Best ways how to automate accounts payable 2022

Contents

Strategies for Success: Automating Accounts Payable

How to automate accounts payable, As the financial director of your company, you might be wondering what actions you can take to enhance the efficiency of accounts payable and generate more revenues. We’ll explain the steps to ensure you get the most ROI on your investment should you choose a new program for your accounts payable.

It’s important to ensure that your suppliers get timely paid, without any errors or worries. You may also be seeking an option that reduces expenses drastically as well as streamlining payment and invoice procedures, which allows you to profit from new opportunities to expand and expand your company.

A powerful AP automation system will help you accomplish this! The Accounts Payable department has the obligation of making sure that the invoices of suppliers and vendors are approved, processed, and paid in time to keep the business running.

There are numerous ways to start in the Accounts Payable Automation.

We’ve selected the top five most effective practices you can apply to prepare your AP department to be successful. You can find below. It is also possible to go straight to the benefits these practices can bring in for your company.

How to automate accounts payable, Automating & Digitizing Payments

It could be it’s a given that automated payment processing is an essential requirement for any business that is successful. Paper-based processes have left a lot of businesses vulnerable for a long time especially due to recent incidents. Automating payments lets AP departments to make payments from afar and more effectively, with real-time tracking and 24-hour access to the payment details.

In the end Payment automation improves productivity within the department by reducing time and money. Additionally, it allows companies to remove the majority, if not all of their checks payable to accounts printing, while also allowing remote printing of business continuity checks when required.

The additional benefit of monthly cash rebates on purchases with virtual cards make the automation of payments a top goal for CFOs as well as AP professionals moving forward and certain AP departments earning more than $300K per year of rebates from AP spending.

Fully automated For Invoice Processing

If you’re just beginning to learn about AP Automation, then you might believe there’s already an invoice automation system in place. Many finance professionals believe that since they typically get eInvoices as well as because the ERPenables the scanning of emailed invoices easily They’re already automated. Most of the time it’s not true.

Automating invoices gives AP departments the capability to transfer paper invoices, eInvoices , and email invoices to a workflow that is digital using three or four-level recognition , as well as automatic fraud detection. Invoice automation also allows remote approval procedures and multi-factored approval workflows

(invoice dollar amount thresholds for approval) as well as emails to approvers whenever they receive an invoice, alerts for missing or changed information, custom field and character scanning alerts for extreme variances in amount as well as contract and PO match alerts, duplicate invoices and much more.

An invoice system that is fully automated virtually eliminates the possibility of fraud. It provides your AP department full control over the approval of invoices.

Enable No Touch & Remote AP

The recent pandemic has forced companies to confront a multitude of operational flaws within their current processes, which they might not be aware of. Perhaps none more than the urgent necessity of planning for business continuity and remote process support across all business operations.

The Finance as well as AP departments have held on to manual-based processes for much longer than other business areas. The most important reason for the slow adoption of newer and more efficient procedures has been the ease of reliable payment methods and perceived difficulties in acquiring and maintaining information about vendor payments.

It is difficult to keep track of banking and credit card details is certainly more challenging than writing a check on paper that all you need are a person’s name, and address.

Decentralize and Layer AP Functions

Numerous reputable organizations, including Harvard estimates that COVID-19’s effects could negatively affect the business environment well until 2022. Office closings and social distancing enforcement could take an unplanned break for the summer. However, it is overly optimistic to believe that everything will go like usual from now on.

This means that AP as well as finance specialists have to develop solutions that permit full functionality in the office or home. Decentralization is crucial in all business in the new normal. If you’re not able to make it to the office in time to receive the paper invoices and print checks, you’ll require a complete backup plan.

Finance executives are already preparing to spread out office shifts employees are being requested for work at their homes for an indefinite period while desks are separated while conference rooms will be being closed. Companies are also looking at ways to save money since the cost of office space is predicted to increase by three times in the coming months. Remote working is essential, which makes the automation of invoices and payments more essential than ever.

Accept the High Tech and Low Touch Economy

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Different regions beyond those in the United States embraced a contactless economy long in the past. In the UK paper-based transactions and credit cards that are physically based are almost non-existent. We anticipate a similar change to occur in North America over the next few years, or even earlier.

Paper checks were predicted to disappear from B2B payments in 2030. Don’t be surprised if your check is due to expire much earlier in a post-coronavirus world. Digital check solutions have already come up with a way to make checks available via email in just a few seconds, without the need for paper or a stamp that is wasted.

Some companies have stopped using checks completely in favor of safer, newer payment options, such as virtual cards (vCards) or Real-Time payments (RTP ).

No matter how long it takes companies to get rid of checkbooks from their payment process there is one thing that is certain: the day of reckoning is coming. The doomsday clock has been set for five minutes until midnight for checks made with paper in AP. It is the High Tech Economy that is Low Touch is going to be here for a while.

