Survival Guide to Automating AP in 2023
Digital transformation has taken the globe by storm over the past two decades, but it’s been slower to catch on in Accounts Payable (AP) departments.
Many finance departments still use manual, paper-based accounting processes. Typically, 84% of the typical AP practitioner’s day is spent on tedious manual tasks like keying invoice data, pushing paper, fixing typos, chasing down information, and responding to calls and emails about the status of supplier invoices and payments. These tasks can harm your AP function as they limit visibility and increase your organization’s risk of fraud.
Despite the limitations of manual processing, some finance executives are hesitant to embrace new technologies because of their familiarity with manual processes or the fear of implementing new software. Leveraging new technologies to automate the invoice-to-pay processes can elevate your finance department and grow its perceived value with executive leadership.
Whether you’re curious about finance automation or are hearing about it now for the first time, we’ve put together this guide to help answer any questions you may have about AP Automation:
The Ultimate Guide to Accounts Payable (AP) Automation:
- What is AP Automation?
AP Automation software uses artificial intelligence (AI) and machine learning to streamline and automate the repetitive and time-consuming tasks that bog finance teams down.
2. How will AP Automation impact my company and staff?
- CFOs: Implementing an AP Automation solution allows finance leaders to reduce costs and increase visibility into cash flow with real-time data insights and reports.
- Controllers/AP Staff: By eliminating tedious manual tasks, AP Automation helps finance teams save thousands of hours annually. This empowers staff to spend time on strategic initiatives and high-value tasks that are most important to your business. Staff also can advance their careers.
3. What are the benefits of AP Automation?
Outdated processes can be detrimental to an organization’s financial health. Late payments, lost invoices, and fraud incidents can be the result of inefficient AP processes. More than 40% of the typical end-to-end Accounts Payable (AP) process is manual or paper-based2. The cost of inefficient invoice-to-pay processes adds up fast. Below is a list of benefits that come with automating:
- Increased efficiency: AP Automation speeds up invoice and payment processing times by 80%.
- Enhanced security: AP automation eliminates paper checks, significantly reducing an organization’s fraud risk. Invoice Automation creates tiered approval processes, meaning there is an evident segregation of duties. Lastly, multi-factor authentication ensures that unauthorized users can’t access vulnerable information.
- Greater visibility: Best-in-class Invoice Automation technology uses artificial intelligence to capture, read and route invoices, while giving your team a fail-safe electronic paper trail. Payment Automation also has expanded reporting capabilities, giving users more transparency through self-service reporting. This includes a payment history report, archived documents, and a payment status report.
- Reduced process cost: The average cost to manually process one paper invoice is an estimated $12.903. Invoice Automation reduces the cost of invoice processing by 60%-70% and payment processing by 80%-90%.
- Improved accuracy: 80% reduction in errors with coding and invoice exceptions.
- Improved vendor relationships: Late payments can strain relationship with vendors, but early payments paid with their preferred method of payment keeps your working relationship in good standing.
Now that you’re familiar with the basics of AP Automation, it’s a good time to ask yourself the following questions:
4. What are your biggest AP pain points?
Human errors. A high volume of check payments. Discrepancies and disputes. The list goes on and on. Identifying the pain points in your AP office and overcoming them is critical for success.
5. What are your goals for 2023?
Whether you’re looking to recession-proof your business office, reduce costs, snag early payment discounts, or improve efficiency and effectiveness, AP Automation helps you achieve it all.
Once you’ve identified what your pain points and goals are, you’re ready for the next steps:
6. Identify which AP Automation software best fits your needs:
Finance automation is growing increasingly popular. When searching for the perfect AP Automation provider, ask yourself the following questions:
- Does the solution seamlessly integrate with your existing Enterprise resource planning (ERP) system?
- Is this solution cloud-based and scalable?
- Does the solution provide access to a security team that goes the extra mile to help you mitigate the risk of fraud?
- Does the AP Automation provider offer white-glove customer service? What are their support request response times?
- How are payments delivered?
- Does the provider offer ongoing enrollment with every payment batch?
- Does the provider have a dedicated follow-up team to ensure that the vendor received a payment and applied it properly?
- Does the provider meet with me after implementing the software to ensure my success?
The best automated system will help you check all these boxes.
7. Discuss with your employees:
Change can be scary. It’s important to discuss AP Automation with your staff, and this guide will help you cover all the basics of automation. Most importantly, help your staff understand that partnering with the right automation provider means they are an extension of your AP team.
8. Schedule a demonstration:
Scheduling a demo with an expert allows you and your team to see Invoice and Payment Automation in action. It’s also the perfect time to ask any questions you or your group may have about the software.
Another thing to consider when implementing AP Automation software is the implementation process itself. Implementing with the right provider means onboarding is simple, straightforward process involving minimal time and resources.
From increased efficiency, enhanced security, and more fulfilled staff, it’s easy to see the benefits of AP Automation. Implementing new products can be intimidating but partnering with an award-winning provider makes it easy to transition away from overwhelming manual processes.
To learn more about automating AP with Paymerang, visit our website today.
1IOFM: How End-to-End AP Automation Drives Efficiency and Business Growth
3IOFM: The True Costs of Paper-Based Invoice Processing and Disbursements