While some enterprises look at the accounts payable function the same way they’ve seen it for decades, many organizations are modernizing and transforming AP into a strategic tool to gain advanced controls over the use of cash.
This transformation is possible using AP automation solutions to speed processes, optimize payment cycles and reduce manual labor by automating repetitive and error-prone tasks.
A significant barrier to success in AP automation is the myriad of paper and PDF invoices that demand manual handling and corrections. A company with manual invoice processing has a costly fixed relationship between the number of invoices processed each month and the number of employees in accounts payable. AP automation allows invoices to be handled automatically, breaking this costly dependency on people doing repetitive tasks.
With all this in mind, let’s take a look at the future of AP and why organizations wishing to unlock the true potential of their accounts payable department need to invest in AP automation solutions.
Envision a world where customer-supplier data is connected and the underlying AP automation platform automatically verifies and queues for payment invoices from suppliers without any human intervention.
This is the result of AP automation, which enables teams to make more informed decisions much faster than they can today. Not only does this mean suppliers will always be paid on time—and thus will be more satisfied—but it also ensures that payments will be made at the perfect times to take advantage of every early payment discount available while paying other invoices as late as possible to extend cash flow, all automatically.
Additionally, this shift will also have a meaningful impact on how AP staffs its teams. Instead of hiring a bunch of folks for operational purposes (e.g., approving invoices by hand), organizations can staff the AP department with workers who are more analytical and have a penchant for evaluating data and making decisions accordingly.
Add it all up, and AP becomes much more agile and is able to leverage real-time data, which enables you to make data-driven decisions in less time.
Reclaimed Time and Improved Collaboration
At most shops today, the bulk of AP staff is largely devoted to processing invoices. When a supplier sends in an invoice, someone in AP needs to look at it. When it doesn’t match a purchase order, they need to figure out how to resolve it by collaborating with internal stakeholders. If it’s not a PO-based invoice, someone needs to code it correctly.
When you’re running on manual AP processes, these activities can take a ton of time. On the other hand, when you use next-generation platforms, all of these tasks can be automated. All of a sudden, your team has several extra hours each week, and they can reinvest that time into improving collaboration with internal stakeholders.
For example, an AP analyst might notice a trend that indicates that more and more suppliers are offering early payment discounts. This information might be particularly interesting to procurement and the supply chain manager. At the same time, you might notice that items you’re buying tend to result in a delayed approval or that invoices don’t match receipts for actual shipments.
In either scenario, you may be able to nip a potential supply chain disruption in the bud by proactively addressing an issue before it causes your operations to grind to a halt.
By giving team members and suppliers access to a centralized portal that makes it easy to share data and send reports to colleagues and suppliers, AP automation transforms the collaborative experience, making sure that people have access to timely data when they need it. When everything is automated, teams get the peace of mind that comes with knowing they always have access to accurate, real-time data.
Every year, AP automation technology gets more sophisticated.
Today’s leading AP platforms automatically facilitate two- and three-way matching for invoices associated with purchase orders and receiving documents. As for what the technology will look like tomorrow, one thing that’s certain is that AP automation technology will become more and more powerful over time. Companies that invest in these kinds of platforms today will be better able to take advantage of new features as they get to market.
At the same time, companies that move to AP automation are able to shift from AP being an administrative function to one that’s more analytical. The sooner you upgrade your stance to AP, the faster you will be able to transform AP into a strategic department and staff it with analysts who can help you make the best decisions based on what the data’s telling you.
Taken together, AP automation puts your accounting department on the leading edge while future-proofing your operations to make sure you stay there.
Transform Your AP Function With Automation
For many organizations, AP is becoming less of a cost of doing business. More and more companies see the future and are rebalancing the weight from what has predominantly been a cost center and turning the AP function into a more strategic department.
When you’re ready to transform AP from an administrative to a strategic function, you’ll benefit from improved decision-making, increased productivity and streamlined collaboration—all while future-proofing your operations.
Which begs the question: Can you really afford to maintain the status quo?