Every business needs to minimise their time-consuming busywork to spend more time executing their business strategy. They need to adopt effective technology to do this.
Businesses will begin saving more time and mitigating human error after automating the more unskilled processes of their operations. Every company owned a process responsible for managing and mitigating human error named accounts payable.
Automating at least these processes can benefit these businesses very well. Integrating automated invoice processing software helped them reduce processing time, reduce invoice processing errors, increase employee productivity and many more.
Here are some simple and effective ways for accounts payable automation to save time and money.
What is an Accounts Payable Process?
Categorising any amount owed by a company is known as accounts payable. They are indicated as current liabilities.
However, accounts payable is responsible for managing every debt, whether purchasing inventory from a vendor on credit or paying outstanding bills for fixed costs. Nowadays, every company is using accounts payable to track and complete expenses of these categories;
- Vendor payments
- Reducing costs
- Travel expenses
- Internal finance
Here is the process of accounts payable.
- The invoice received:- The accounts payable process begins with receiving the unpaid invoices. It may be accepted as a piece of paper or electronically.
- Review:- Now, the received invoices will be reviewed by the accounts payable team. They will be checking for vendor identification, itemised purchases and dates of payments.
- Invoice approval:- The accounts payable department managers will approve the purchase. Depending on the policies, pre-approval invoices are acceptable for certain assets.
- Record:- Next, the expenses will get recorded in the files with a proper invoice.
- Payment:- An electronic payment or paper check will sent by accounts payable with proper authorization and recording.
What does Accounts Payable Automation mean?
It means finding an effective technology to perform tedious manual data entry work in a company. As there is a lot of repetitive validation and data gathering involved in the accounts payable process, automating it will save a lot of time and money.
Automation may involve streamlining the purchase orders using smart cards or SAAS subscriptions. Whether a well-established business or a new website accounts payable automation is beneficial for everyone by promoting expense management.
Keep reading the article to explore how to automate accounts payable.
6 Ways to Automate Accounts Payable
Sometimes business owners are tempted to apply automation at every point of the accounts payable process. But they must carefully assess their needs for better success. Below are the six main points that every business needs to automate to make a positive impact.
1.Move ahead to the e-invoicing
As mentioned above, receiving invoices is the first step in an accounts payable process. It is one of the critical steps, and a minor issue can plague the entire workflow. Therefore, the first approach is to make the shift to e-invoicing.
Every business needs to begin processing all invoices electronically. It will not only help them to cut down on the amount of paper clutter, but it will also prevent losing vital documents.
2.Move seamlessly with approvals
As responsibilities in the approval process change hands, it can create significant snags and points of errors. But automating the approval process can seamlessly route each invoice to the concerned parties.
3.Get rid of data entry
Manual data entry is one of the time-consuming works in any business. That is why automation in data entry can be important stuff.
Data entry is an automated step that can prove helpful long after the other stages of the accounts payable process completed once the payment made.
Therefore, businesses can facilitate future analysis or investigation by automating the data capture and storing it in an intelligent, accessible spreadsheet or CSV file.
4.Automate complex coding
Accounts payable also go through a General ledger coding known as a classification process. The GL coding helps identify a broad range of values for each invoice. But still, it is one of the exhaustive processes.
However, GL coding will grow exponentially if the business is larger and more invoices received. In this case, the task becomes massive for an accounting team to complete manually and opens a window for error.
Therefore, this complex coding needs to automated through specific rules and identification. It is necessary to apply GL coding automatically on each essential data point.
As a result, everything will be classified and ready to go when assembling data for taxes.
Wrapping up
We hope the ways shown in the article will help businesses automate their accounts payable process. However, it may seem like a massive undertaking. But still, it is not hard to make the switch due to its cost-effective nature of accounts payable automation.