What is AP Automation?
AP Automation (Account payable automation) is the utilization of specialized software to automate and streamline account payable processes. This eliminates manual paper-led A/P processes ensuring a faster, secure, and cost-effective approach solution to handling one of the most fundamentals processes that a business engages in… Paying the bills.
Why should you opt for AP Automation?
An organization that opts for AP automation experiences benefits such as:
- Controlling costs and eliminating unnecessary spending on items such as check and invoice processing fees.
- Enhancing policy adherence
- Improve vendor/supplier relationships
- Facilitating better decision making by having better insights into your company’s spend
- Reduction of errors associated with manual data entry such as duplications & mis-keys
- Makes it easy to attract and retain top AP talent(employees will find their jobs easier to execute)
In a fast-paced business world, companies that upgrade and embrace novel ways of business are more likely to compete and grow effectively. Investing in an upgraded automated system is one sure way towards this objective and is something that an organization cannot overlook.
Moreover, if you calculate the cost of automation compared to the cost of the manual process, the return on investment is obvious.
Picture this: According to the Institute of Finance Management(IOFM), the cost of manually processing a single vendor invoice is between $10 to $23 per invoice.
On the other hand, by AP automation, the cost of invoice processing reduces by 80% (we think you can get an all-in price per automated invoices as low as in the $1.50 range)!
Consider this savings with the number of invoices you process in a week, a quarter, or a year.
Software rarely provides actual measurable and realized savings, except here with A/P Automation.
Given the advantages, the real question is, “why have you not embraced it?”
Who needs AP automation?
Automation should not be synonymous with a large organization with deep pockets. On the converse, every organization ranging from a Grocery store, Restaurants, startups, to multinational corporations will derive benefits.
It all boils down to designing a solution that meets an organization’s needs.
Ultimately, AP automation benefits everyone in an organization.
- CFOs get better clarity on spending enabling them to see new opportunities for growth while spending every dollar effectively.
- CIOs and I.T leaders are better positioned to plan and create better and secure tech environments in compliance with the U.S data privacy regulations.
- AP managers and controllers get a holistic view of employer and vendor spending enabling them to draft better policies to better contain spend.
- CEOs and business owners are empowered to run a modern and cost-effective organization that is primed for future growth. It also goes without saying that they derive satisfaction with the knowledge that they have facilitated an AP utopia that has made employees perform better.
- Clerks themselves are more productive and are able to focus on value-added tasks versus solely processing and paying bills
When do you see a return on your investment?
Tangible results are realized once an organization has fully committed to their investment in A/P Automation and are then consolidating spend management in a single, integrated, and easy to use solution. Once your organization is fully on-board, it is simple to calculate anticipated return on investment (ROI can be calculated even before you begin your project.
See our post on ‘Calculating Your Accounts Payables Costs’ here.
A suitable AP process needs to:
- Accurately capture data from scanned/emailed forms via Optical Character Recognition (OCR).
- Has a provision for integrating artificial intelligence & machine learning at a later date.
- Provides a detailed view of spending via dashboards, reports, and other important accounts payable-related metrics.
- Has the ability to pinpoint the status of any invoice in the approval chain (current or historical).
- Comes with a mobile solution supporting both iOS and Android, particularly for invoice approvers.
- Tight 2-way integration with your Accounting / ERP system for pushing/pulling records.
- The ability to process payments within the application using p-cards, outsourced check process & other electronic payment methods.
- Permits your AP team to route invoices for approval based on custom rules, process, and customs guidelines.
- Facilitates integration with existing systems already in place (expense reporting, accounting / ERP, inventory, requisitions, purchase orders, etc.).
- Comes with a vendor portal for questions and ease of access to invoice status.
- Provides an electronic document warehouse to store all vendor invoices in a single place (eliminating lost invoices).
A/P Automation software introduces efficiency in almost every organization & is one of the few software applications that provide an actual measurable return on investment.
Compute your current manual payables process, receive a quote on automation & it won’t be hard to understand why A/P Automation is one of the hottest software markets there is.
That said, there are 100+ A/P Automation solutions in the marketplace. Use Solugence to identify your requirements & then instantly view which software fits your organization best.