For an accounting department for any company, big or small, the two key responsibilities include maintenance of accounts payable workflow with timely invoice generation and processing. At present, the majority of the companies are using manual task managers to supervise and execute these two major responsibilities. However, now with the introduction of various cloud technologies, the option of automating these responsibilities is also available. But can automation in the overall accounts payable process be more useful in the long run? Let us discuss below how automating accounts payable and invoice processing can effectively save time and money for the company.
Top Advantages of Automation of Accounts Payable
Reduction Of Labour Cost
Human resources are the most essential assets for businesses as they are the key contributors to building the root foundation of an organisation. However, manual invoice management is no longer a compulsion in the accounts payable process. By automating accounts payable invoice processing and payment, the requirement of human touch for downloading attachments, entering data, generating purchase orders, account reconciliation, etc. is reduced by almost half. This in turn reduces the need for manual labour work, effectively bringing the human labour cost down significantly.
Increase In Productivity
For manual invoicing, the common procedure includes the following steps:
- Invoice generation by the vendor and then shared with the business
- Business prints invoices and enters data of the invoices before final review
- Business approves invoice and processes it for payment via manual creation of cheques or bank transfers
- Supplier vendor is alerted post payment
All these steps have sufficient room for error and because of the intense interconnectivity, one small mistake can lead to major delays overall. However, by automating invoice management with the help of softwares like BautoDocs by Bautomate, businesses can eliminate most of the steps required in the process. All they need to do is let the software extract all necessary data from the invoices through an invoice capturing feature and streamline the accounts payable process in a manner that can increase the company productivity by a minimum of 40% and reduce the invoice process time to a maximum of 7 days.
Low Scope of Payment Errors and Delays
One main purpose of proper invoice management is to ensure timely and correct payments are made against vendor invoices. However, as a company grows, the requirement of invoice processing increases simultaneously. This leads to added pressure and burden for the manual task managers responsible for this. By automating accounts payable invoice processing by well-equipped softwares like Cognitive Content Capture by Bautomate, businesses will be able to monitor and match 2-way purchase orders, which is necessary for accurate payment calculation. Moreover, as these automation softwares offer advanced OCR, ICR and IDR technology, the time taken for invoice recognition and payment is reduced greatly. Overall, this adoption saves time needed to rectify payment errors and avoid penalties for delayed payments.
Improvement In Efficiency
When a business opts for an automated accounts payable invoice processing software, they not only benefit from faster invoice generation and payments but also effectively reduce other gaps in the systems. Other top solutions available with these automation softwares include purchase order automation, shipping orders management, KYC processing, etc. Which in totality add up to the overall efficiency of the business. The digitisation in the system on the software makes it easier to find previous invoices, print receipts and store paper documents on a cloud base.
Better Process Control
As a business entity, the bigger the scale, the more the number of stakeholders involved are higher as it includes all competitors, shareholders, suppliers, vendors, employees, etc. Now, managing processes efficiently in the presence of multiple vendors and suppliers can be an uphill task, especially if carried out manually. Common errors that businesses would want to avoid at all times are duplication of invoices, loss of invoice data, failure to send reminders, etc. With automation software like BautoDocs by Bautomate, the responsibility of sending timely reminders for due invoices and purchase orders is shifted away from manual labour, ensuring no loopholes in the process. Moreover, the software also successfully recognises and withdraws any duplication in invoices, increasing the overall efficiency of the set accounts payable invoice process giving better control to the managers.
Cash Flow Optimization
The key requirement to benefit from cash flow optimization is to ensure that the cash inflow is greater than the cash outflow. Automating Accounts Payable processes can increase the overall cost efficiency of a business as the labour costs go down, there are low or no penalty payments for delayed invoice clearance and lastly, printing cost and stationary expense also go down by a huge margin. This reduces the outflow of cash. On the other hand, as the business efficiency and productivity touches new peaks, customer satisfaction is very high and vendor relations are better. This can result in the additional scope of work opportunities along with timely payments from the customers, increasing the cash inflow greatly. This added understanding of the cash flow and the importance of optimisation can together help the company reduce unnecessary expenses further and increase their expansion possibility in the future.
Opportunity To Rebuild Core Activities
As the requirement for manual labour for accounting purposes drops down due to automation, it allows additional time for the employees to focus on the core activities of a business. This understanding in analysis can further be an advantage to the business in question as employees can come up with better, and more creative strategies to improve the business performance in the market. Additionally, this time away from desk invoice management can also encourage employees to invest more time and energy in preparing for audits and keeping a check of the required compliances applicable for the business. Overall, the employee’s motivation and satisfaction will be higher as they will get the opportunity to increase their technical knowledge and expertise in the field of accounting.
Summing up, accurate invoice processing is necessary to keep a track of all business transactions and operational processes of a company, and also to process timely payments to the vendors. By automating invoice processing through an automation software, you greatly reduce your overall expenses as labour costs go down significantly. You also improve your business relations with the vendors and suppliers as they get full transparency and visibility of the process and also receive timely payments, making it a win-win situation for both. So, by automating accounts payable processes to overall increase your chances of growth and expansion at a larger scale in the near future.