Leaning into the Strategic Role of Accounts Payable with AP Automation
Historically seen as a back-office function, accounts payable is increasingly recognized as the department that acts as the central hub for controlling spend management. As AP moves into a more visible role at the forefront of managing spend, those working in accounts payable have the opportunity to take on an increasingly strategic role.
If you work in AP, you don’t need this article to convince you how valuable your department is or how much you contribute to the company. You might, however, be wondering how accounts payable is going to be able to keep up with the increased demands being placed on it as AP takes on a more central role in your company. Or perhaps you’re trying to figure out how to convince others in the organization to value the contributions accounts payable makes.
Accounts payable automation makes it possible for your AP department to more easily take on a more central role. Automation gets a bad reputation sometimes as a thing that takes jobs away from real people, but the sort of process automation we offer does something different. It helps streamline and improve AP processing so that it’s easier for your employees to do their jobs. That frees up time for them to also take on more value-added tasks for your company, such as leaning into the strategic role that accounts payable can fill.
The Case for AP Automation
Whether you’re trying to keep up with increasing demands from elsewhere in the company or making a case for giving AP more responsibility, it’s vital that your accounts payable process works efficiently. Though the idea of automating AP makes some managers nervous it carries enormous benefits. When done right, automation saves your company money and makes employees’ jobs easier without displacing valued employees.
Even if you’re already working with an automated system, there’s a good chance it could benefit from an update. Many automated AP departments are working with outdated software or trying to manage AP through ERPs that weren’t intended to have the functionality required for accounts payable. Modern cloud-based automation software is cost-effective, user-friendly, and seamlessly integrates with your existing programs.
Making AP More Efficient
It’s all well and good to say AP automation will save your company money and make the department easier to run. But what, exactly, does automation do?
Once you implement AP automation, the software lets you auto-process up to 90% of your invoices. Cutting-edge data capture systems let the software log all the data on both digital and paper invoices into an easy-to-search electronic database. It also keeps track of metadata regarding the receipt of invoices from your vendors. You’ll get complete oversight into every detail of your invoices and dramatically cut-back on the need for manual data entry. You can click here to see a full description of NextProcess’s AP software.
In practical terms, the average company that switches from standard invoice processing to high levels of automation will see a 20-25% reduction in invoice errors. Compared to an organization that manually processes invoices, fully automated AP departments save an average of $14.93 per invoice. In addition, automation reduces the average cycle time for an invoice to just 5.4 days. Invoices connected to purchase orders can be matched and processed in 12 hours or less.
Accounts Payable’s Strategic Role
The change that AP automation brings has a profound impact on how your company handles accounts payable. Suddenly, you’re processing invoices more quickly and with fewer errors. That lets you make strategic moves such as negotiating early-pay discounts or extended payment terms with your vendors.
You’re also tracking more data about your cash flow and purchasing, and that data is much easier to sort and access. It only requires a few keystrokes to find any files you’re looking for. The system can also generate custom reports based on your needs. This gives you a rich resource for making AP more strategic. For example, you’ll be able to examine spend more closely for each category and vendor, giving you the information you need to make more competitive purchasing bids.
The ability to customize automation to fit your company’s unique needs also offers you the chance to control and track spend more closely. You can customize the software’s tolerances to automatically enforce your company’s policies. And if AP steps into the role of coordinating spend flow and starts working with the purchasing and procurement department, that opens up even more possibilities for strategic collaboration.
Inter-departmental Collaborative Strategies
Another, often overlooked, benefit to AP automation is that the software can communicate with other automated systems across your company. For example, if you use NextProcess’s software to automate both your accounts payable and purchasing, the software automatically matches purchase orders with invoices. If someone working with an invoice in AP wants to see the associated purchase order, all they need to do is click and they’ll automatically be taken to the purchasing program. That’s a lot simpler than if you’re using multiple unconnected programs to manage different financial processes in your company.
Another benefit of automating with NextProcess is that we don’t charge extra for adding more users. You can grant software access to as many employees as you want without seeing an increase in costs. Instead, pricing is based on the service you actually use each month (for example, how many invoices you process). Our software easily scales to your company’s needs, whether you experience a slow month or sudden growth.
If you’re ready to use automation software to enable accounts payable to take on a central, strategic role in your company, NextProcess can help. We have one of the highest successful implementation rates in the industry and outstanding customer service to support you in customizing our user-friendly AP automation. If you’d like to set up a free demo or to learn more about how our software modules can help, just click here to contact us.