Utilizing these methods you’ll enjoy these advantages:

1) Save Time

The value of time is in the business world And with an AP automation tool you will be able to cut down on the time required to process invoices and pay manually.

On average 25% of the working week is usually devoted to manual work. Eliminating these tasks means your AP team would be able to have an additional 25% of time that they could dedicate to more worthwhile tasks. In the typical 40-hour work week, this amounts at an additional 10 hours each week which could be more efficiently utilized!

2) Immediate Cost Reduction

Automated solutions can cut costs by allowing you to reduce the time wasted for manual invoice processing. You can also reduce the amount of printing equipment for check printing such as MICR toner and check stock envelopes and postage.

Our AP Automation solution can:

Reduce costs by as much as 80 percent
You will not have to pay for any additional software costs
Earn money using virtual card

3) Revenue Generation

If you move to electronic payments as well as invoicing, you could also generate an entirely new revenue stream. Every digital card that is used generates monthly cash back for your company, which turns an AP division into an revenue source (typically around 1percent of your total expenditure — which is paid out every month). ).

Virtual card rebates provide instant returns on your investment for any transaction made with a vendor who is paid with a virtual cards.

The more credit card transactions you make, more you’ll earn.

4.) Greater Security and Control

Through the automation of your payment and invoice processes You gain more ability to controlover the process, as well as peace of mind knowing that the system works for you.

Enjoy the benefits of AP automated and digital processes without losing any control of cash flow or visibility. It is possible to move towards paper-free AP without outsourcing, and still maintaining your existing ERP and bank.

The greatest part? You can decide to move to automation using a gradual method or all at once. Watch our audio podcast about how to take the Path of Least Resistance to AP Automation to learn more.

5) Better Organization

There is no need to need to search or sift through documents manually to find the information you’re looking for because every single detail on your invoices and transactions is available instantly.

The real-time Business Intelligence Analytics we provide allow users to access reports and tracker information as simply at your table in the kitchen as your workstation. Automation also allows internal controls that reduce the risks of human error, fraud and as well as empowering users to design custom workflows.

6.) Secure and Safe

Your automated accounts payable solution stores your data in the cloud. This gives you greater security knowing that your data is safe and bank-level secured.

According to the Association for Financial Professionals (AFP) 74% of businesses were victims of payment fraud in 2020. They also recommended that finance professionals be on guard and that the actions you can take to safeguard your business could include:

Regularly verifying controls against fraud
Implementing and strategizing new controls
Investing in more secure platforms

It’s essential to keep up-to-date with the latest technology and utilize every tool you have available to safeguard your business against fraudulent activities..

You’ll reduce time and costs by removing the manual AP processing and transitioning to the ease of a machine that earns money.

Conclusion

After you have learned about the advantages of automating accounts payable Take it one step further to learn what OnPay Solutions can guarantee an immediate ROI in you and your AP department.

What’s The Manual Process for Accounts Payable How Does it Work?

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Manual processes can be time-consuming and are prone to costly mistakes. They require attention to specifics and the increased volume of work can overburden the manual process of accounts payable which can lead to problems with compliance, invoice match errors , or a mistake during the month-end closure of books.

The process of accounting payable begins after the invoice has been accepted by finance departments. The department is responsible for any of the goods or services which are supplied.
When these invoices are received They are then compared against the services or goods provided.
Once you have received confirmation about the same from the relevant department, the invoice payment the invoice needs to be confirmed.
Prior to the processing of payments, the finance department ensures that the invoice falls in compliance with the financial regulations of the company and other regulations.
The invoices are then manually entered into an accounting software, and a physical copy of the invoice is kept for auditing purposes.
Once the above-mentioned is done, the payment is processed and sent by the seller.

If a small error during any of the previously mentioned processes occurs, there’ll be a long delay in processing the payment. This is when the issues start to escalate and the relationship between the vendor and customer deteriorates.

What is the Automatic Accounts Payable Processing Work?

Automated accounts payable systems are able to make a process easier, more precise and extremely efficient. It aids in reducing the payment cycle, controls the financial policies, streamlines the approval process and stores the records as a digital filewhich makes the entire process entirely paperless.

Once the invoice has been received The system then checks each line item against purchasing order and the information on receipt to verify that the items and services purchased are exactly the same as the items ordered and charged. If an error is discovered and an alert is issued to the department of accounts payable to confirm the error.

Automated email messages can be configured to remind of the pending approval, completing payments without delay and avoid a delay. Automated three-way matching could be made from invoices, purchase orders and delivered slips that have been verified, thus making sure your systems for accounting are up-to current.

