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10 Compelling Reasons To Automate Accounts Payable
The accounts payable department is one of the most important in a business, yet also one of the hardest to optimize. Many companies overlook its importance or simply don’t know how to leverage AP’s potential.
Accounts payable automation software can change that. Automating the AP department instantly increases efficiency. It transforms accounts payable from the place where money leaves the company into a department that supplies key financial information, improves cash management, and streamlines record keeping.
Some companies are hesitant to update accounts payable. It doesn’t always seem like the highest priority when choosing which departments to digitize. And besides, the current system seems to be working just fine, at least for the most part, so why change it?
In today’s business world, though, the benefits of going digital and using automation aren’t something you can afford to overlook. For most companies, the question is no longer whether or not they’re going to go digital but when. You don’t want your company to get left behind.
Of course, you don’t have to digitize just because that’s what everyone else is doing. In fact, there are plenty of reasons to digitize your AP system that will add value to your company. Here are 10 compelling reasons to make automating accounts payable a priority for your company.
1) See The Big-Picture
Having one central software platform that manages all your accounts payable information provides unprecedented visibility and control. Getting a big-picture view of everything going on in the AP department has never been easier.
Real-time processing means you can assess company performance instantly rather than waiting for reports at the end of a processing cycle. And not only will you enjoy real-time access, but you’ll also have easy access to information going as far back as the system does. Plus, you can digitize records that date back from before implementing the automated system and make them easier to search and use as well.
2) Support Strategic Decisions
Being able to look at the current state of your accounts payable department makes it easier to see where your money is going. And that means you’ll have access to the type of information that enables strategic decision making. The more up-to-date and accurate your data, the more informed your decisions can be.
Most automatic AP systems are equipped with tools that let you sort the information you’re looking at by customized categories. This helps you avoid information overload and find the exact data you need to make a decision. Now, you’ll have the information you need to create budgets based on real facts and reliable data instead of guesswork.
3) Save Money Per Transaction
Cost-per-transaction is typically high in manual AP departments. The bulk of that cost comes from paying employees for their time to process each invoice. By speeding up processing with accounts payable automation, your company can save quite a bit of money. In fact, Business Finance magazine estimates that AP automation can save an average of $16 on processing costs per invoice.
In addition to saving money in processing, automating accounts payable means no more late payment penalties. The software system will keep track of payment deadlines and make sure everything is processed on time. And since you’re processing invoices so much faster, you can often negotiate for early payment discounts. So not only does the system prevent you from losing money, but it also enables extra savings on top of that.
4) Improve Cash Management
Accounts payable automation speeds up processing, saves money, and provides more accurate up-to-date financial information. Those features all play into improving the bottom line for your company and make managing your accounts payable cash flow much easier.
There are several ways that accounts payable automation enables improved cash flow management. For one thing, you can see exactly where the money is at any given time. Automation also makes it easier to evaluate your suppliers and negotiate payment terms. With AP automation, you’ll always know how much money is leaving the company and you’ll have the tools to predict future cash-flow patterns right at your fingertips.
5) Get Accurate Information
A manual system always carries the risk of human error. We all make mistakes. Problem is, even a simple mistake like mistyping one number or leaving a bit of information out can compromise the entire document. If you’re using spreadsheets, the question isn’t, “Do they have errors?” but “How many errors are there?”
Accounts payable software automatically captures incoming invoice information with over 99% accuracy. Any electronic invoices received go straight into the system without any other intervention. For paper invoices, simply scan them directly into the system and they’ll be processed just like the other invoices. This eliminates the vast majority of errors that could show up with manual AP processing.
6) Increase Security
The increased accuracy and visibility available with an AP automation system provides another key benefit. It reduces fraud. The system automatically catches suspicious and duplicate invoices, routing them for a human employee to take a closer look. You can also set up custom tolerances to flag invoices over a certain amount or that are near-perfect matches to existing invoices.
Accounts payable software is also secure from outside tampering. At NextProcess, we understand how important it is for your company to keep financial information safe. We’re an SSAE-16 and HIPAA Compliant provider with extensive security protocols to protect your data. Of course, digital technology isn’t your only line of defense against cybersecurity breaches and other threats. But it can play a big role in supporting cybersecurity efforts within your company.
7) Provide Faster Service
Automation software dramatically speeds-up your invoice processing. That means you can provide your suppliers with faster turnaround times as well. No one appreciates it when their payments don’t show up on time. But they’ll love it if you always pay on time or even early.
Some AP automation solutions, including NextProcess’, also makes it easier for your vendors to interact with the accounts payable department. These systems let you give your vendors controlled access to so they can check payment status quickly, submit missing invoices, and update their own information. Letting vendors help themselves reduces your AP department’s call and email volume and makes things easier for your suppliers as well. It’s a win-win.
8) Enable Operational Flexibility
Accounts payable automation systems are highly configurable. You get to set up the system to work with and automatically enforce your company’s custom policies. And with NextProcess, paying for AP automation service is flexible so your company only gets charged for the services you use.
In addition, a cloud-based accounts payable system allows for employee access from any location at any time. They just need the right password and permissions, and they’re ready to go. Constant accessibility means you can pull up information when you need it, where you need it. It also lets supervisors issue payment approvals on-the-go.
9) Reduce Clutter
Manual invoice processing generates paper records. Filing all these records can take up huge amounts of storage space. It also takes a toll on the environment by generating large amounts of paper waste. Automating accounts payable means your company is using less paper. And that’s good for the environment and for your budget.
In addition to reducing paper waste and clutter, the digital records you’re now keeping have several advantages over paper records. It’s easier to keep backup copies and you can store huge amounts of data in a very small space. Digital files are also more secure from risk of fire or water damage.
10) Install Effortlessly
As if all these reasons to automate the accounts payable department aren’t compelling enough, AP automation solutions are very easy to implement. It’s as simple as signing up for the service and installing a program to employee computers. There’s very little downtime during the transition period and the new programs are easy for employees to learn.
If you choose NextProcess, we’ll help you implement your new AP solution and make sure everyone who needs to know how to use the software is up to speed. Unlike many companies in the software industry, we have a near-perfect implementation rate. The pitfalls that cause so many other software implementations to fail aren’t an issue with NextProcess. We guarantee that we’ll follow-through on our promises with customer support you can rely on, both while we’re setting up your system and for the entire time you use it.
Before you commit to choosing NextProcess as your accounts payable automation provider, we’d like to give you a free demo so you can see first-hand how AP automation will help your company. Just click here to contact us for more information or to schedule your demo.