Automation in accounts payable can bring many advantages to a business. The biggest advantage perhaps is that AP automation can be a great cost-saving tool. Not only can AP automation save costs in the accounts payable process of a business but can help businesses become more efficient, improve their relationships with their suppliers, and help grow their revenues. For example, an end-to-end invoice automation software like IQinvoice can provide businesses with a cost-effective solution, https://iqinvoice.com/features.
While some businesses think of accounts payable automation as a mammoth task, the process is very easy to automate. Here are 3 actionable steps to automate your AP operations.
Capture and Extract Data
For the accounts payable process to be centralized, it is important that the data coming from different sources, into the system, should be organized. This data can come from within the organization or from external sources, for instance, invoices from the suppliers of the business or tax-related information, etc. If all types of data that come into the accounts payable process of a business are not organized, it can be difficult to automate the process. Therefore, the capturing system should be able to capture data from all sources and in all forms. During this process, the system should also be able to prevent any human errors, such as duplications or mathematical errors.
Once the data is captured, the system should also be able to identify and extract any useful information from the captured data. Furthermore, any data that is captured, should be indexed for better tracking. The indexation should be done in accordance with the coding systems of the business for easier integration within the system later.
Any previous paper-based data should also be digitalized and entered into the system. If an automated accounts payable process relies on both paper-based data and automated data, then the automation is not effective.
Process and Store Data
Once the data has been captured and any relevant information has been extracted from the captured data, it should be processed. The goal of this step should be to automate tasks within the business. The effectiveness of this step will highly depend on the capture and extraction process. If there is a failure within those steps, then the processing of data will also fail.
For this step, any data that is extracted from the captured input should be identified. The accounts payable department should check the captured data manually and classify it into different categories based on where the data generated from and what it relates to. They should also verify other characteristics of the data and prevent any unauthorized data from entering the system. This will generally include a check regarding the origin of the data, the value of the item, the person who approved it, and when they approved it.
While the manual check-in this process may be considered a bottleneck, it is still a good idea to have personnel check it for any possible errors. Once the data is processed, the system should store the data. This storage system should be safe and only authorized personnel should be given access to modify data within it. If implemented properly, the storage system, along with the capturing system should fully eliminate the need for paper-based accounts payable process.
Integrate with other systems
Once the accounts payable system goes through the above two steps, it is crucial to integrate the automated system with other systems of the business. The information from the accounts payable process can go through many departments in a business. Furthermore, the accounts payable process will also need some information from other departments of the business to operate smoothly. Without proper integration of the accounts payable process within the business, the automation in accounts payable cannot be effective.
Integrating the accounts payable process within the business will mainly include integrating it with the ERP system of the business. This is so that the system can automatically fetch any data from the ERP system and send data to it whenever needed. This can save a lot of time in different processes of the business as these processes will cut any time that is wasted in requesting information from one department of the business to the other. This integration should also cut the need for any paper-based data. A complete list of ERP integrations that IQInvoice supports can be found at https://iqinvoice.com/integrations/.
Automation in the accounts payable process of a business can have many advantages for a business. The automation can be achieved in a 3-step process. The process should start with capturing data and extracting any relevant information. Once the information is extracted, it should be processed by the system for later use. Once the processing of the extracted information is complete, it should be stored within the system. Finally, the system should be integrated with other systems of the business to ensure the automation is effective.