unit and other internal functions can benefit from forecasting cash flow in an efficient way.
True Power of AP Automation
The data extracted from the invoices and payments can be transformed into intelligence to align with the procurement functions. From liquidity management to supplier management, AP visibility is paramount for key stakeholders.
Long-Term Plan for Accounts Payable
A truly strategic AP department can deliver long-term value as supplier-vendor relationships strengthen, intelligence to leverage supplier negotiations and a great improvement in staff productivity. Besides reducing invoice processing costs, AP automation can be a quick-fix for long-term business success.
With automation as the key, businesses can eliminate legacy processes and improve the invoice and finance visibility altogether, which will boost the strategic value of the accounts payable function. Businesses have to realize the value of AP automation. By eliminating mundane tasks and emphasizing the value and intelligence that automation can deliver, businesses can transform their AP departments.