The Benefits of AP Automation Software for Your Management Team
As a manager, you know better than anyone that time is money, efficiency is the name of the game, and all those other clichés about digitizing being the wave of the future. So why is your team still handling accounts payable with the same old paper-heavy processes?
You’ve probably heard of AP automation software, but you might not be sure how it can help you, your team, and your business. The truth is, automation provides myriad benefits throughout the command chain. From improving workflow efficiency on the ground floor to providing high-level insight with real-time data for executives, automation is one of the most effective ways to save your business time, space, and most importantly, money.
As a decision-maker, it also provides you with key advantages that will allow you to do better business, both internally and externally, in the short-term and the long.
Minimize Low Value and Error-Prone Tasks
One of the biggest issues with manual processing is that no matter who is doing the work, it still requires a significant amount of human and financial resources.
For instance, despite the fact that tasks like receiving, routing, reviewing, and entering invoices are low-value and time-intensive, they still cost you the same in employee wages as those that are higher value—and that doesn’t even take into consideration the amount of time it takes to find and rectify costly mistakes.
For managers, it takes constant monitoring to make sure invoices are processed on time and in an organized fashion in order to take advantage of early payment discounts, avoid late payment fees, and ensure efficient data retrieval for audits or otherwise, meaning the loss of time and its expenditure on low-value tasks affects both those having to do the work and those having to double check it.
By contrast, adopting AP automation massively reduces low-value, error-prone repetitive manual tasks. Not only does this make more time for value-added work, but it decreases the necessity for oversight from management, freeing up managers to focus on the big picture.
Gain Valuable Insight
While reducing the need for oversight is a considerable advantage to begin with, automation also provides another significant managerial benefit: process transparency.
Because AP automation digitizes invoices as soon as they are received, managers are able to track every one from the time they come through the door to after they are paid. That means managers will also be better able to plan for financial expenditures earlier in the process. They will also be able to diagnose AP process issues as they happen—no more waiting weeks or months to solve problems that could cost serious money.
AP automation software dashboards provide comprehensive, up-to-the-minute data that detail the health of a company’s AP process from start to finish. At a quick glance, you can determine what invoices are due when, where snags occur, how quickly exceptions are handled, and easily discover any spikes or ebbs in volume, allowing you to minimize or even eliminate workflow interruptions or errors.
Beyond the process itself, you also gain access to real-time analytics that are virtually impossible to glean from manual processes. Through the use of the software’s dashboard, managers can analyze key metrics such as:
- Upcoming payables
- Invoice volume
- Time needed to process each invoice
- Early payment discounts received and missed
- Late payment penalties assessed
Given how these insights can affect overall timing, cash flow, and resource allocation, it’s easy to see how they can also become an invaluable tool for company growth.
Add Security and Limit Liability
Two common concerns of accounts payable are weak security and departmental liability—and the financial repercussions of failures in either category are far-reaching. As the department that handles some of the most sensitive financial information, it’s crucial that accounts payable not only maintains security, but also maintains compliance with regulatory standards.
Consider the inconsistencies and issues that standard manual processing workflows pose. From the point of reception, an invoice is shuffled to accounts payable, opened, shuffled again for approval, manually entered into your ERP system for payment, and finally filed. Even the most disciplined departments have room in that process for documents to get lost, sensitive data to be exposed, data entry errors, and inefficiencies in how each step is handled, let alone general inconsistencies in the process posed by employees with different processing workflows.
With AP automation, however, not only is every document tracked every step of its lifecycle and processed consistently but is also digitally stored securely for instant retrieval at a moment’s notice. That means no matter how sensitive the data, no matter when it was received or stored (let alone by whom), its accessibility and security is never under question, making audits, inquiries, and overall compliance requirements much easier to meet.
Promote Success Throughout the Chain
As you can see, there are myriad benefits to AP automation for your management team, but it shouldn’t be overlooked that the high potential for success stems from benefits gained throughout your business structure.
On the ground floor, minimizing manual processes reduces data entry errors, lower-value manual tasks, inconsistencies and inefficiencies, all of which result in getting far more for your money and significantly limiting rework at nearly every stage.
Management not only gains the benefits of reduced resource costs and having more time to work on higher-value tasks, but are also afforded insight that encourages process improvement, better cash flow management, and numerous other tools that promote better alignment with both executives—while also potentially improving workplace relationships both inside and outside the company. After all, what supplier doesn’t want to work with a company that pays on time and never loses paperwork?
To summarize, AP automation may seem like a simple improvement to manual processing, but boasts advantages that extend far beyond efficiency. In the end, it saves time, money, space, and numerous other resources in both the short-term and the long—all of which add up to improved ROI while making your workplace an easier, more streamlined, and pleasant place to do business.