4 Ways AP Automation Is A Revenue Generator
Many finance executives view Accounts Payable as just a cost of doing business. While it is the department where money leaves the company, there’s more to it than that. Or there can be.
With AP automation, you can turn the AP department from a sinkhole for cash into a revenue generator. At the very least, you’ll be lowering operational costs significantly. Depending on the size of your company, Business Finance magazine estimates AP automation can save an average of $16 on processing costs per invoice.
1) Snag Early Payment Discounts
AP automation speeds up invoice processing so much that your company can leverage early payment discounts. When you can pay early, you’re in a strong bargaining position. There are quite a few suppliers out there who will negotiate a discount in return for early payments.
Even if you’re only getting a 1 or 2 percent discount on each transaction, the savings can really add up. Especially if you get discounts on things like office supplies that your company goes through on a regular basis.
2) Prevent Late Payments
When AP processing is being done manually, there’s a high risk of errors and delays. And that translates into more costly invoice processing on several levels.
Making late payments costs your company extra money in late fees. It also damages relationships with suppliers. On top of that, error-laden invoices can result in costly penalties down the road when it’s time to audit the AP department. Best to do things right the first time with accurate, timely AP software.
3) Improve Cash Management
Automation gives your AP department the tools they need to manage cash flow effectively. The same automated system that speeds up processing also tracks invoices and saves accurate, accessible records.
Real-time insight into invoice processing makes it easy to monitor where cash is going. As invoices go through the system, it tracks every change and event and stores the information in a searchable database. All the information needed to monitor cash flow and plan for future purchases is right at your fingertips.
4) Scale Employee Productivity
Employees in the AP department are often swamped with work. They’re expected to manually input invoice information, process invoices, handle exceptions, coordinate with suppliers, and keep a filing system in order. And with businesses trying to cut back on expenses, there often isn’t money in the budget for hiring more AP employees.
Automation reduces manual work, freeing up AP employees to focus on other things. They’ll be able to process more invoices, handle exceptions quickly, and spend more time improving relationships with vendors. Are you ready to put AP automation software to work in your business? Get in touch with us to schedule a free demo.