Are the paperwork and manual invoice reconciliation tasks dragging down your accounts payable department? Explore the solution to this issue using automation of the accounts payable process.
In every business, accounts payable is a crucial business activity. But in practice, manual accounts payable processes nearly always end in errors or resource waste. Even with the most talented accounts payable specialists, manually entering data, matching numbers line by line, and filing paper papers is outdated and useless.
Additionally, 16% of businesses acknowledge that manual accounts payable procedures might lead to fraud problems.
Let's dive deeper into it and know how your business may benefit from it.
What is Accounts Payable Automation?
Accounts Payable (AP) automation is the use of technology to streamline and automate the workflows and processes for paying bills, thereby removing manual work and enhancing visibility and control over crucial financial data.
Your business is better able to receive payments from creditors on time when the accounts payable (AP) operations have been streamlined. This also makes the payable process more organized and effectively managed. On top of this, 64% of organizations agree that AP approvals are quicker with automation.
10 Best Tips for AP Automation Process
Every AP department needs to concentrate on the ten tips below to guarantee that payments are correct, timely, and fraud-free.
1. Allocate someone on the AP automation task.
Put someone in charge of managing all the software's hidden components. During the software's implementation phase, this individual will oversee the setup process and provide analytical reports on how to enhance it.
The primary point of contact for issues with the accounts payable software will be this manager. He will administer and oversee the entire project as needed in cooperation with the provider, be in charge of automation performance, improve operations, and generally ensure that the full potential of every automation advantage is realized and updated.
Regardless of whether they have direct control over the necessary resources to execute it, the person you choose must be able to guide things in the proper direction. They will have to deal with the streamlining and monitoring difficulties even though they won't have to handle the day-to-day management duties since management will address those.
2. Map out the overall workflow.
Another crucial responsibility is mapping out the company's overarching goals and the complete AP process. It's essential to strive to integrate technology into each operation and list them. The team may find it helpful to map out the entire workflow, including any bottlenecks and end goals, to identify critical areas to automate first. A thorough mapping of the accounts payable process can also be helpful in presentations to win over the accounting staff and executives.
3. Get the AP team on board.
Before implementing the new processes, you must win over everyone in the AP department if you want your AP automation efforts to be successful. However, implementing and using the automation software will be considerably simpler once everyone is on board.
Make sure individuals who the changeover will directly impact are aware of how things will ultimately be made more accessible for them. It could be necessary to arrange one-on-one meetings with them to seek their opinions. Then, as you choose your vendors, consider their suggestions.
Remember that while some may be resistant to altering their accounts payable process, most will welcome anything that would ultimately make their jobs simpler. Be careful to emphasize how switching to automation will speed up everything and enhance accuracy if your business still uses paper invoices or has a longer approval process.
4. Prepare a backup plan.
Businesses nowadays use technology to automate. It is made possible by equipment with a strong track record of dependability, but they will always carry the risk of downtime. Technology for workflow automation is significantly more reliable, yet it might not always function as intended.
There is always a slight chance of server malfunctions or power outages. These errors could occasionally bring your entire system to a complete halt.
It would be best if you had a backup strategy to replace the automation while professionals solve a problem. Unfortunately, when a problem arises, this backup system often involves employees handling the automated tasks.
Have a backup strategy prepared so your company's activities can continue in an emergency.
5. Keep suppliers updated.
Too often, internal discussions for the AP automation project take place, making it simple to overlook vendors and suppliers. However, third-party providers might need to adjust their invoicing process to accommodate the new automation. Alternatively, they might be relieved that the automated AR and AP processes are now compatible. In either case, keeping everyone informed will strengthen vendor relations.
6. Make changes step by step.
It could be tempting to combine everything and automate it all at once after learning everything you can. Yes, it's exciting and could assist the business, but it's wise to wait before implementing it across the board.
Automate in stages since a poor setup may result in more issues than automation can manage. Although slower rollouts result, difficulties along the road can be minimized or even eliminated. In addition, you'll get better at the processes as you learn them, making it easier to automate other processes in the future.
7. Align the automation process with your business goals.
The AP automation software you use should support the efforts of your team and, consequently, your company's goals. It should be in alignment with the organization's vision.
Apply this technology to help you achieve your company goals. Before even beginning the automation, start with careful planning and goal-setting. Determine your goals and how you'll utilize the tool to help you reach them. Are you planning to process 5,000 more invoices, as an example?
Use your goals as a roadmap for using technology moving forward once you have established them.
8. Take metrics seriously.
Once you've decided to automate, you've entered what you could call a "testing" environment.
First, wait until you know what's happening with the existing automatic system before implementing the new one. Would you consent to a doctor treating you without a complete diagnosis? Not!
Workflow automation shouldn't be any different; before making any changes, *diagnose* the state of your current system. Then, instead of proceeding blindly, you will be acting from a position of knowledge.
You should also monitor your AP data to determine which processes are effective and require improvement. For example, you might need to add a new step or have too many stages and should eliminate some of them. What you once believed to be doing well might benefit from some optimization.
When you take measurements into account, you may optimize operations more appropriately.
9. Be ready for change.
Workflow automation has generally been created by businesses to assist you in determining where modifications to your processes are required and to make it simple for you to implement those changes to reach the next level of performance. This means that if you want to make positive changes, you must be willing to work differently.
You'll learn new things about your accounts payable workflows as you monitor and test the metrics that drive these modifications.
10. Streamline the basic processes.
The ability of automation to simplify complicated procedures is one of its most significant benefits.
You can help improve corporate processes by standardizing fundamental core processes like invoice receipt, GL coding, and approvals. You can work more rapidly and efficiently while staying within the rules if there are standards.
This results in a quicker procure-to-pay cycle, which helps the accounts payable department and the suppliers it interacts with. In addition, this enables them to get their payments promptly and with accuracy.
Final Thought
By adhering to these tips and making continuous improvements to the AP procedure, you may speed up the approval process, eliminate late payments (and late fees), and eventually have more control over your cash flow. However, using paper and manual processes would make it harder for you to accomplish your goals. The best method to advance your accounts payable department and eventually achieve best-in-class status is to implement accounts payable automation solution.
Ready to start automating your accounts payable processes? See how software like ZarMoney can help to save you time, money, and headaches.
