In today’s world of constant technological advances, automation has become the norm in most areas of business. To stay ahead of the competition and drive growth, finance executives are using Accounts Payable Automation as a way to stand out. Herein lies the concept that automation is not only a priority but also a strategic advantage to your business.
In our latest whitepaper, The Strategic Advantages of Accounts Payable Automation, we explore why companies automate, the hidden costs associate to AP Automation, why the time is now, and questions to ask when you decide to automation.
While we encourage you to read the entire whitepaper, here’s a quick snippet that get’s straight to the point.
There is a growing demand for Accounts Payable Automation as the traditional process is very manual and labor intensive. Small and middle-market businesses are unable to support rapid growth with a small finance team, so they are forced into one of two options: hire an additional team member or automate so that the current team can handle the increased workload.
As the number of vendors in the payables system increases, the workload also increases for the already overloaded small team. Often, hiring a new team member seems the obvious choice. But, companies find themselves in a position where there is not enough work for an additional full-time employee, which ultimately results in stretching the current staff as far as possible. Furthermore, when companies hire an additional AP Manager, they rarely end up spending less time on the Accounts Payable process. This is because companies are taking an overloaded team, adding an employee, and returning their workload back to a normal level.
Accounts Payable Automation dramatically reduces the time spent on the invoice-to-payment process, usually by 50%, and this reduction comes at a much lower cost than hiring an additional team member. Not to mention, the payback period for an AP Automation solution is typically less than six months.
Accounts Payable Automation goes beyond saving time and money, and it is important to look at how it can provide a strategic advantage for your business. Strictly looking at process, AP Automation enables businesses to expedite the entire AP process, from invoice capture to payment execution. An automated process reduces errors, eliminates fees incurred from late payment, and eliminates fraudulent charges by increasing visibility and improving controls. With greater visibility, businesses can begin to take advantage of corporate card rebate programs and early pay discounts – which are one of the best financial returns for any organization – and can leverage them in a more predictable manner.
The automated payment process is also simplified by the availability of multiple electronic payment options, advanced scheduling, automatic remittance details, and a mobile friendly interface. By utilizing electronic payment methods, businesses can also use virtual cards (if they don’t have their own corporate card), enabling them to receive additional rebates on vendor purchases. With automatic remittance details, there is no reason for a vendor to call the AP department to check on a payment.
The biggest improvement of all may be time reallocation. With automation in place, the Accounts Payable Manager can focus on vendor management, process improvements, and higher value tasks rather than manual data-entry. Furthermore, when it comes to the audit process, there is an automatic, electronic audit trail. This improves compliance and reduces time spent searching through files for physical documentation.