The Benefits of Automated Accounts Payable Workflow

Since the dawn of business, service providers and merchants have had some sort of accounts payable and accounts receivable process. After all, business requires the exchange of money for goods and services rendered. After centuries of commerce, accounting continues to evolve to this day.

In fact, there are more ways to pay today than ever including: cash, check, credit card, wire transfers, PayPal, Apple Pay, ACH, EDI, and more. Field representatives can even accept payments directly on their smartphones using credit card readers that plug into their headphone jacks.

From an accounts payable perspective, invoices also come in from a variety of sources. For instance, some vendors may fax their invoices, while others send them electronically or via the postal service. Meanwhile, other invoices may be given at the time of delivery. The person responsible for accounts payable could have stacks of paper and faxed invoices along with an email inbox containing links to electronic invoices as well as invoices that will be paid via EDI. To further complicate matters, if you have branch offices, your invoices may be distributed first to local sites before being forwarded to your main accounts receivable office.

With so many options, it often becomes difficult to standardize accounts payable and receivable (Source: Accounting Web). This does not mean that automation is not possible. In fact, this is where automation shines. For example, using an automated accounts payable workflow, you can capture invoices from various sources such as email, fax, paper, scanners, and the Internet. Once captured, these invoices can then be validated and loaded into your SAP or ERP solution for invoice processing. Instead of dealing with multiple stacks and sources, your accounts payable team will have a consistent, automated workflow that makes their jobs much easier while also optimizing the payment cycle.

Why automate accounts payable? Below are a few of the benefits:

  • Easier process – You'll spend less time chasing paper invoices, searching for paper invoices, and dealing with paper invoices.
  • Productivity improvements – Not only is automation easier, it can improve productivity.
  • Shorter payment cycles – With automation, you can work more efficiently and shorten payment cycles. You can also pay invoices more strategically based on discounts for early payments and other incentives.
  • Improve approval times – Automation can streamline the entire process, including getting invoices approved.
  • Improved auditing and reporting – Automation creates an audit trail while reporting tools allow you to quickly see what's been paid and what's coming due.
  • Aligning procurement with accounting – Automated AP workflows can align procurement with accounting, resulting in a fewer delays and questions.
  • Eliminate duplicate payments – Automation can eliminate paying the same invoice twice.
  • Reduce fraud – Checks and balances are in place to reduce fraud.
  • Compliance – Automated AP workflows can help you to remain in compliance with various regulations and service agreements.
  • Improve relationships with suppliers – Automating your AP workflow means that your suppliers will be paid promptly and consistently, strengthening your relationships as a result.

According to Dolphin, its accounts payable automation customers have received substantial benefits including:

  • A 40 to 80 percent increase in operational productivity
  • A 40 to 60 percent reduction in cost per invoice
  • Practical elimination of human error
  • A 60 percent or more decrease in inquiry response time
  • Reduced cost

Accounts payable continues to evolve. Will you evolve with it through automation?

Works Cited:

1. Accounting Web, "Automated accounting for small; mid-sized businesses," – http://www.accountingweb.com/topic/cfo/automated-accounting-small-mid-sized-businesses



Source by [lakajira]

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