The Importance of Automating the Accounts Payable Process

Posted on 8th Oct 2018

Improved Ease and Process Efficiency

Article By: Microsoft

You may not realize it yet, but paper-based processes lead to sinking

AP processes and business. The accounts payable department is filled with manual workday pains making it impossible to streamline payment processes. Most accounts payable departments spend half the workday on manual AP tasks. PayStream Advisors’ 2018 Payables Insight Report pointed out 48 percent said manual data entry is one of the top payment processing pains. When employees are forced to handle invoice, paper checks, and Excel spreadsheets manually, companies are putting themselves in financial danger. There’s plenty of room for duplicate entries, data errors, and missing critical compliance steps.

Best-in-Class businesses are relying on e-invoicing solutions for a smooth and efficient paper-free payment process. With AP automation solutions, your company gains significant processing benefits including:

 

  • Regardless of how the supplier sends the invoice, all of your company’s invoices are stored in one portal to electronically review, route, and approve with the click of a button. The invoice data details are automatically extracted coded, and assigned to the right workflow, saving your team time while ensuring accuracy.
  • Spend less time juggling your vendor’s preferred payment type. Service is available to verify payment methods and information on your behalf. Your team can focus on improving other critical processes instead of spending hours replying to vendors’ payment inquiries. Vendors will have access to a portal to check the status of invoices and payments electronically.
  • Processing invoices and payments are less time consuming and costly. Without paper, payments and invoices can be processed faster with the freedom to approve anytime, anywhere with a network connection. When you’re on vacation, rules can be established to reroute approvals so business can continue as usual automatically.

 

The Simple Solution for Scaling for Growth

As your business grows, spending time and money in the right places is critical. Ardent Partners shared the 2018 ePayables Benchmarks for AP processing time and costs. Today, organizations are paying $11.57 and taking over eight days to process a single invoice. Best-in-class businesses are only spending an average of $2.50 and three days to complete the same process. The leading reason for the big savings difference is automated solutions.

On average, companies reduce AP and payment processing costs by 60% with AP automation - making it the perfect solution for scaling for growth. Instead of relying on your employees to handle mundane, manual payment tasks, they can spend time and energy focusing on financial functions that matter to your business the most including:

  • Easily preparing monthly and quarterly financial reports with ease.
  • Gain better insight into what your company is spending the most on, how frequently, and why.
  • Prepare for taxes and audits ahead of time without piles of paper and filing cabinets.
  • Building stronger relationships with your vendors for discounts and product pricing.

 

The key to scaling for growth is to maximize profits while minimizing spend. It’s nearly impossible to scale for growth with manual AP and payment processes that are manual and prone to costly errors. The biggest takeaway is automating when possible saves time and money for projects that will advance your employees’ career goals.

 

Controlled and Secure Payment Processes

Here’s the deal - without the right processes, your business’ finances can spiral out of control. Trusting internal security measures, paper processes, and manual steps can do more harm than good. Here are a few statistics from the Association of Financial Professionals (AFP) to keep in mind:

  • Payment fraud has skyrocketed. In 2017, fraud reached an all-time high with 78% of surveyed organizations impacted.
  • Checks are still the top target for scammers. According to the report, 74% of organizations reported their check payments were targeted.
  • Emails are the top fraud method. 77% of companies were targeted through Business Email Compromise (BEC). Surprising, executives weren’t the only target. Anyone is a target - including AP specialists and controllers.

 

The only way to effectively fight fraud is to implement automated processes. The biggest problem with home-grown security measures is they’re not regularly updated to cover all security concerns. Trusted automated solutions handle each payment with care and the right compliance steps regardless of payment size.

AP automation fights payment fraud a few ways. For starters, vendor verification for each new vendor ensures the proper tax documents and compliance forms are in place. Many automation solutions store a master vendor file electronically. Keeping the master vendor file free from duplicates or inactive vendors reduces the likelihood of mistaking scammers for vendors.

Automation also allows your company to set up rules that work best for your company. You can electronically require a second approver on certain payments or even enable master vendor file access to specific employees.

Most importantly, when it boils down to payments, AP automation includes ‘Positive Pay’ - an automated fraud monitoring system. Positive Pay generates reports for every paper check payment made. Each report screens for duplicate invoices and fraud attempts automatically.

With AP automation, fraudsters don’t have a paper trail to trace back to your payables. Even though manual, internal processes may seem like the best bet for your business, there’s less visibility and control. Lacking these payment essentials makes it easy to overlook the fraudster’s attempt to hack accounts or proprietary information that could cost your company a fortune.