7 Benefits of Automating Your Accounts Payable Process
Accounts payable is an infamously tedious process. For many cities and local governments, it can be downright overwhelming, especially for those with an overburdened finance department. If your organization is getting bogged down by the flow of vendor invoices and checks, automation could be the solution.
What is automation?
Automation is using software to automate a process—in its entirety or certain parts of it. When it comes to accounts payable, automation can streamline everything from the collection of invoices to the processing of checks. Here are seven benefits of automating your organization’s accounts payable process.
Easy access to and sharing of invoices
Traditionally, the collection and distribution of invoices throughout an organization has left a paper trail—one that can be hard to follow or pick back up in the future. With automation, paper invoices can be scanned into or emailed directly to your software.
This electronic record can then be immediately accessed and easily shared by managers. When it’s time for the annual audit, it prevents staff members from having to manually scan invoices to provide samples.
Because automation software actually “reads” the invoice (number, date, amount, etc.), it reduces the time staff must spend doing manual data entry. As a result, it also minimizes the potential for errors, particularly inaccurate coding.
Better visibility of invoice approval
One of the most beneficial aspects of automation: it creates a workflow that seamlessly moves invoices from one person to the next. In other words, invoices are electronically routed for approval and general ledger coding. This enables multiple people to approve various parts of an invoice (e.g., different supervisors can go in and approve at different levels).
Automation software can even create a report that shows the invoice went through the proper approval process—beneficial for both your staff members and auditors.
This heightened visibility allows your staff to better manage the accounts payable workflow. Most important, they can easily see where an invoice is in the approval process, which can be helpful when up against deadlines for board packets. (Your finance person can remind department heads to approve.)
Less of a chance for lost invoices and late payments
With automation, invoices can no longer be lost going from desk to desk, helping to prevent late payments. Typically, after the invoice passes final review, its information is imported into software to create a payment batch (i.e., invoices ready for payment). Note: Some systems may allow for direct integration, which would eliminate the need to import.
The payment batch not only eliminates the need for manual entry into your current accounts payable system but also allows for oversight—another critical control. With your ready-to-pay invoices in one place, a check cannot be processed without your finance staff’s knowledge. Some automation tools will even assist with back-end payment processing via check, electronic payment, or virtual card.
Revenue-sharing potential with virtual card payments
Automating your back-end accounts payable processes gives you the opportunity to set up electronic card payments, which may allow your organization to earn rebates.
More time for critical projects
As you can see, automation offers a host of benefits for your organization’s staff as well as its vendors. Most important, it can keep staff members from getting overwhelmed, allowing them to focus on critical projects.
If you’d like to explore how automation could benefit your organization, we’re here to help. We can guide you in finding and implementing the software platform or combination of platforms that works best with your current data systems and needs. We walk beside you throughout the process, making sure it works for you and offering support. Contact us to learn more.