Driving innovation in document automation
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Today, many companies still manage their accounts payable (AP) process through a paper-based system, making it slow, error-prone, and inefficient. Manual data entry, comparison, and paper-based record-keeping no longer meet the needs of businesses that seek an optimal return on their accounting activities and a transparent financial supply chain. Accounts payable automation solutions are thus becoming integral to every company’s digitisation efforts. By leveraging automated document processing, businesses can streamline their AP operations, optimising business processes while saving time and money.
The accounts payable process is an essential component of the broader expenditure and purchasing cycle, forming part of the Procure-to-Pay (P2P) process. This cycle encompasses procurement, goods receipts, invoice processing, and business partner payments.
The AP process, in particular, focuses on invoice processing and supplier payments. After an order is placed and the customer receives the desired product or service, various essential accounting steps must be completed. These steps include invoice data capture, coding invoices with the correct account and cost centres, matching invoices to purchase orders, approving invoices, and posting payments.
The accounts payable cycle starts with the vendor. Once the procurement team places an order with the supplier, the company receives the product or service. The accounts payable department then logs the receiving report or the advanced shipping note. Subsequently, the supplier sends an invoice for the goods shipped or the service rendered. The AP department verifies the information on the invoice to ensure accuracy, often comparing it with B2B documents such as the receiving report, purchase order, or the shipping notice. It’s crucial to match the quantities, prices, and descriptions on each document to the invoice. If all the information is correct, the invoice is authorised for payment.
Traditionally, the accounts payable process is paper-based, manual, and time-consuming. Financial teams must compare, validate, and enter data manually into downstream systems. Managing large volumes of paperwork can overwhelm AP teams, leading to errors, delays, inefficient processes, and unnecessary costs, affecting not only employees but also the company’s bottom line.
Automation software is essential for streamlining accounts payable. Given that the steps in the AP process involve exchanging, verifying, comparing, and approving data and documents, it’s clear that manual operational accounting processes are time-consuming and prone to human error. By implementing automated document flows, businesses can streamline accounts payable effectively. Accounts payable software offers automated document processing, digitising financial and accounting processes, and enhancing efficiency.
The basic accounts payable cycle includes three significant documents: purchase order (PO), advanced shipping notice (ASN), and invoice. Financial teams must compare the incoming invoice with the advanced shipping notice or the purchase order to ensure correctness before authorising payment.
Accounts payable software automatically processes purchase orders, shipping notices, and invoices, facilitating optimised digital processes. The software extracts relevant data from documents and exports it into ERP or other IT systems. Invoices and shipping notices can be automatically assigned to orders or order items, ensuring transparency, speed, and accuracy. This automation relieves employees from manually checking and comparing documents, offering them full control and visibility of automated workflows, and providing critical real-time information.
Automation significantly reduces manual activities in accounts payable. There’s no need for manual data entry, as the software captures data automatically, ensuring high accuracy with minimal human intervention.
2. Time savings
Automated document processing speeds up invoice processing, making digital invoices easy to search for and impossible to misplace. Streamlining the approval process ensures that the right person receives the right invoice at the right time, freeing up the finance team to focus on other important tasks. According to a report by Ardent Partners, organisations that automate their accounts payable processes can process invoices up to 9 times faster.
3. Money savings
Manual processes are not only time-consuming but also costly. By eliminating manual work and saving time, businesses can reduce labour costs, particularly those associated with manual data entry, storage, and postage. Simultaneously, they can ensure that payments are always made on time. Ardent Partners’ research shows that enterprises using automated AP processes can process invoices at a cost that is 92% lower than those relying on manual processes.
4. Increased sustainability
Paperless accounting processes not only improve efficiency, accuracy, and transparency, but they also support sustainability. Document automation saves valuable resources, contributing to an eco-friendlier business model.
5. Enhanced visibility and more control
Automated accounts payable processes provide enhanced visibility into payment workflows, helping prevent errors and detect suspicious activity. They maintain compliance, avoid fees, and create a clear audit trail.
6. Improved accuracy
Accounts payable automation tools reliably reduce errors and increase accuracy. A survey by APQC shows that organisations that automate their accounts payable processes have invoice processing error rates that are up to 66% lower than those relying on manual processes.
Automated document processing is the key to streamlining accounts payable. By choosing an accounts payable automation software, businesses can eliminate manual accounting tasks, improve accuracy, achieve data transparency, automate operational processes, and take control of important financial workflows. The automated processing of document flows helps enterprises achieve a higher level of efficiency and accountability, while also saving time, human resources, and money.
As businesses look towards a more digital future, the benefits of automating the AP process are clear. Companies seeking to boost efficiency, reduce errors, and save costs should consider investing in automated document processing solutions. The initial investment in this technology can yield significant returns in the long run, contributing to business growth and financial stability.
Discover the benefits of automated document processing along the P2P process