5 Key Benefits of AP Automation Software

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Your accounts payable process helps you manage the steps it takes to collect, authenticate, and settle supplier invoices. And the aim?

It’s all so you can maintain quality supplier relationships, leverage early payments discounts, and avoid fraud.

But it’s important to keep in mind the tool that makes it all possible—accounts payable automation software. 

Accounts payable automation tools leverage the power of software to simplify the accounts payable process so your organization can manage payables faster and more efficiently. This frees up finance staff to focus on higher stakes work.

So, what are the benefits you stand to gain from adopting an AP automation software?

How exactly will it affect your day-to-day AP operations and help you achieve your organization’s bigger picture goals?. Here are the key benefits of switching to automated accounts payable solutions.

1. Time savings

Manual AP operations take up a lot of time.

Why?

It’s because the finance team is tasked with manually curating and interpreting information from the moment supplies are made by vendors, storing up that information, matching it to authenticate invoices, and then processing payments to suppliers.

As a result, AP specialists are burnt out, little AP work gets done on time, late payment penalties kick in, and AP work stagnates because everything is done manually.

And as long as you have a growing organization, the human cost of manual AP will always keep you from just hiring more hands down at accounts.

An automated AP solution changes all this. What it does in essence is to leverage the power of software to move data, process it faster, make accurate decisions at scale, and limit manual human input to the bare minimum.

Automated AP collects invoice & supply data, files it away appropriately, matches it with other important documents, and helps issue supplier payments at scale.

As a result, you reduce your AP headcount to the bare minimum, save on human costs, eliminate late payments fees, and build a more agile organization.

2. Capital savings

It’s often in the big deals with the mega savings that the most money is made. But it’s in the hundreds and thousands of microtransactions across your organization’s procurement system that the most money is saved.

For example, without an automated AP system, a slight uptick in business volume will mean that more AP work is flowing to your team. Lapses start to appear, and invoices start getting paid late. And this constitutes a double loss.

Most cashflow-sensitive businesses use discounts (ranging from 1 – 2%) to incentivize early payments and charge interest on late payments. So, as manual operations slow down your invoice processing, you’re losing out on potential savings while racking up fees for late payments.

Automating your AP operations gets invoices processed at a rate with which you’ll steer clear of late payment fees and make the most advantage of early payment incentives.

3. Agile operations

Companies that automate their AP operations move faster with various tasks such as:

• faster invoice processing,
• faster file sharing,
• less latency for matching accounts payable data, and
• a significantly lower rate of delinquent supplier relationships.

Automated AP offers you an unfair advantage as you can start working with accounts payable collateral (invoices, payment orders) the moment they’re submitted without any of the lag you’d have to deal with in a manual, human-managed system.

4. Eliminate fraud

Barely 7 years ago, Google and Facebook lost a combined $123 million to an invoice scammer.

How did he pull it off? He simply sent Facebook and Google’s account departments bogus invoices for services that were never rendered. And CHA-CHING! Paid.

While that’s quite an embarrassing one, what’s scary is that your company could fall victim to the same if you still use manual methods for authenticating invoices.

As long as the human factor is concerned, a few figures here and there will probably get overlooked. Worse, you could have a saboteur facilitating invoice fraud within your company until it’s too late to do anything about it.

With an automated AP solution, you can leverage the power of software to scrutinize invoices, receipts, and supply orders more stringently to reduce the margin of error for invoice fraud.

Leveraging an automated solution can knock down error rates on invoice processing, helping you sift out any opportunities bad actors may seek to exploit.

5. Real-time visibility and controls

The biggest downside of anything manual is that in most cases, you don’t get to see anything until after it happens.

Say, a supplier submits a bogus invoice overstating the supplies they made, it’ll be hard to detect if you’re processing invoices manually until maybe after you run a routine book check. At which point it might be too late to recover your lost funds.

Likewise, manual processes are harder to visualize end-to-end in real-time; to do that, you’ll have to slow things down to a crawl, either sacrificing visibility and controls for speed or vice versa.

That’s another big downside of manual AP operations. You don’t see how the money flows most often until it’s out of the door. And if you can’t keep track of company funds, how can you control it today and not at month’s end?

Automated accounts payable is built with software that offers end-to-end visibility and controls so that your company’s AP controllers can have a 360 degrees’ overview of how the entire process is unfolding and be able to put a hold on certain transactions they deem suspicious.

Accounts payable automation offers dynamic visibility and controls that put the entire procurement system at your fingertips and helps you manage how supplies and cash changes hands between you and your suppliers.

Automated AP collects invoice & supply data, files it away appropriately, matches it with other important documents, and helps issue supplier payments at scale.

As a result, you reduce your AP headcount to the bare minimum, save on human costs, eliminate late payments fees, and build a more agile organization.

Conclusion

Zooming out, it’s no question that accounts payable automation gives you an advantage over the competition.

So, the question isn’t if you should invest in it, but, given the huge number of AP automation tools on the market, which one you should invest in.

Among others, AP automation:

• empowers your organization to be more agile,
• eliminates invoice fraud,
• helps you visualize how supplies come in and how funds flow out to settle for them, and
• saves time and money spent on procuring supplies.

And to leverage all the benefits it offers, it’s important to choose an AP automation tool designed with your needs in mind.

Kissflow Procurement Cloud is designed to streamline your AP from the moment supplies are delivered until invoices are processed—with every dollar accounted for. Kissflow offers:

• dynamic product catalogs,
• powerful invoice processing,
• early payment features for saving on supplier invoices,
• digital payments tools,
• tax settlement, and
• integration with the tools you already work with.

Kissflow empowers you to leverage all the benefits of AP automation so you can manage AP better, delight your suppliers, and win over more business. Learn more about how Kissflow Procurement Cloud can transform your AP here.