Put simply Accounts Payable, or AP, is money owed by a company to its suppliers. AP automation enables companies to electronically process supplier invoices with little or no human touch.
AP automation software makes this possible by providing a digital workflow that manages the steps previously handled by AP staff members.
Accounting and expenses are often stuck using outdated processes and tools that require a lot of human intervention and man-hours. For example, in Accounts Payable, from purchase orders, to supplier invoices, to approvals and accounting, there are so many touchpoints that are still done manually. This results in long-winded processes and can lead to unhappy suppliers.
The past 5 years has seen a sharp rise in the desire to comply with digital transformation and automation. You can no longer do today’s job with yesterday’s tools. Businesses want to become smarter, more efficient and more productive. They want to keep up with competitors while keeping their employees happy.
Accounts Payable is a rich hunting ground for upgrading processes. Implementing AP automation software opens the door to many time and cost savings as well as streamlining your business’s financial processes.
How to Automate the AP Process
The most crucial part of automating the Accounts Payable process is investing in dedicated software that suits your business. You will then be equipped with the appropriate tools to eliminate the manual aspects of the process and automate them instead.
AP automation software lets you submit and approve invoices digitally, avoiding the need to use paper and in-trays. Often, but depending on the software, an electronic copy of the invoice will be stored in the Cloud after it has been processed, making it easy to reference old documents when required. AP automation solutions can also utilise machine learning technology to become more efficient over time, gradually reducing the amount of human input required.
Solutions like X3CloudDocs will read the invoices as they come in, via email for example, and extract the relevant information which means no data entry for anyone in the Finance Department – great news! X3CloudDocs will spend the first month or so verifying and improving on existing knowledge until it is able to recognise enough information to reduce manual entry by up to 90%.
4 Reasons to Automate the AP Process in 2021
1. Cash Management
The COVID-19 pandemic has stretched businesses to their limits bringing with it an abundance of uncertainties. This recession has reminded CFOs of the importance of cash. Implementing AP automation software provides reliable forecasts of future cash demands. Data is always up to date meaning CFOs are able to make smarter financial decisions.
Reducing or eliminating large amounts of cash being tied up in inefficient back-office functions not only promotes business continuity and profitability, but it also gives businesses access to early settlement discounts from suppliers. Making every penny count has never been more important.
2. The Environment
Did you know that on average over 2 million trees are felled every day for global paper consumption? When you consider that one tree takes around 9 years to grow and the average office uses at least 1 tree’s worth of paper each year we are consuming paper at an unsustainable rate.
Going paperless (and also touchless!) has many benefits. Perhaps the most meaningful one today is the reduction in negative impact that humans have on the planet. Making this small change, which simultaneously benefits Finance Departments, enables businesses to take the first steps to limiting paper usage and preserving the planet.
AP invoice automation supports more efficient and more effective financial processes. This is particularly true when you look at the rapid rise in the number of employees worldwide working from home. With a paperless, Cloud-based system there is no requirement for Finance employees to be in the office to carry out their job effectively. All of the work can be done remotely without the need to physically handle any documentation.
Using one united software solution within an organisation means you can say goodbye to long email chains and chasing for approvals. Most AP automation software, including X3CloudDocs, will give users visibility of each item in the workflow, send automatic reminders when action is required, and store a copy of all documents in the Cloud. Finance employees are able to reduce their manual entry times by significant proportions using this process.
4. Employee Satisfaction
Some reports say that about 25% of Finance staff are unhappy in their jobs, as they feel that they are spending too long on labour-intensive manual input. In general, Finance professionals would prefer to spend more time analysing, interpreting and presenting results which, after all, is what they spent many years training to do, rather than inputting journals and invoices.
Implementing an AP automation solution removes a significant amount of manual data entry from the desks of the Finance team. Manual input is reduced by up to 90% in the case of X3CloudDocs. The extra time can be used to perform tasks that will, for instance, improve internal reporting and relationships, both externally with suppliers and customers, and internally between departments and sites. This makes employees feel like more valuable members of the workforce who also then feel more fulfilled and appreciative of the potential career progression that comes with increased responsibility. A win-win!
You can read more about why employees are your biggest asset here.
If your business uses Sage X3, enquire about X3CloudDocs today for your perfect AP automation solution.