AP (accounts payable) automation is the act of automating the manual processes within the accounts payable life cycle. This includes tasks such as manual data entry, order input, invoice generation and delivery, as well as payment processing.
Automation technology is a fast growing industry and shows no signs of slowing. Gartner, Inc. states that in 2021 the market hyper-automation technology reached $41.6 billion in 2020 and forecasts it will climb to $596.6 billion in 2022.
There are many benefits to automating the AP process. Here are 7 ways it can benefit your company:
- Save Time
One of the greatest things about automating AP is how much time it can save your company. Companies like Softco offer AP automation solutions for your business that can allow manual processes to be streamlined into effective workflows.
For example, approvals can be done immediately, data can be automatically collected, invoices can be generated right away no matter the time of day, and payments can be made on the spot. Activities that can take days or weeks in a manual system are completed right away, saving your company hundreds of man-hours.
- Save Money
It is no surprise that while your company is saving time, it is also saving money. According to a survey by APQC (American Productivity and Quality Center) an invoice processed manually averages around $10 per invoice, while those who use an automated process only average around $2. This equates to 80% savings by switching to an automated process!
Add in the fact that automated data entry reduces errors, improving invoice accuracy, workflow and auditing, it is no surprise why so many companies are looking to automate their processes.
- Improve Accuracy
Manual work is not only time consuming and costly, but it increases the risk for errors. Manual data entry that exists without proper workflow can also make auditing a difficult and time consuming process.
AP software allows you to compare data accuracy with other software you may have such as CRM (Customer Relations Management), ERP (Enterprise Resource Planning) or financial data and reduces the risk of duplicate invoices. No one wants their clients to go through the stress of duplicate payments. AP software will improve customer satisfaction as well.
- Improve Workflow
Automating processes gives you the opportunity to improve your workflow. Your employees won’t be wasting time on time-consuming manual tasks and can focus on things like customer engagement and satisfaction. In addition, because the data collected will be consistent and accurate, it can also be used to identify potential bottlenecks and areas of weakness, which allows for continual improvements.
Better workflow also allows for smooth collaboration between employees and can help to improve the satisfaction of your workers and increase retention.
- Make Auditing Easier
AP automation can assist with the entire auditing process, making it accurate and stress free. Automated document management allows for documents to be linked to messages, transactions, invoices and receipts ensuring easy accuracy.
Reports can also be generated automatically allowing you to file quarterly reports right away without spending hours verifying your data and sifting through different systems.
- Protect Against Fraud
Unfortunately, with the increase of online services, the risk for fraud is prevalent in everything we do. AP software allows you to assign designated employees to approve payments before their release. Because everything is linked and easy to find, determining that an invoice is fraudulent is much easier. Reducing or eliminating unverified payments saves time, money and reduces stress for you and your employees.
- Improve Data Collection, Preservation and Integration
Though some may see it as a nuisance, data collection is here to stay. Automating this process will save money and make information more accurate. AP software integrates with CRM, ERP and financial databases allowing you to not only ensure accuracy, but use the data in meaningful ways.
When used properly, data can contribute to improving workflows, reducing costs, simplifying auditing processes and protecting against fraud.
AP automation is just one of the financial technologies that is continually rising, and it’s here to stay and for good reason. Investing in this valuable software can change the way your company does business and set you up for future success.