Evidently, Accounts Payable (AP) department is an important part of any organization. A well managed AP department can foster positive vendor relationships, flexible payment terms, and effective cash flow. However, there are a few pain points that AP department experience. Automating accounts payable processes can address these issues and help you make the most of your accounts payable department.
Streamline Processes
Having your AP staff review all the invoices can be challenging. Managing the huge volume of billing documents can be daunting. Automating this process makes a huge difference. Eliminating the burden of handling paper invoices manually will improve your timelines and reduce lost invoices.
Timely Payments
Audits and compliance require payments to be done on time, unfortunately, many companies will not strictly enforce the policies. Purchase orders can drive proper payment approvals, but most often creating a PO is impractical. Signature books or printed email approval methods require manual intervention to validate the approval process. ERP systems may provide some approval workflow, but this is not always flexible and configurable. In contrast, accounts payable software has in-application approvals for payments. Make sure your partner has flexibility in the approval routing so that your team will be able to review approvals easily.
Quick Turnarounds
Turnaround times may vary considerably when you rely on manual AP processes. Around 97% of invoices are still processed manually. The challenge here comes with some invoices requiring individual review, while some require entry and matching to an accurate PO or constant GL code. The automated accounts payable software will push these invoices directly to an ERP module, thus no keying or reconciliation required. Your staff will only review when there are exceptions, saving a lot of productive time. With automation, invoice processing rate can be increased by five percent per employee.
Centralized Control
Keeping all information at one place helps you avoid chasing people for the required data information. Not centralizing accounting information allows for duplicate payments. Also, late payments could be one reason to centralize the information as well. Handling invoice processes in a centralized system improve internal controls and give complete access to everyone involved in the process.
Combat Fraud
AP is the department that handles financial operations across the company. Manually managing things leaves space for human errors and internal fraud. To combat fraud, you will need to strengthen your internal controls. Having a system that automatically performs 3-way matching can catch suspicious invoices and allows legitimate vendors to maintain their information up-to-date. This would help reduce invoice fraud.
Accuracy
Most of the AP departments’ time is spent in keeping information accurate and up-to-date. Poor data capture requires the AP department to spend long hours correcting and updating information in the ERP system. Sometimes even optical character recognition technology (OCR) will not record the information accurately. A combination of OCR and keying review will ensure data accuracy.
Digital Data
Keeping records accurate and accessible is another challenge AP departments experience. Not only should you record transactions accurately, but you also need to make the information accessible. Audits become easier when your records are easily understandable as well as sorted and accessed. AP software will store the data electronically and make the information easy to manage.
Streamlining accounts payable process can be difficult, but the overall benefits are tremendous. With automation, internal process improvement and teamwork, the AP department can be transformed into an efficient and profitable department. Choosing SutiAP for your AP automation adds agility to your business through complete automation and transparency.
Sireesha
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