7 Methods to Monitor Accounts Payable

Automate repetitive tasks The tasks such as approving purchase orders or making payments on invoices, can be tedious and take up a lot in time and energy for finance departments. Automating these tasks through creating email notifications for any waiting approval or processing of payments, comparing invoices to purchase orders, and so on. This can dramatically boost productivity and give employees the time they need to focus on other tasks.

Vendor portals A vendor portal allows your vendors to send and track a quote , instead of emailing. They can also communicate directly with your purchasing team and receive automatic payments. Vendors can benefit from discounts through the setting up of rate contracts and track delivery statuses in one workflow.

Beware of Fraudulent Errors By having an automated system for accounts payable will help you avoid fraud in money transfers, theft , or costly mistakes. In addition, you can increase security by setting up a one-time set-up of recurring payments. This will require at least one individual to sign off on the payment, send an email or SMS messages for every payment. This will reduce the risk involved with the process of making payments.

Establish governance and Compliance Establish Governance and Compliance advanced approval hierarchies, and multi-stage approval workflows that take care of all invoices or purchase orders. Set up robust procedures and accounting procedures to automatically categorize and approve certain types of request from specific individuals to speed up your approval procedure.

Audit trails — Access the entire transaction information when purchases are processed. With a reliable system, all of the incidents are recorded during the process of executing any purchase order or transaction. Additionally, the system will provide immediate access to the complete information about spending and budget.

Automated Reconciliations All purchase made using an automated e-procurement system needs to be automatically mapped to the invoice issued. Other data points, like the delivery of the product or payment must be automatically mapped to that purchase invoice.

Automated Business Payments when the payment is made it is recommended that a transaction ID is created. The system should automatically collect and then map the transaction to the invoice to ensure that three-way match happens in real-time and the transaction trail is tracked in real-time.

The benefits CFOs can realize after implementing an accounting system such as this include the increased accountability of accounts payable and processes, as well as the streamlined process, complete control over budget spending and productivity improvements, efficient collaboration and communication, speedier processing of invoices, and reduced risks that come to routine payment of invoices.

This results in a more positive relationship with vendors , giving them access to preferential service and more advantageous deals.

Automating accounts payable (AP Automation) allows companies to seamlessly manage invoices for suppliers without human involvement by implementing digital workflows to handle processes previously handled through the AP personnel member.

Holistic accounting payable automation begins by capturing invoice information in digital format typically through a scanning or capture that includes optical character recognition (OCR).

Automation of accounts payable will control the coding and processing of the invoice via the digital workflow. It functions in accordance with a specific logic set within the automated accounts payable software.

Automation of accounts payable (AP Automation) will be integrated into a business’s enterprise resource management (ERP) system(s), effortlessly transferring data between both systems without stressing the ERP environment or IT resources.

Automation of accounts payable dramatically reduced the possibility of fraud providing management and AP personnel unprecedented visibility and reporting capabilities on the movement of transactions and invoices across the entire company.

Automating accounts payable can result in substantial cost savings to businesses, beyond the anticipated savings from removing manual tasks. Companies can streamline their vendor portfolio, prevent payment errors or duplicates and also benefit from early discount on payments.

How can I automate the process of paying accounts?

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Companies that want to automatize accounts payable typically employ an AP automation system that connects to the ERP system as well as any other applications for business in place. There are now several cloud-based accounts payable software choices that are available for businesses that are of any size and industry.

Automating the process of paying accounts payable operates differently based on the kind of invoices from suppliers that are dealt with. In the case of indirect spending or expense invoices, automated by the software to pay invoices can support automated recording of data, codification and then distribution of the invoice for approval to the proper person within the company.

If direct spending is involved and it is associated with a purchase or purchase order involved the accounts payable automation system will compare the invoice information to the purchase order, and If everything matches, instantly forward the invoice for payment with no human intervention. This is what’s referred to as invoice processing that is touchless and the purpose of automating accounts payable.

How do you choose an account automation program for payables?

Businesses looking to implement automation to their accounts payable process should look into the various AP automation solutions carefully to determine the most suitable solution for their business.

It is crucial that the software for automation of accounts payable chosen can handle every invoice processing scenario in order to guarantee the complete automation of accounts payable as well as substantial savings in terms of both time and money.

It is also essential to comprehend how the latest AP automation software integrates with the current ERP to ensure data synchronization and an efficient process that eliminates manual processes and enabling the ability to automate accounts payable.

accounts payable groups have the opportunity to take their enterprise forward through AP automated processes.

accounts payable (AP) plays an essential function in the business process in ways that many companies are just beginning to recognize. It is well-known that this will keep light on inside your workplace However, it also has an direct effect on the management of cash flow as well as security against fraud and relationships with vendors throughout the business.

But the impact that accounts payable has on these crucial tasks is either positive or detrimental is dependent entirely on the manner in which an AP team conducts their job. The unfortunate fact is that the majority of accounts payable teams do not even get time to think about issues such as cash flow optimization and fraud prevention.

