The AP department does much more than pay bills. When efficiently managed, AP processes can improve the bottom line by eliminating bottlenecks.
Everywhere we look, digitization is all around us. For companies that have yet to deploy AP automation, bottlenecks within AP processes are a common occurrence. Bottlenecks are more often than not a result of human error. AP automation minimizes the need for employees to be involved in receiving and processing invoices.
There is a large amount of time and money invested into processing large volumes of invoices. This time and money could be put to better use with AP automation. And while sending an invoice to the AP department may seem simple and minimal in terms of labour and time, there’s actually much more involved. The invoice has to be uploaded to the company’s accounting system and then verified and matched with its corresponding PO. From here, it is sent to the appropriate entity for approval. Once approval has been obtained, it comes back to the AP department, where a payment can be applied.
There are many forms of payment options, and vendor preferences dictate which one to use. For example: Some suppliers may prefer to be paid via cheque, while others accept online payments only. When you’re dealing with hundreds or thousands of suppliers and you don’t have AP automation, keeping up with all of their payment preferences can be a headache. Not knowing which payment method is preferred by a particular vendor is a bottleneck in itself. It slows down invoice processing and delays payments.
Other bottlenecks that occur within AP invoice entry and processing include:
• Missing information, like payee’s tax ID information;
• Invoices in unreadable formats;
• Invoices requiring additional information in order to manage statutory compliances;
• Invoices arriving from payees in multiple currencies.
All of these bottlenecks are easily eliminated with AP automation. Your suppliers will enjoy a pleasant onboarding experience, and the automation service provider will take care of everything. From securing invoice and payment approvals to checking accounts for sufficient funds and making sure all suppliers are paid according to their preferred payment method, you don’t have to worry about any of the related tasks. You also don’t have to log into individual banking portals to reconcile payments. Switching back and forth from one financial system to the next to locate invoice data is a thing of the past with AP automation. You don’t even have to think about which payments are due. You’ll receive helpful alerts when invoices are nearing due dates and aren’t set up on automatic payments. For those that are set for auto-pay, you’ll receive notification once a payment has been applied.
Accounts payable automation automatically captures details from invoices. Whether it’s a docx., XML, PDF, or .jpg file, your AP department doesn’t have to go through the tedious and time-consuming task of manually entering information. AP automation eliminates this bottleneck while reducing the occurrence of human error and streamlining the accounts payable workflow.
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