19 Key Benefits to Your Business of Integrating Accounts Payable Automation
05-02-2024 10 minutes read
Accounts Payable (AP) is one of the primary functions of any business – a key function of any finance team is to ensure suppliers and vendors are paid accurately and on time. Efficiency in the process can have many benefits, while at the same time an inefficient AP process can cause a multitude of issues.
The main challenges that accounts payable departments face relate to the process being done manually: missed payments, missing invoices, inaccurate amounts and even duplicate payments are some of the complaints heard from businesses operating AP workflows manually.
These concerns are further compounded in larger companies with the volume of payments required – processing time, accuracy and visibility are often affected.
The solution of course is digital transformation which can resolve these challenges by automating your business’s accounts payable processes.
AP automation addresses the key challenges identified above, reducing bottlenecks through manual tasks and achieving the submission of invoices, payment approvals, invoice matching and payment processing through a single solution.
However, the advantages of integrating an accounts payable automation solution extend far beyond the realm of time efficiency and cost savings. The process of moving to automation is the cornerstone of digital transformation, incorporating software technologies into an organization's products, processes and strategies to address specific business needs.
Integrating an AP Automation solution such as those offered by Serrala, has been proven to offer businesses a 90% increase in the invoice approval time and in general a 40-80% improved efficiency within accounts payable workflows.
Throughout this article, we will explore extensive a number of key benefits of integrating an AP automation solution into your business operations.
For more information on “what is AP automation” visit our accounts payable automation guide.
19 Key Advantages for Businesses Through AP Automation
1. Efficiency: Time Savings
In the fast-paced world of business, time is money. Accounts payable automation provides unparalleled efficiency, significantly reducing the time required for processing invoices. With an AP Automation solution, businesses experience a remarkable 40-80% reduction in invoice processing time, ensuring a streamlined and time-effective financial workflow.
2. Invoice Processing Cost Efficiency
One of the most tangible benefits when automating AP is its impact on cost efficiency. Manual invoice processing incurs substantial costs, both in terms of labour and potential errors (then the fixing of these errors adding to the delivery time). Integrating an automated invoice processing solution, on the other hand, has consistently demonstrated a 50% reduction in processing costs , delivering substantial savings directly to your businesses bottom line.
3. Improved Accuracy
The benefits of AP automation extend beyond time and cost savings; by adapting process to digital transformation, this can directly address the accuracy of financial data. Eliminating human errors associated with manual processes, automated accounting processes result in up to 99% accurate data extraction from invoices, ensuring a reliable and error-free financial record.
4. Greater Visibility for the AP Team
Within the field of AP, visibility equates to control. AP automation systems offer real-time reporting for unparalleled visibility for the accounts payable department. Greater visibility enables AP teams to track invoice statuses, manage work queues efficiently, and identify discount opportunities promptly. With the added visibility, they can transform AP from a reactive process to a proactive and strategic asset for your business.
5. Increased Transparency for Stakeholders
For stakeholders ranging from business approvers and executives to vendors and auditors, transparency is non-negotiable. Automating a key process such as accounts payable with a software system ensures increased transparency throughout the financial process. Business leaders can access real-time information, facilitating informed decision-making, while auditors benefit from an organized and easily accessible digital trail.
6. Easier to Audit
Auditing is a critical aspect of financial management, and AP automation enables teams to respond in minutes to complex global audit requests. Digital trails and organized records simplify auditing tasks, reducing the time and resources required for a comprehensive audit. Automated AP software not only ensures compliance but also streamlines the entire auditing process for your business.
7. 3-Way Matching
The concept of 3-way matching is not just a technicality; it's a crucial step in ensuring accurate and authorized payments. AP automation solutions seamlessly match purchase orders to invoices and goods receipts to achieve 3-way invoice matching, thus safeguarding your financial transactions and providing a robust defence against fraudulent activities.
8. Early Payment Discounts
Prompt payments can unlock additional benefits for your business, such as early payment discounts offered by vendors. AP automation ensures timely invoice processing, enabling businesses to take advantage of these discounts and further optimize their cash flow.
9. Improved Vendor Relationships
Vendor relationships are the lifeblood of business operations. AP automation contributes to maintaining healthy vendor relationships by ensuring real-time status information as well as accurate and timely payments. The reliability established through our solution can lead to more favourable terms and increased trust among your key suppliers.
Navigating the complex landscape of financial regulations is a constant challenge for businesses. Utilizing an automated solution, ensures that your accounts payable department maintains full compliance, ensuring that your financial processes adhere to global fiscal, legal and industry regulations and minimizing the risk of penalties or lawsuits.
11. Integration with Business Software
Seamless integration with existing business software, particularly Enterprise Resource Planning (ERP) solutions, is a hallmark of any AP automation software. This integration enhances overall efficiency and data consistency across various business functions, providing a holistic and integrated financial management solution.
12. Automated Workflows and Processes
Streamlining workflows and processes is not just a digital transformation buzzword; it's a tangible benefit of our AP automation solutions. By automating labour-intensive tasks, automated accounts payable solutions minimize errors and accelerates the entire AP cycle, from invoice receipt to approval and payment.
