What Does A Modern Accounts Payable Department Look Like After Automation?
It’s nearly impossible to run an accounts payable department in the modern world without hearing about automation. You’ll see all kinds of articles and reports saying automated AP software is one of the best tools you can use to make the accounting department more efficient and easier to manage.
But if you haven’t started automating yet, you might be wondering whether or not AP is really worth it and how much automation will change things. In this article, let’s take a look at what your accounts payable department could look like after you’ve decided to implement automation.
A Small AP Team
Automated accounts payable departments are easy to manage. Some organizations find that they only need one or two people working in-house to run things. And since the AP automation system scales to your needs, you won’t need to immediately hire extra help if the workload increases.
Fast Data Entry
Once you automate your AP department, it’s easy to get data into the system. No more manual data entry and all the errors that go along with it. Instead, the system uses image indexing technology to capture all the information from an invoice. This happens automatically for email invoices. Paper files are easy to scan into the system.
Manual data entry is riddled with human error. Even simple image capture technology isn’t flawless. But with the type of image indexing that comes with NextProcess AP automation, you’re guaranteed over 99% accuracy on every invoice. The invoices also come into the system in an editable, searchable form that is easy to work with.
Speedy Invoice Processing
Automation makes the average number of invoices you’re processing per AP employee increase by five times. In other words, if you’re normally processing 50 per employee in a month, automation means you’ll process 250 per employee. You’re not only processing invoices more accurately with automation. You’re also processing them more quickly.
At Least 80% Automated
Most automated AP departments follow the 80/20 rule. They’re happy if about 80% of the invoices go through their automation system without outside interference. That leaves AP employees with the time they need to process the other 20% efficiently. With NextProcess, you can get up to 90% fully automated, depending on your settings and the number of exceptions invoices coming into your organization.
Most of the invoices that enter your system get processed without the help of a human employee. And even the invoices that do need some extra help getting through the system are easier to handle. Your employees can use the same tools that make automation so easy to process exceptions invoices. Most of the time once they double-check a flagged invoice, the system can finish processing automatically.
More Money Saved
Automation helps keep costs down in several ways. Because you’re processing more invoices per employee, the processing cost-per-invoice goes down. The system also makes sure you make payments before the deadlines, which means no more late fees. And because you can process invoices so much more quickly there’s a chance you can negotiate early payment discounts with your suppliers.
Tough On Fraud
While automation isn’t enough on it’s own to stop fraud, it can help you catch accounts payable fraud before it becomes a costly problem. Built-in features let you set up the system to automatically alert the AP team to duplicate and near-duplicate invoices, invoices just under the approval threshold, and other warning signs that someone’s trying to defraud your company.
All the information about every invoice passing through an AP automation system is stored as part of a digital file. This documentation process happens automatically. And that means there’s no chance of someone forgetting to log information about an invoice or making a filing error.
Easy Information Access
All the information stored by your automation system is really easy to access. Since the system updates in real-time, you can check on the current state of any invoice with just a few clicks. This gives you increased oversight into the current state of AP in your company. And you can easily search records for past invoices as well. This accurate, easily accessed documentation makes audits much easier.
More and more companies want to make payments with corporate credit cards. Using these cards can lead to cash rebates and cut-back on the risk of fraud. Finding suppliers who will accept this payment method can be a challenge, though. A recent survey found that only a little over 40% of companies can make at least 10% of their B2B payments on corporate cards. But that number increases to nearly 80% when companies are using automation in accounts payable.
Work With Other Departments
An automation system makes it easy for accounts payable to work with purchasing and receiving. You’ll be able to automate 3-way matching by setting up the system to match certain types of invoices with purchase orders and/or goods received files. And if you go with a company like NextProcess, which offers a software suite, you can automate your purchasing system with us as well.
Influence The Entire Company
Modern accounts payable departments aren’t just where the bills get paid. They’re instrumental in managing cash flow, maintaining good vendor relationships, and streamlining audit completion. This makes them vital to the success of the company. And since automation makes the AP department run more smoothly, it’ll make AP that much more valuable to the entire organization.
If this type of accounts payable department sounds good to you, get in touch with us at NextProcess. We offer Accounts Payable Automation Software that’s fully customizable to your needs and which will integrate with your existing ERP(s). And we’ll be there for you through the full implementation process to make sure your new software is working perfectly for your company. Contact us today to get started or schedule a free demo of our AP system.