For any business to succeed, having an efficient and accurate accounting system is very important. Those that have good accounting functions in place will consistently know their current cash flow position, stay current with vendors, and have an easier time remaining profitable during challenging times. To help your business stay organized, consider automating accounts payable processes. When trying to decide if it is a good option for your business, it is important to understand what AP automation is, how it can benefit an organization and what efforts are required to manage it.
What Is AP Automation?
Upgrading to automated accounts payable systems is something that a lot of different business owners will consider doing. Ultimately, an automated accounts payable system is a technology that is used to streamline the accounts payable system. These systems can collect invoices, create a system and process for making payments, automatically pay vendors, and integrate with banking and financial reporting systems. There is a variety of benefits that you can experience when taking advantage of an automated accounts payable system.
Benefits of Upgrading to AP Automation
Streamlined and Accurate Invoice Processing
One of the main advantages of accounts payable invoice automation is that it is a streamlined approach that can minimize human error. An accounts payable system will be able to identify the amount of the invoice and its due date. The system can then automatically make the payments to your vendors based on the invoice and your specifications. This can help ensure that you send the vendor the right amount of money and make payments on time, which can also eliminate some of the most common human error risks that come with paying invoices.
Another advantage of accounts payable automation is that it comes with very easy integration into your existing systems. Even if you have a manual accounts payable system in place today, there is a good chance that you have automated banking and financial reporting systems. An AP automation system will be able to integrate into and link with any systems that you currently use. This will help ensure that there is a smooth transition to your new system, which means your business and vendors will not have to experience any interruption.
Time and Cost Savings
For any business, being as efficient as possible is very important. For a company that does not have an automated system for their accounts payable, there is a good chance that they have a team of professionals who are dedicated to just that task. When upgrading to an automated system, you will be able to transition more of these people to other areas of your organization where growth is needed to support your operations. This can help to save human capital time, provide individuals with more opportunities, and ultimately save your company a lot of money.
Due to the competitive and fast-paced nature of the global economy today, all business owners and managers need to have real-time information about their company’s financial position. With an automated accounts payable system, you will be one step closer to achieving that goal. With the accounts payable invoice automation system, you can receive a real-time report about any open invoices you have, when they are due and what impact they will have on the future cash position of your company.
Better Vendor Relationships
Ultimately, when you have an automated AP system in place, it can help you better manage your vendor relationships. Few things make a vendor happier than having a customer that processes payments on time. When you use this system, the automated approach and lack of human error will keep you in good standing with your vendors. This good relationship could then be leveraged in the future for lower prices and even extended repayment terms.
How to Maximize AP Automation for Your Business
There are clearly many advantages that come when you upgrade your systems to incorporate an automated accounts payable system. However, the effectiveness and outcome that you have with the system will ultimately be up to how the system is used internally. There are a variety of tips that can be followed to help a company better manage their payables.
Use Consultation Services
One of the best things that a company can do to use their AP automation system to its fullest is to use the consultation services. Whenever you sign up for a new automation service, the provider will typically offer you a consultation service where they can come in and train you and your team on how to use the system. The use of this service will help to ensure that all people involved know how to use the system properly, which will improve accuracy and allow you to utilize all of the features that are provided. They can often provide ongoing support moving forward if you need a refresher training session or for troubleshooting.
Put Inaccurate Invoices on Hold
While an automated accounts payable system will be able to pay your invoices when they come in, it may not always be able to recognize if the invoice you receive is accurate. It is still important that you have someone check the invoices or payable records to ensure you are being charged a fair amount. If you notice that you have been overcharged in the past by a vendor, you can use the automated system to restrict payments to that vendor until you are refunded the appropriate amount.
The AP system will provide you with a variety of reconciliation reports. You should compare these reports to your bank records to make sure that your books are properly balanced and everything appears accurate. This process is a best practice that will help your business and that could even prevent fraud.
What to Look for in an Accounts Payable System
If you are looking for a new accounts payable system for your organization, there are a variety of options to choose from. There are a couple of key factors to take into consideration, and analyzing these should help you find the automated AP system that is right for your organization.
One of the most important factors to take into consideration is the integration capabilities. Ideally, you should find an automated system that can be integrated with your banking and financial reporting systems. This will help to ensure a smooth transition when you start using the system and will keep your company operating as efficiently as possible.
With any accounts payable system, you should look for one that can provide you with advanced reports. This should include giving you real-time AP system reports and other financial trend records. You can use this information to get an up-to-date glimpse at the cash flow position of your organization as well as get a sense of how your company’s spending may have changed compared to prior periods.
Automation is an excellent way to optimize your company’s accounts payable processes, saving you time and money, and helping to catch errors or areas of concern before they become bigger issues. If you’re looking for comprehensive AP services ranging from invoice processing to custom reporting, contact Checkissuing to discuss our accounts payable outsourcing services today.