While many corporations have adopted some form of automation to remain competitive in their respective industries, some are still reluctant to consider accounts payable automation a strategic priority.
Failure to examine the potential benefits of accounts payable automation is a costly mistake, which should be avoided. Here, is a quick look at the significant rewards of automating AP functions for your enterprise.
Manual accounts payable processing is time-consuming, labor-intensive, and susceptible to human error.
Assessing the Need for Accounts Payable Automation
Consider for a moment what your current accounts payable workflows involve. At a bare minimum, your accounts payable department:
- Receives invoices in a variety of formats from multiple vendors
- Reconciles those invoices with your internal purchase order system or a similar tracking mechanism
- Enters the invoice into your payables system, tying it to the corresponding purchase order
- Generates a vendor payment for the invoice
This process, though it may seem to be simple enough, is often fraught with difficulty. At best, it is a time- and labor-intensive process. At worst, it is a dilemma of bottlenecked processes.
Careful andhonest analysis of your current AP processes might reveal significant inefficiencies that accounts payable automation can easily address.
Benefits of Accounts Payable Automation
Accounts payable automation standardizes the way your enterprise handles invoices, purchase orders, and payments. What is the advantage of standardization?
Savings of Time and Money: Perhaps the most important advantage of standardization is that it enables a more streamlined process. For instance, standardizing and centralizing your invoice intake takes much time and effort out of the process. A payables system that can process invoices in multiple formats from a variety of platforms frees your payables clerks from manual data entry that often results in human errors. Thus, automation is a time-saving and error-reducing strategy for your enterprise.
CPORising.com notes: “Automating at least the front end of the process, invoice receipt and approval, can significantly reduce per-invoice processing costs and invoice approval time; this can result in enormous cost and process savings that can create more opportunity for AP to become strategically valuable to the greater organization.”
Improved Cash Management: In many organizations, accounts payable is the largest area of cash outflow other than payroll expenses. Automating accounts payable enables you to define cash flow objectives and manage the flow of cash through your system more efficiently and effectively. This results in increased accuracy for cash forecasting and the ability to create richer financial planning models.
Improved Data Analysis and Strategic Planning: Accounts payable automation, especially automation that integrates with your other business technology solutions, provides you with a depth of business intelligence that can be utilized for other business processes such as working capital optimization and supplier performance management.
AP automation rightly takes a seat at the table when it comes to your overall business strategy. Accounts payable automation helps drive collaboration between multiple departments within your organization, contributing to a more holistic way of handling procurement, supplier performance management, and financial forecasting.
Accounts payable automation streamlines processes.
The Bottom Line
Businesses looking to achieve and maintain a competitive advantage in the marketplace must assess their current operational strategies, including their accounts payable processes. Embracing accounts payable automation technology can save time and money, reduce both the incidence and effects of human data entry error, improve cash flow management, and contribute to the overall success for your organization.
Take a moment today to explore WEX’s electronic accounts payable solutions and learn what WEX can do for your enterprise!