Accounts Payable Automation streamlines the Accounts Payable Department resulting in reduced manual processes and improved operational efficiency while reducing the overall cost associated with the department. There are two processes and two transformations that can occur. One is much easier than the other to implement.
First: to help you understand Accounts Payable automation, let's look at the two unique processes that can be automated:
Payment Automation is automating the payment disbursements for invoices, bills and expenses. By automating payments, you eliminate all of the paper that your department CREATES resulting in:
- Faster process & no bottlenecks
- Digital payments not paper payments - but when checks are still required, they can be issued
- Supplier onboarding to your digital payment program
- Secure, digital trail for SOX and internal audit compliance
- Staff has more time to focus on strategic financial reporting
- Up to 90% lower cost
- If a virtual card program is employed, your A/P department becomes a revenue-generating center not a cost center
Payment automation services may be provided by your bank, by your ERP or by outside SaaS organizations that provide Accounts Payable Automation. If you are a company that utilizes in diversified banking strategy, then enlisting the support of Payment Automation platform through a FinTech organization allows you to maintain one process regardless of the number of banks or bank accounts.
On-boarding for Payment Automation can be done in a matter of weeks if the right platform and partner are selected and can immediately make a tremendous impact on your bottom-line by reducing costs and generating new revenue from your rebates in month one of the program.
Automating the incoming paper such as vendor and supplier invoices that are paid via the accounts payable department is also part of the Accounts Payable transformation process. By eliminating the incoming paper invoices, you will eventually transform your department into one of the most optimized departments in your organization with:
- Faster processes and reduced bottlenecks
- Automated, electronic workflows and approvals
- A reduced footprint for the department
- Better internal audit compliance
- Staff free to focus on more financial reporting not paper pushing
Invoice Automation is done by SaaS companies that may handle your incoming invoices for you, allow you to forward them or may provide you with scanners to capture the invoices with your department. The process is done via OCR or image capture. Transforming invoice automation usually requires a big budget; Upfront Capital expenditure is usually required. It is also harder to implement. Managing the implementation to transform invoices may take months or more to complete. Once up and running, the implementation may not be over as the change may result in months'-longer of struggling with image recognition and corrections within the system until it learns your vendors and their invoices.
A surprising number of company leaders believe that automating invoices should come first when transforming the accounts payable department. While removing paper-based processes for routing and approving invoices is very important, doing so is typically a very lengthy and time consuming process. Alternatively, automating the paper that is CREATED within this department (check payments) makes a huge impact which can later fund the electronic invoice project.
Begin your Accounts Payable Automation process by automating your payments first. It's easy to manage, makes a tremendous impact and can turn your Accounts Payable cost center into a revenue generator that funds the rest of the process.
All in all, Accounts Payable Automation will help you work smarter and more efficiently.
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