Everything You Need to Know About Accounts Payable (AP) Automation

Automation

The concept of AP automation is simple: take the slow, repetitive tasks or processes that waste energy and hours and let smart software work on them. When this happens in accounting or for accounts payable, it’s called accounts payable automation. From supplier invoices to purchase orders, approvals, and accounting, accounts payable have many things that can be automated. In this article, we’ll briefly look at accounts payable automation, what it is, why, and how.

What Is Accounts Payable Automation? 

Accounts payable automation (or AP automation) are tools that eliminate the manual aspects of a business’s accounts payable, making them digital and automatic. This helps move accounts payable processes faster, reduce accounts payable errors, and maximize efficiency. It removes manual tasks while allowing time for other important activities in finance and around the company. The critical accounts payable areas that many businesses automate are:

  • Supplier invoices  
  • Purchase orders 
  • Approvals 
  • General accounting 
  • Vendor management and record-keeping

Why Undertake Accounts Payable Automation?

The key benefits of Accounts Payable automation are:

  • Digitizes accounting documents by default: It removes paper filing and giant storage rooms, replacing them with digital documentation and record-keeping. This allows for easy access and retrieval of the documents. 
  • Saves time: When accounts payable is automated, what was previously repetitive or slow is made almost instantly. The time you’d have spent checking purchase orders can be used in doing other important business activities. 
  • Fewer accounting errors: Humans can make mistakes with manual tasks. On the other hand, computer programs have reduced errors. This increases efficiency in accounting. 
  • Increases productivity: The only logical benefit of saving time and reducing errors is improved productivity. Teams become more productive when they do well, do things on time, and work without errors. 
  • Makes accounts payable accessible from anywhere: With AP automation, documents are in the cloud, and you can access them from anywhere.
  • Gives teams autonomy: A quality AP automation tool can make AP accessible to everyone, not just finance, but with limits. This allows other teams to confidently file AP documents like purchase orders efficiently and with autonomy. 

What to Consider in Accounts Payable Automation Software

When shopping for AP automation software, you can look for a tool that provides:

1. Seamless Integrations

How can it integrate with your other software like ERP and accounts documents? This compatibility and integration should be simple to give you easy data transfer from one side to another. 

2. Self-Serve Portals

In a business, vendor relationships are as meaningful as customer relationships. AP software with self-server portals designated for vendors can enable your suppliers to track their invoice payments, view payment history, and check your products’ inventory levels to know when to supply. 

3. Intuitive, Easy Interface

Even the construction tool is useless if nobody knows how to use it. The AP tool you choose should have an intuitive interface and easy-to-use features for everyone.

4. Customization

Can you customize the tool for your organization’s specific use? If that’s not possible, go for another tool. The tool should allow you to pick and choose settings that serve your organization’s interests. 

5. Automated Reporting

Automated reporting gives you visibility into your AP processes, such as invoice status and history, which helps uncover ways to improve your accounts payable workflow automation. For example, the report may highlight that you consistently pay a vendor on time instead of early, making you miss out on early payment discounts.

Endnote

Slow, manual accounting processes should not form part of your business at this age. Account payable solutions can make your team productive and improve your accounting efficiency. You only need first to understand what you’re looking for and settle for one that saves your business needs.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.