AP automation, short for Accounts Payable Automation, is a method with which you can digitally handle and conduct accounts payable procedures. When compared to conducting these processes manually, automating it can offer a number of benefits.
This has further led to a number of businesses adopting automated methods of paying their invoices. If you are not sure of how AP automation can help your business or how it has revolutionised the industry, this article is an ideal read. Here you will learn everything there is to AP automation, starting from how it functions to its benefits.
How Does AP Automation Work?
AP automation uses a single platform to obtain invoices, process payments and manage approvals for buying organisations automatically. It mainly helps with three components, namely invoice receipt, matching and audit. Each of these components is further explained in detail below.
With AP automation in full stretch, you can convert invoices from paper to electronic media or receive it electronically. Electronic invoicing can lies with methods like EDI or B2B connections, receipt from a supplier portal or PDF invoicing. Basically, any method that allows data to flow electronically. On the other hand, you have to scan paper invoices and process them using QCR or other AI to be able to extract the data and store it in the cloud.
Matching and Workflow
Once you have gathered the data, the invoices are rigorously checked. This involved matching the data to the relevant purchase orders. They can also be directly forwarded to the responsible individual or team for review and approval. Once this is done, the matched receipts are then sent to an accounting system or the ERP for payment.
Store and Audit
These invoices then will be stored along with the audit trails of every action taken on the invoices. This allows the information to be easily accessible for financial audit purposes. Electronic archival also eases the search process and allows you to find invoices from anywhere at any time.
How Can AP Automation Help Your Company?
In addition to cost-saving, reduction of human errors, optimising working capital and better processing, AP automation can be quite a handy tool. There are a number of ways automating your accounts payable processes can help your company before more efficient and productive. Here mentioned are some of the most notable advantages of using such a system.
- Time Savings And Better Accuracy:
AP automation is known to make invoice approval and process a lot more effective and faster. Since the whole procedure is automatic, it omits the requirement of human intervention by a huge margin. This not only helps get more accurate results but also saves your staff the time they’d spend here.
In addition to that, it also reduces payment errors like fraudulent payments. By robotically checking and comparing the invoice data to the ERP information, any duplicate payment will get screened beforehand.
- Enhanced Efficiency And Reduced Costs:
Automation also helps streamline the payment and invoicing process. This further helps significantly reduce approval times and increases productivity by quite a bit. You can also integrate such automated solutions will pre-existing financial systems. This will allow the processes to become more effective, ensuring an unbroken and smooth communication between all systems.
Since all processes are automatic, there is a considerable reduction in labour costs and costs of document postage, production and storage. This saves you a lot of money that can further develop other aspects of the business.
- Pre-Loaded Compliance Rules:
When you automate your AP processes, the system comes with compliance built into it. This allows the process to be completely transparent. In the case of any discrepancy, common mistakes or risks, the user can easily track the fraud and rectify it.
For instance, the system automatically flags suspicious activity, additional charges or duplicate invoices. This can not only make invoice generation more efficient but also saves the company a lot of misplaced money.
Now that you understand how AP automation can help you, it only makes sense if you implement it. You can try choosing reputable services like Monite. They have trusted professionals and offer a lot of novel financial features for your company. You will surely appreciate their service.