On the surface, the process of an Accounts Payable (AP) department seems simple enough: invoices come in from suppliers and the AP department makes sure they’re approved, processed, paid, and documented in financial records. Unfortunately, there are two main factors that often over complicate this process - resulting in a mess of inefficiencies that weigh down the organization’s bottom line: Paper and Manual Accounts Payable Processes.
The reality of many AP departments is they’re still dealing with paper. Lots of paper. According to PayStream Advisors’ Invoice and Workflow Automation Survey, 55% of organizations are still conducting more than 80% of their invoice processing on paper. This can lead to:
- Invoices being unprocessed and backlogged
- Human error during data entry
- Invoice duplicates
- Inconsistent audit controls
- Poor decision-making
- Missed discounts
- Late payment fees
- Double payments
- False invoices
The solution is simple: Eliminate Paper and Invest in Accounts Payable Automation.
Although automating this process may seem like an intimidating task, the benefits will lighten the burden on your bottom line and increase ROI.
Here are 7 reasons to automate your accounts payable process:
1. Oversight and ControlMinimizing the amount of paper that comes through the system starts the moment it arrives. With an automated system, invoices are scanned or emailed - not manually input - into the system once they are received. Once entered, the system can track the invoices throughout the entire process from arrival to the moment they’re paid. This allows for greater oversight of the process and improved integration between the AP process and the ECM system.
2. Boost ProductivityWithout an automated process, AP departments waste a colossal amount of time filing, faxing, emailing, retrieving, copying, and looking for paper that has been misplaced or lost. Afterwards, they spend even more time manually imputing the information from paper invoices into the system. More paper equals more time lost on procedures rather than productive work.
Having an automated AP process eliminates these issues by automating the input, tracking, record keeping, and pushing invoices through the approval process. All invoices are sent electrically across departments and the system allows for alerts to be enabled so that invoices are never ignored. Time previously spent dealing with paper becomes available for more important work.
3. Reduce CostsThe time saved through automation also equals more money in your pocket. No longer do you have to pay for people to work on mundane tasks that take up more time than the benefits produced.
4. Improve QualityErrors can be costly to productivity and an organization’s reputation. Unfortunately, people are error prone and inefficient systems only increase the odds of errors occurring. By automating the invoice entry, you eliminate the chance for information to be input incorrectly.
5. Enhanced ComplianceWhenever accounting is involved there are usually some form of government regulations that come with it. For example: Sarbanes-Oxley in the United States, Bill 198 in Canada, J-SOX in Japan, etc. Having the ability to track and report on your AP processes keeps you safe from lawsuits, fines, and other legal penalties. The nightmare of keeping tabs and records on invoices through a manual accounts payable process becomes easier than ever once that process in automated.
6. Go Green - Eliminate PaperGoing green is not only a benefit to the environment, but will also save your company time and money. Plus, going green can be a big boost to your organizations’ reputation.
7. Greater Return on Investment
Reducing the cost of your accounts payable process through automation unleashes revenue to be used elsewhere in the organization. As time goes on, the savings continue having a significant, positive impact on your bottom line.