"How to process invoices in Accounts Payable Automation with greater accuracy, efficiency and speed” is the question accountants have been asking since the first invoice was filed. It’s not just that traditional Accounts Payable and Receivable is unnecessarily time-consuming and prone to error — accountants want to devote and use more time to valuable tasks that add tangible value to the business.
As we navigate the digital-first era, perhaps some methods are better left in the past? But for that to happen, we need to pick apart the accounting system honestly and precisely.
Of course, you can always hire additional staff to absorb the extra work, but companies do not always want to take that route, as it can be costly and merely a short-term solution. With growing business, it is not a question of having enough people, but rather one of being efficient enough.
The accounting department up against the wall of growth
Most companies handle their accounting internally on a small scale until they run up against the wall created by growth. People enter invoices one at a time, validate them, approve payment, classify them... It can take 3 to 5 weeks to process an invoice with this process.
The more invoices there are, the longer it takes. Late payments accumulate and penalties build up, not to mention duplicates, disputes, and excess paperwork. The result is that accountants spend nearly one third of their time handling late payments. This activity is neither interesting for them nor productive for the company. Quite the contrary.
Impressive productivity improvements
By leveraging smart automation techniques, ap automation saves a significant amount of time. Studies show that companies can make their overall processing cycle time 2 to 5 times faster.
Not only that, but faster and more efficient invoice processing helps limit lateness, disputes and time spent answering supplier questions. This leads to even further productivity gains. With the right tools, finance departments can improve their efficiency considerably and take on increased business activity over the long run without having to resort to staff increases.
Analysing the full cycle of Accounts Payable
For any business, Accounts Payable processing begins and ends with the vendor.
After ordering and receiving the product or service, a pending account payable can be drafted based on the agreed terms between business and vendor.
For services rendered, the vendor will then send through a receipt, increasing the credit balance. The accounting department needs to cross-reference this receipt against the received report or purchase order, ensuring that the information, prices and quantities on each document are identical to those on the receipt and invoice. If everything matches, an invoice for payment can be authorised.
This seems simple enough, but it doesn’t really show how time-consuming Accounts Payable invoice processing and payment can be.
With the manual route, accountancy can quickly change from “How to process invoices in Accounts Payable accurately” to “Where did that invoice disappear to?” or “I calculated and recalculated the payment numbers — how did the error creep into the processing?”!
Unfortunately, traditional AP invoice processing relies on humans being able to input data correctly, each and every time. The journey from printer to filing cabinet is also known to be rife with danger, and many an invoice has slipped through the cracks (or disappeared through an open window) to the detriment of client-vendor relationships.
Luckily, there are viable softwares that remove human steps and errors and disappearing paper invoices from the equation (which is good for business).
How to process invoices with Accounts Payable with Automation
Using artificial intelligence and cloud-based technology, AP automation streamlines and optimises the invoice process to make accountants’ lives easier. A best-in-class service provider will be able to deliver a solution that automates data entry and invoice validation through multichannel capture, from all document types and in multiple formats.
So what makes a successful workflow? We’re glad you asked:
- Manual data capture is time-consuming and inevitably leads to mistakes. With AP automation, clerical errors are quickly identified and fixed.
- Upon entry, invoices have to be categorised by format, such as PDF or XML. AP automation simplifies this process by sorting files automatically, without human intervention.
- The invoice approval process is multifaceted and involves many people, which can lead to delays and incorrect invoice routing if done manually. Automation removes approval bottlenecks and automatically routes the correct invoice to the right person.
A modern business cannot afford to be weighed down by high processing costs, lack of visibility, lost documents, or the absence of a reliable audit trail. It costs £110 to search for a document and £200 to recreate it, and when you consider that 7.5% of documents handled by any given company are lost, the disadvantages of manual AP become clear.
AP automation is transforming the accounting industry. It enables businesses to turn their Accounts Payable departments into innovative, cost-efficient profit centres with staff who have the time to add meaningful, valuable contributions to the company.
Can you afford not to go with AP Automation?
Implementing digital-first AP automation is not a leap of faith. It’s a considered decision that will transform your Accounts Payable department by reducing costs, incentivising employees and optimising the invoicing process.
By leveraging cloud-based automation, AI and Robotic Process Automation (RPA) technologies, Yooz empowers businesses with intelligent, intuitive Purchase-to-Pay (P2P) automation solutions. Our platform integrates seamlessly with over 200 financial systems to deliver best-of-breed automation with unmatched speed, security and affordable zero-risk subscriptions.
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