In today’s stressful times, a business to survive has to focus on both revenue generation and cost reduction. A two-sided approach is the way to stay sustainable.
Businesses are realizing that revamping their processes is a must to better utilize resources and grow. One of the processes that is suitable for this overhaul is the accounts payable process.
Duplicate or late payments, slow processing of invoices, higher data entry costs all put a dent into the profits of a business undertaking.
The way to deal with this is to adopt AP automation. If you want to know how AP automation improves the AP process, read on.
1. Avert Duplicate and Late Payments:
Duplicate payments are a recurring problem with a manual AP process. Employees need to use higher diligence to see that no double payment is done. Businesses can avert this error using automatic invoice matching.
Late payments are another issue with the manual AP process. Slow processing leads to delayed payments and can cause a breakdown in vendor relations. Also, businesses end up paying interest or fines for late payments that automation can reduce.
2. Reduction in Processing Time and Cost:
AP automated solutions gather all the invoices, coming in through any source like email or post easily without manual intervention. Unlike manual processing, where the invoice is printed and scanned into the system, invoices automatically get updated with AP automation.
Time, money, and effort spent on processing the invoices is greatly reduced. Businesses have all the invoices in one place and can easily control the process to see that payment is timely and there is no duplication.
3. Use of AP Resources For Valuable Purposes:
When accounts payable is automatic, routine tasks like data entry, manual verification/validation, invoice matching are taken care of. The AP department staff can be used in more productive business activities.
The reduction of paper-based systems allows employees to participate in decision-making, planning, and growth activities. Employee efficiency will see a massive improvement when AP systems are automated as there is more accountability and clarity.
4. Maintain A Good Relationship With Suppliers And Vendors:
Timely payments to suppliers, vendors, and government authorities help foster a good relationship. Businesses can negotiate better terms for supply of materials as the vendors see you as a reliable enterprise. A business can avail early payment discounts to reduce their costs further.
With AP automation, you can track invoices and make timely payments efficiently.
5. Better Control And Insights Into Important Metrics:
AP systems offer the facility of analysis and creation of valuable reports. A business has better control over the whole AP processing as all data is available immediately. Any discrepancies can be red-flagged and dealt with, making it easy to control intentional frauds and duplicate payments.
AP is an important activity in any business. AP automation improves efficiency and streamlines the whole process. If you found this information interesting, please comment and let us know how you’re using AP automation in your business.
If you would like to watch the video of this article, click on the link below:- 7 Major Accounts Payable ErrorsOther Accounting Related Information