While maintaining accounts payable, you will face numerous challenges, such as providing payment approvals on time, budgetary restrictions, ensuring policy compliance, and keeping the accounting system up to date. After some time, manual accounts payable processes become increasingly tedious and laborious to maintain.
Failing to manage the AP process can seriously affect the business by limiting the company’s liquidity and leaving insufficient cash on hand when they must seize fleeting opportunities. To thrive in this modern, fast-paced world, businesses need to minimize time spent on such activities and instead spend that time on executing business strategies. The best way to save time is by utilizing accounts payable automation systems to overcome issues in payables and, in turn, increase employee communication and productivity.
How to Automate Accounts Payable
Although every business must follow a system for accounts payable to manage invoice payments and processing, automating the same process will help you save time and money. Here are a few methods you can use for accounts payable automation.
E-invoicing is the New Norm
The primary step in your accounts payable process is receiving the vendor invoice or payment request. Since it is the initial step, it makes it more critical. One single misstep in invoice processing can plague the entire workflow. Therefore, it is essential to automate this process by shifting to E-invoicing exclusively. For this task, you will have to work with your vendors and client to process invoices electronically. You can utilize our invoicing system to cut down the paper clutter in the office, avoid losing important documents, flag important data fields, and categorize expenses.
Automate Data Entry
Data entry is the next most critical part of an accounting process. Automating bookkeeping and data entry and storing it in an accessible system such as a spreadsheet or CSV can facilitate an effortless and straightforward method for other departments in the company to increase profits.
Incorporate Vendor Portals
Using a vendor portal in the AP process will enable your vendors to quickly access a quote instead of going through the manual process of emailing and communicating with purchasing teams. With vendor portals in place, vendors can get discounts by setting up rate contracts and tracking statuses of deliveries in a single workflow.
Reduce Time Spent on Approvals
Sending approvals is the most time-consuming part of the AP process. If this aspect is handled manually, there will be significant snags and errors due to changing hands in responsibility. An automated AP workflow will create a seamless route for each invoice to reach the concerned party without any hassle. For instance, if an invoice for new inventory is generated, it will be sent to the individual who initiated the purchase order, then to the department head or manager, and lastly to the CFO or financial administrator for approval. Therefore, this method ensures everyone has clear data and an easy-to-complete approval workflow, passing it instantaneously to the next approver.
For automating the AP process, you should think of every process that is painful for you to conduct manually. Automating the AP process or outsourcing accounts payable will decrease the time spent on the process, reduce errors, and prevent fraud. Needless to say, it also ensures the numbers are accurate. You might feel it is a significant undertaking, but when you look at the cost-effectiveness of the accounts payable automation, it will not seem like a hard switch to help thrive your business.