Posted By Ash Conversions International
While many companies still process their accounts payable manually, automating the process offers a huge opportunity for accounting teams to modernize their businesses.
As technology continues to advance and automation becomes the norm across multiple sectors, continuing to process accounts payable manually no longer means maintaining the status quo, but potentially falling behind.
Companies are now using automated accounts payable workflows to change the way they communicate with their vendors, manage their internal finances and, more closely control their cash flow.
Let’s look at a few of the ways accounts payable workflow automation gives you more control of your cash flow.
Making payments on time is crucial to maintaining good relationships with your vendors. But the advantages of paying invoices on — or better still, well in advance of — their due date goes beyond just keeping your vendors happy.
Because accounts payable automation captures all relevant invoice information, and also includes invoice approval, your accounting team has everything needed in one place to streamline the payment of recurring invoices.
This frees up your team’s time, allowing accounts payable staff the time to perform more analytical tasks, such as analyzing spending trends.
Automating your payments also allows your organization to take advantage of any early-pay discounts offered by your vendors while hanging on to your money as long as possible before it is due.
This not only provides your accounts payable team with better control of cash flow, but could potentially help them save your company money.
While taking advantage of early payment discounts may not always be appropriate for your business — sometimes it makes more sense to keep cash on hand for an extended period of time — knowing exactly which discounts are available and what their deadlines are can be extremely advantageous to your team.
Becoming more aware of any early payment discounts allows your team to optimize short-term cash flow, and of course, take advantage of any available discounts that make sense for your business.
Automated accounts payable systems provide this information as part of the vendor payment process, allowing your team to see it when they process and pay an invoice, so they never have to miss out on an opportunity to take advantage of the discount.
Manually filling out and retrieving documents takes time—and often, a lot of it. This extra time adds a burdensome cost to your business that’s both unwanted and unnecessary.
Studies show that the average office worker spends somewhere between 40 to 60 percent of their time handling paper, accounting for anywhere from 12 to 15 percent of a business’s expenses.
In addition to that ongoing cost, finding a misfiled document costs $120 on average, while re-creating a lost document costs $250.
Switching to an automated accounts payable system eliminates these costs (not to mention their associated headaches). With an automated system, you can seamlessly process both hard copy documents and digital invoices, making it easier to keep track and reduce the costs associated with accounts payable.
One of the biggest obstacles to controlling your cash flow is the disorganization that’s inherent in a manual or decentralized accounts payable process.
For instance, one common error that’s all too easy to make is to pay the same invoice twice. This happens when it’s possible to pay invoices from multiple locations, rather than through one centralized place.
Once mistakes of this nature are made — if they are identified — your accounts payable team then needs to dedicate substantial amounts of time to reconcile the error, pulling them away from more valuable tasks like cash flow management, and costing your business a significant amount in lost time and productivity.
With an automated accounts payable system, mistakes like this seldom occur, and when they do, fixing them is quick and easy. Automated solutions centralize all vendor payments into one system, making it highly unlikely that the same invoice will be paid twice. And should a mistake occur, the system offers duplicate invoice detection that allows errors to be identified and corrected before the payment is made.
Minimizing errors not only helps more invoices get paid on time, but it also frees up your team to focus on more valuable and important tasks.
In summary – by implementing an automated accounts payable system, your organization will not only gain more control over cash flow, but your AP team will also become more productive overall, saving your business money as a result of the efficiencies gained through automation.
For more information on implementing automation into your accounts payable process, call Ash Conversions at 1-800-719-9621 or contact us here.