The reason? Manual processes for accounts payable make accounts payable teams to just paying the bills; often on time, but frequently late.

Over the whole time span that an invoice goes through all the way from receipt to payment, there are too many steps in the manual process of accounting payable that need AP personnel to be involved. Each one of these points that require manual intervention could delay the payment process for weeks, even though it shouldn’t really be more than a couple of days.

Each action can lead to mistakes that could cost you additional time to correct in the month-end closing. It’s not the way to go for AP teams and it shouldn’t have to be.

How do you automate accounts payable

When investing into “point solutions” that focus on specific aspects that make up the AP process could help you solve the tactical shortcomings of one aspect, the best way to improve efficiency is adopting a comprehensive, end-to-end method.

The integration of accounts payable into an optimized workflow increases efficiency throughout the entire process and offers the advantages of a single process for AP. These include:

Centralization of all operations related to accounts payable
Automatically preserving all payment and approval details
Simple transitions between each stage of the process of accounting payable
More visibility into the invoices, payments, as well as suppliers

Top 3 Manual Automated AP Tasks:

Cloud-based technology has helped accounting teams to get rid of the need for manual procedures that have historically hindered their efficiency. Automating the whole accounts payable process is the ideal and the ultimate goal, these are the most manually-based tasks we think should be automated in order for the best advantages:

1. Invoice Approvals/ Matching

The process of getting approvals for a variety of accounting teams is currently managing a myriad of emails and trips to the office to pass off and follow-up on outstanding approvals. Although a process like this will get the job done (with WFH mandates, it’s becoming more difficult and even impossible) however, it’s extremely difficult to track.

When a vendor calls to inquire about what’s happening with an invoice often, just locating an invoice is placed in the approval process could take several days. If your business uses purchase orders to avoid the requirement to collect approvals, you’ll still need to do the work for you. The process of reviewing each invoice according to the purchase order taking line item by line item is a lengthy and manual procedure.

Automating the approval process for invoices and matching process removes the requirement to have a human presence at this stage of the process, unless required. Invoices can be routed automatically to the appropriate approver and automated follow-ups can remind them of deadlines that are coming up.

In the same way, automated purchase order matching makes use of algorithms to swiftly check invoices against their respective POs and flag any mismatches to be reviewed further.

2. Invoice Data Entry

Then, there’s the huge job of getting the correct invoice information to your financial system. Manually entering data is not just a significant amount of time which isn’t exactly thrilling for your employees however, it also opens the possibility of mistakes. The errors could or might not be noticed in the books until the month’s close as per the 1-10-100 Rule of thumb, the cost of each mistake is 10x more expensive to correct than to avoid. Even a tiny amount of erroneous mistakes can lead to costly expenses.

Automating the entry of invoice data and removing the need for manual entry, there’s no longer the time-consuming hassle associated when you have all the invoice data entered in your financial system. Actually, you won’t have to upload an Excel spreadsheet.

solutions such as MineralTree connect directly to the ERP and the data that is recorded automatically transfers across to the accounting software. In addition, top-of-the-line automated tools can code invoices with 99.5 percentage accuracy, significantly reducing the amount of errors holding teams back when they come to their month-end closing.

3. Payment Execution

Once a payment is approved, the invoice will make it to the person who cuts the check or manually complete the online bank transfer. The individual responsible for this must be aware of all due dates for payment as well as all late-payment discount deadlines. There are hundreds of invoicing processed every month and a plethora of deadlines to meet, keeping track of these deadlines can be difficult.

If they’re not monitored closely it’s possible to disappoint your suppliers by late payments, and thereby depriving your cash flow in the short term of early-pay discounts. Despite the documented risk of fraud, paper checks remain the most popular method businesses prefer to pay vendors. However, paying with a check isn’t only dangerous, but it’s also expensive.

Aberdeen Group reports that paying through paper checks costs companies $7.78 for each check.

Automating the process of payment, approved payments are scheduled and then immediately sent out on the correct date. APC offers a central workflow to process payment types across all kinds that make it easy to make payments electronically and reduce the risk and cost associated with each payment.

In addition, a two-way sync with your ERP system and the payment automation solution permits discounts for early payments to appear automatically when you plan your payments.

Accounts Payable Automation using MineralTree

MineralTree TotalAP is an automated AP solution which takes an end-to end method of the automation of accounts payable. Companies that choose to invest in MineralTree can enjoy up to an 80percent improvement in efficiency. They they also significantly decrease their risk to fraud by implementing easy, repeatable, and scalable payment control in their payment process.

The majority of finance and accounting professionals are aware of the advantages of an automated AP process go beyond fraud protection and an significant return on investment But did you have the knowledge accountants that automate the process of capturing and processing invoices can often save hours of their time every day? You’d never need to skip lunch to look for payment authorizations or print checks in the future!