13. AP Data and Analysis
Unlocking actionable insights from financial processing data is a game-changer for businesses. AP automation software systems facilitate comprehensive data analysis, empowering businesses to make informed decisions, identify cost-saving opportunities, and optimize cash flow management effectively.
14. Data Storage Costs
While the cost of data storage might not be a primary concern for the accounts payable department, the ease of data retrieval is paramount. Integrating a cloud-based AP automation solution ensures not just cost-effective storage but also simplified data search and extraction, addressing the challenges associated with retrieving specific information from complex systems like SAP.
15. Increased Employee Morale and Productivity
Within non-digital accounts payable departments manual tasks can be monotonous and time-consuming. Providing AP with an automated solution, therefore, can have a direct impact on employee morale and productivity. By automating repetitive tasks, employees are free to focus on more strategic and rewarding work, fostering a culture of engagement and efficiency.
16. Team Cost Savings
Efficiency and automation are KPI improvements required by most businesses. Using an AP automation solution not only streamlines processes but also allows businesses to operate more efficiently with smaller teams. This translates to significant long-term savings in labour costs, contributing to the overall financial health of your business.
17. Less Paper Use (Sustainability)
The move towards sustainability is not just a societal trend but a necessity for responsible businesses looking to move forward to their net-zero targets. AP automation aims to provide 80% touchless invoice processing, significantly reducing your business paper use, aligning your business with eco-friendly practices and contributing to a more sustainable and environmentally conscious operation.
18. Shareable, Easier to Collaborate
Collaboration in the digital age requires more than just shared documents; it demands a solution that facilitates easy collaboration. AP automation software and cloud-based platforms ensure that financial documents are not just shareable but also easy to collaborate on, promoting seamless teamwork across different departments or even remote locations.
19. Competitive Advantage
In a fiercely competitive business landscape, gaining a strategic edge is vital. AP automation positions your business as a forward-thinking, efficient, and reliable partner. Embracing technology not only streamlines your operations but also presents your business as a leader in the marketplace, offering a distinct competitive advantage.
How to Start Benefiting from the Cost and Time Savings with AP Automation?
With the extensive benefits of AP automation have been explored, the next step is how as a business keen to optimise your accounts payable process integrate the right solution for your business?
You can start your digital transformation journey with Serrala.
As a leading name within the financial automation sector, we are trusted by over 2,800 global brands in engineering solutions to enhance their accounting processes through automation.
Our AP automation solutions centralize and standardize processing of PO and Non-PO invoices across multiple locations, business units and enterprise systems. The SAP-embedded FS² AccountsPayable and cloud-native Alevate AP solutions enable organizations to capture vendor invoices digitally, touchless processing of invoices and manage invoice processing, approval and posting from start to finish.
Serrala AP automation solutions enhance global visibility and control over vendor payments and provide real-time information and detailed reporting and analytics to drive continuous process improvements within the AP organization.
We have a proven track record of helping companies succeed with their accounts payable digital transformation through award-winning AP Solutions from Serrala, helping Zurich North America transform its financial transaction processing, helping Honeywell implement a single global AP process, and guiding GNS towards containing its payment costs and improving its payment security.
Interested in integrating automation into your accounts payable process? Request a demo today.
What are the benefits of automated accounts payable?
Automated Accounts Payable (AP) systems offer multiple benefits, including increased efficiency, cost savings, improved accuracy, and enhanced vendor relationships. These systems streamline the invoice processing workflow, reduce human error, and ensure timely payments, thereby enhancing overall financial management.
What is the main advantage of accounts payable?
The main advantage of accounts payable is its ability to manage and optimize cash flow within a business. Efficient AP processes ensure that bills and invoices are paid on time but not too early, maintaining a healthy balance of cash-on-hand.
Can accounts payable be automated?
Yes, accounts payable can be fully automated with the right software solutions. Automation includes invoice processing, 3-way matching, approvals, and compliance management, transforming a traditionally manual and time-consuming process into a streamlined and efficient one.
What are the pros and cons of automation in accounting?
The pros of automation in accounting include improved efficiency, reduced costs, fewer errors, and better data management. However, the cons may include the initial cost of implementation, the need for employee training, and the reliance on technology which can have its own set of challenges.
How does AP automation increase productivity?
AP automation increases productivity by automating routine tasks, reducing the time spent on manual data entry, and minimizing errors. This allows the AP team to focus on more strategic tasks, improving overall business efficiency.
What is the most important aspect within accounts payable?
The most important aspect within accounts payable is the accurate and timely processing of invoices and payments. This ensures effective cash flow management, compliance with financial regulations, and maintaining strong vendor relationships.
What is the difference between manual and automated accounts payable?
The difference lies in efficiency and accuracy. Manual AP is time-consuming, prone to errors, and often lacks transparency. Automated AP, on the other hand, is fast, accurate, and provides real-time visibility into the entire process.
Further resources on AP automation
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