Accounts payable is the sum owed by a company to its vendors or suppliers for products and services received. As a result, it is critical for the seamless operation of any flourishing firm. Accounts payable management, on the other hand, is not easy.
Fortunately, automation has made it feasible for companies to process vendor invoices without requiring human interaction through a digital workflow to undertake tasks traditionally done by an accounts payable employee. A wide range of innovative and user-friendly accounts payable software is available today to assist in efficiently handling this critical activity. Many successful firms employ AP automation software to manage massive amounts of financial transactions between enterprises and their vendors/suppliers.
In this blog, we’ll understand what is accounts payable automation software and the benefits of using ap automation solutions.
What Is Invoice Processing Software?
Accounts payable is responsible for handling bills from vendors and suppliers from when they are received until they are paid and recorded in the general ledger. Invoice automation, often known as automated invoice processing, is the software’s practice of handling invoices. A flowchart for processing bills visually represents the procedures involved in handling invoices from suppliers.
What Is Invoice Data Capture?
Invoice data capture is the process of obtaining data from paper or digital invoices and is the initial stage in invoice processing for accounts payable (AP) departments. Businesses often employ optical character recognition (OCR) software to scan invoices and extract data for further processing or import into ERP systems.
However, AP departments may anticipate that invoice processing will develop as it becomes increasingly automated and knowledgeable due to the rising implementation of machine learning and artificial intelligence.
What Is 3-way PO Matching?
Invoices are only paid once verified against the purchase order (issued by an authorized individual), and the goods received note (or receipt) to ensure the products were delivered to the correct location. The agreed-upon price and the total number of products or services to be bought are detailed on a PO. A successful three-way PO matching verifies that the information in all three sources is the same. You may be certain that your package arrived safely with the delivery receipt.
The Benefits Of Automated Accounts Payable Solutions
1. Time Savings
When invoices are processed by business automation, less time is spent on the task overall. Remittances are instantly and automatically redirected to the appropriate payees based on the business procedures you define. If your company has implemented AP automation solutions, no one has to waste time looking for an invoice or trying to track down its approval status. When you use accounts payable automation software, you can be certain that invoices will never mysteriously disappear again.
2. Cost Reductions
Much time and money is wasted on administrative AP duties like data input and permission tracking. It may cost as much as $15 to process an invoice manually, but that cost can be reduced with accounts payable automation solutions. By speeding up payments and invoice matching and decreasing the manual labor required to complete these tasks, automation can save on expenses like document storage, postage, and more by as much as 83%. Likewise, it lessens the likelihood of overspending bills by accident or paying twice. Accounts payable automation software may flag duplicate payments, overpayments, and approaching due dates.
3. Better Collaboration
Using an invoice system, as many individuals as needed may work together on a single payable in real-time. Anyone with a stake in an invoice may view it from anywhere simultaneously to verify or dispute charges, ask questions, or provide explanations for inconsistencies.
4. Decreased Accounting Risk
With automation, you can track the status of your approvals and payments at any time. Typical AP fraud and threats, including overbilling, double payments, and fraudulent transactions, may all be readily monitored. You’ll have access to the necessary audit controls thanks to accounts payable automation solutions that are able to detect and identify duplicate invoices, additional charges, and other instances of potentially fraudulent behavior. You will not fall victim to the frequent AP dangers and frauds that tend to increase during times of crisis, including phishing scams, repeated payments, or using unauthorized suppliers.
Learn More About AP Automation
Keeping track of a company’s outstanding debts is critical to developing its reputation and propelling it to new heights. As a result, a company’s AP must be managed successfully and efficiently. Because handling accounts payable may be stressful and time-consuming, an AP automation solution is unquestionably a better choice. You can learn more on Rillion.
Feature Image Source: Rillion