Account Payable (AP) automation refers to the processes that automate the routine tasks of accounts payable, thereby eliminating the need to do them manually. It is usually associated with a term called “touchless” processing, wherein the manual input of data is replaced with automation.
There are dedicated software for AP automation like Yooz that allow one to approve and submit invoices and purchase orders digitally. This software also provides analytic tools to help manage AP processes and perform problem diagnoses. Since all the information is digitised and stored in a single system, the audit and search for any kind of data becomes relatively easier.
Benefits of AP automation
If implemented efficiently, AP automation can benefit organizations in the following ways-
- It saves time by automating slow repetitive work like data entry and checking purchase order forms.
- There are fewer errors as computer programs are able to repeat tasks endlessly without fault.
- Reduces unnecessary expenditure and reduces cost.
- It digitizes all paper documents by default.
- It increases productivity by allowing teams more time to dedicate to important work.
- Allows greater accessibility to documents from any place.
- Uncovers data that allows one to make informed decisions.
- Strengthens vendor relationships and increases policy compliance.
Which tasks to automate?
Now that you have decided to automate tasks, it is important to determine which tasks you wish to automate.
1. Receiving Invoices and categorizing them
The process of receiving invoices may sound deceptively simple, but actually involves a lot of steps. This is because the vendors can send invoices through a number of different methods like mail, fax or even “snail” mail. And before the data from these invoices can be fed into the systems, they need to be categorized first. The process of data entry is also very time-consuming. This entire process can be simplified with the help of AP automation, in which new invoices and categorized automatically.
The invoices need to be sent to the right person for approval and verification, which is simplified if done with an AP automation software. The software remembers the approval workflows and routes them accordingly, thereby saving the organisation valuable time.
3. Coding and data capture
AP automation software can code and categorize invoices quite efficiently, and with no errors. This is accomplished by reading code via optical character readers (OCR) and intelligent character recognition (ICR) technologies.
4. Verification of invoice
Before the payment of an invoice can be processed, it needs to be verified with other documents like receiving reports and purchase orders (PO). The process of matching the keywords, categories and specific amounts is easily accomplished by AP automation technology. The software does not only examine and analyse all the information on the invoice bill, but also compares it against previous invoices to spot anomalies.
5. Payment inquiries from the vendors
AP automation can be used to give the vendors easier access for tracking the payments. Organisations can use electronic vendor portals to allow the suppliers to log in and check the progress of invoices.
Using AP automation will help create faster, leaner and more cost-effective workflow management systems. It will allow organisations to plan better, and also discover new opportunities for growth in the process.