The accounts payable department plays a critical role in business operations, ensuring that all invoices are approved, processed, and paid. The information you can gather from this department will also help you come up with important business decisions that can help you prevent wasting financial resources. With the accounts payable department, you can get records the moment you need them and steer your business in the right direction.
But what sounds like a simple, straightforward process is not always so. From the initial receipt to payment approval, invoices go through multiple steps that require the staff to intervene. That human intervention opens the door to the possibility of errors which can end up costing even more time, sometimes dragging out the process for weeks on something that should take a day or two at most. And it gets worse if a company has hundreds of invoices to process.
Luckily, there is a solution. Automating your accounts payable department. Whether you are looking to increase efficiency or lower operating costs, the benefits of automating your accounts payable department by investing in invoice automation software are plenty. Here are a few.
Can Help You Avoid Costly, Time-Consuming Mistakes
One of the most time-consuming parts of the accounts payable process is hand-coding the invoice data into the accounting system, and doing so correctly. However, anytime you write by hand or type, there’s a possibility of mistakes. This is especially true if your accounts payable department is tasked to record a huge amount of information every single day. The bigger the scope of the accounts payable department is, the more chances there will be for errors and mistakes.
And, when you have a monumental stack of invoices to go through, the chances of making a mistake are compounded. Unfortunately, even one simple error can cost you a lot of time and money. If your business is still starting or small, one single mistake committed by the accounts payable department can become the reason why your business will go bankrupt and, eventually, close. Thus, the accuracy of your financial records can make or break your business’s ability to stay afloat.
By automating your accounts payable, you can find and correct any errors quickly and efficiently. Some systems can even be set up to recognize and flag any errors or inconsistencies. This will make it easy for you to recognize problems early and look for solutions as soon as possible. This feature will prevent problems from creating a snowball effect on the business and ensure that all of your financial records are accurate. And there’s the bonus of knowing that the invoice you enter will be the same invoice others see and reply to.
It Makes the Entire Process More Efficient
In manual A/P systems, a lot of time is lost on tasks such as punching in numbers, searching for and correcting mistakes, and hunting down outstanding invoices and other essential documents. Everyone knows that wasted time equals money lost. Instead of making the most of your employee’s talents and skills, you’ll likely have to let them face the computer for long periods just to punch in numbers. This can limit your employees’ opportunities to grow professionally and for your business to expand.
By automating the accounts payable process, your staff will no longer be slowed down by performing these manual tasks. Instead, they’ll be free to use their skills in more productive ways, which can benefit your business greatly. With an automated accounts payable process, your employees can do more tasks at a time and contribute more towards your business goals
It can also help cut down or even eradicate the time lost chasing approvals with phone calls and lengthy emails.
Also, it can help you avoid late payment penalties. Since automating the process can reduce the invoice cycle time, this gives you ample time to complete the payment within the terms. It can even help you take advantage of early payment discounts offered by suppliers.
Get Invoices Approved Faster
Even the very best manual approval process can hit snags when it comes to the bill approval and payment process. It’s not entirely out of the realm of possibility for an invoice or even payment to be overlooked. But by automating the a/p process, everything from receipt of the invoice to bill approval to payment becomes automatic and much more streamlined.
In addition, by automating the process, you will no longer need to spend hours chasing down missing information since every step of the process is documented and right there for you to look at with a few simple clicks of a button.
Speaking of documentation, how many times have you had to stop what you are doing and search for a critical paper stuffed in a filing cabinet somewhere in the office? When you automate the a/p process and use a transparent, digital process, you are also creating a digital trail that anyone can follow.
Using an automated platform for accounts payable enables you to easily track every step of the operation, and hold on to those records for as long as you need. Just think of how much simpler it’ll be to find what you need in mere minutes! Not to mention it cuts down on the possibility of accounts payable fraud.
Accurate record-keeping will make it very easy for you to generate financial data the moment you need it. This feature can be very beneficial, especially if you plan on working with new stakeholders. Instead of merely explaining to them how your business is growing, you can simply show them records from your automated accounts payable process and let the numbers do the talking.
Can Help Improve Your Bottom Line
When it comes to improving the bottom line, there are significant challenges for any business. Especially so with manual a/p services. Manual accounts payable services are costly. Plus with so many different steps and so many people involved in completing the process, it’s costly, too. Everything from delayed approvals to late payment fees to duplicate payments costs the business money and time. Plus it’s extremely frustrating.
With automated accounts payable services, fewer people are needed, and the entire process is faster and smoother. Additionally, the elimination of costly errors such as late payment penalties, double payments, and false invoices, combined with benefits like early payment discounts, and automated accounts payable services can make a significant contribution to your bottom line.
Plus you’ll have everything you need to make important decisions regarding your company’s future, right at your fingertips.
Despite the ease provided by online tools and software, many accounts payable departments are still processing their invoices manually. However, by converting to automated accounts payable, you can increase speed, accuracy, organization, and accountability. It’s a simple and effective way to increase productivity while lowering costs. If streamlining your a/p process is one of your business goals, perhaps accounts payable automation is the perfect tool for you.
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