The Best Guide for Accounts Payable Invoice Automation Solutions
As most finance teams are well aware, a manual accounts payable process may be arduous and error-prone.
Working through stacks of paper invoices, manually contacting key approvers, and sending checks is not only time consuming, but it also exposes the organization to fraud and makes audits more difficult.
Accounts payable automation (AP automation) technology attempts to make this back-end financial process more efficient, timely, and accurate.
It’s important that the accounts payable automation software selected can handle every Automated invoice processing situation in order to achieve complete automation of accounts payable and substantial time and cost benefits.
AP automation may strengthen your connections with suppliers and partners while saving time and money, reducing days sales outstanding (DSO), and boosting cash flow by removing manual procedures and piles of paper.
What Is Accounts Payable Automation
Accounts Payable is the accounting term for when a company buys products or services on credit from a vendor and needs to pay them back within a certain length of time (AP).
It is shown under “current liabilities” on a balance sheet when it is documented. The AP department of a company is in charge of transferring payments to other suppliers or creditors.
AP may act as a department in more significant firms, whereas it can merge payables and receivables in smaller businesses.
Aside from paying bills, AP also handles business trip costs for firm workers and executives, from plane ticket bookings to hotel stays. AP will fulfill payments and travel reimbursement claims once business travel has occurred.
Petty cash is held and distributed by AP and internal reimbursements for different company-related expenses. Employees must normally submit a log report and receipts for approval to earn a reimbursement. AP also handles sales tax exemption certificates.
Vendor payments, such as payment conditions, W-9s, and contact information, must also be managed. All pre-approved purchase orders and month-end aging analysis reports detailing how much the firm owes its suppliers and creditors are normally handled by AP.
AP’s other responsibilities include developing ideas and executing standards to assist the company saves money.
They may, for example, advise making payments during a promotional or discount period. AP may also be tasked with managing vendor connections and assisting in the negotiation of better pricing.
How Does Accounts Payable Automation Work?
AP automation software translates your suppliers’ invoices into a uniform digital format, then sends them via a digital process that ends with payment to the providers.
AP automation extracts information from invoices using optical character recognition (OCR) at the start of the process.
Some solutions employ machine learning to discover trends over time and enhance accuracy; for example, depending on previous experience, they may recommend specific general ledger codes or approval routes.
You may be able to remove the need for human intervention for most bills by creating rules for your firm, such as permissible variations or approval hierarchies.
To use AP invoice automation, you must first convert all vendor invoices—paper, PDF, e-invoice, XML, and so on—to a single common digital format.
An invoice scan and data capture or transmission via digital e-invoices may be used to accomplish this conversion. One of the most specific aspects of AP invoice automation is handling both supplier and expenditure invoices.
The program may classify and allocate expense-based invoices for approval to the appropriate individual. The configuration of the organization’s approval hierarchy must be set up in the solution before the invoice approval can be assigned.
With little or no human processing, and AP automation program can match supplier-based invoices with their corresponding purchase orders and GDRs (Goods Delivery Receipts).
AP invoice automation would allow for a touchless procedure in an ideal world, with payments approved automatically following invoice verification.
The Benefits Of Accounts Payable Automation
Especially, the best news is that you can automate the process of connecting POs to invoices and deliveries and monitor delivery timings and invoice payments.
When you automate your accounts payable operations, you save time by removing the need to process invoices several times. Not to add, you may make exceptions for billing errors simpler.
Your vendor connections will begin to bloom after this is completed. Here are some instances of how automation might be beneficial:
At any moment, get a more in-depth look at the larger picture.
Real-time reporting allows you to see KPIs at a glance, quickly identifying problems and non-compliance with corporate standards. Managers may also employ automation to verify that AP is operating efficiently. Transparency is brought to the forefront via automation.
Resolve concerns with auditing and compliance.
There’s no denying that audit preparation takes a significant amount of time. Manually doing this task entails sifting through paper files for approvals. Nonetheless, most industries are being more regulated by state, municipal, and federal governments.
Automation may help with compliance by automatically populating audit trails with changes, participants, and approvals. Consequently, authorized stakeholders may get the information they need to stay compliant promptly.
Streamline the procedure.
For example, you may eliminate human error across the invoice processing process, from capture to payment. As a result, you won’t have to devote as much time to monitoring. Duplicate payments and overpayments may be avoided.
All exceptions are noted right away. Budgeting, reporting, and auditing become more precise as a result. The AP department does not have to input and re-enter data into different systems.
An automation platform may reduce friction and interact with existing systems easily.
How To Automate Accounts Payable?
Firms often use AP automation software by adopting it in two ways. It is a software-as-a-service model, where the application is hosted in the cloud or on-premises, where companies want to host and control their systems.
Once a system is in place, financial personnel and approvers must be taught, and it’s worth taking the time to set up rules so that as many stages as possible may be automated.
While the AP procedure is very conventional, firms may have specific needs to ensure the solution can be fulfilled. This will give you the best return on your money.
Accounts Payable Automation With Medius
Your one-stop shop for expenditure management services If you’re looking for high-quality, simple-to-use spend management solutions, and Medius is the place to go. Select how much or how little you need to provide control and compliance to your organization’s spending.
Choose from among our expenditure management options, or implement them all for optimal efficiency and control. Procurement, Accounts Payable Automation, and Medius Spend Management is available via Medius.
Medius Sourcing, Accounts Payable Automation, and Medius Supplier Management is all available through Medius. Spend management software that is both comprehensive and adaptable in design.
Medius Spend Management is a modular software package that allows you to regain control over your spending habits. Their easy-to-use system automates time-consuming procedures, allowing you to be more productive across the procurement and financial operations life cycles.
The Medius Accounts Payable Solution helps organizations save time, enhance control, and boost productivity while reducing costs by automating invoice processing and payment.
For example, by removing the need for human data input and automatically computing discounts, the program may reduce the time and effort necessary to process bills. When discrepancies between invoices and purchase orders, it automatically manages the exception processing for them.
As an added benefit, Medius delivers real-time insights across the whole accounts payable process, reducing the likelihood of misplaced invoices or fraudulent invoice payments.
Companies looking to automate their accounts payable procedures should thoroughly research different AP automation options to ensure the best fit for their company.
Accounts payable automation software must handle all automated invoice processing scenarios to automate accounts payable and save time and money fully.
Medius is the best place to go among the thousands of accounts payable automation! and click here to go.