When it comes to Accounts Payable not task is low-priority. Tasks can repetitive and tedious, but every element of the Accounts Payable process carries an inherent risk of fraud making it a perfect branch of accounting where automation can work its wonders.
What is Accounts Payable workflow automation? What are its benefits?
Workflow is simple terms means a sequence of steps. An AP workflow is the steps taken by the accounting team from the day the invoice is received to the day the payment is processed to the vendor/supplier.
In a manual AP workflow, the received invoice data is manually entered into the system, sent for approval, verified manually, and check is cut to the vendors. In contrast, an automated AP workflow, automates the invoice data entry, matches the data, catches exceptions and re-routes it to relevant departments, sends it for approvals and processes payment automatically.
How are automated AP workflows better than manual workflow?
As a remote accounting firm offering outsourced Accounts Payable services to small, medium and large businesses, Outsourced Bookkeeping has worked with both manual and automated AP workflows. And in all evidence, we can say that automated AP workflow can help every business improve their invoice process by leaps and bounds. Want to know how?
Here are 5 Benefits of Accounts Payable Workflow Automation:
Say goodbye to data entry errors: Data entry problems had to be the biggest Accounts Payable problems plaguing the process since, forever. From entering the details of the invoice to setting it up approval and processing it for payment, each step of the Accounts Payable involves data entry which means every step carries its own risk. Even in the event of errors, rectification will cost time, money and resources – making data entry errors notorious when it comes to Accounts Payable.
Automated Accounts Payable comes with advanced OCR technology directly scans the invoice and automates data entry. The matching and verification step is also automated further eliminating possible data entry errors.
As a remote accounting firm, Outsourced Bookkeeping we employ a wide variety of automated data entry systems and tools to eliminate errors and ensure accuracy of invoice data for our Accounts Payable Services.
Improved accuracy & lower cost invoice processing: Improved accuracy of the invoice process in itself saves a lot of money that is usually spent in terms of work hours for data entry and verification.
Having an automated process also reduces the number of steps involved in the AP process and this saves a lot of cost and time spent on manual tasks. Add this to the storage costs and print costs of the manual process and early payment discounts that can be carried by the accounting department, automated AP workflows is a real money saver for any business.
Streamlined process & improved Insight: With automation, every step of the AP process is streamlined for improved efficiency. Accounting teams no longer have to run behind scattered invoices are spend loads of time knowing the status of the invoices.
One platform that centralizes all the invoice and payment information makes it easy to track the status at a glance. With the dashboards provided, every step in the journey of the invoice is shown to make necessary real-time tweaks and optimization in case of delays.
Faster AP cycle times: Automated AP conveniently mitigates all the time taking and tedious steps involved in invoice processing – data entry, matching, verification validation, approvals and ERP posting. Slow invoice processing overtime costs more resources and creates processing bottlenecks leading to payment penalties and strained relationships with vendors.
Automated AP workflow helps a business speed up their invoice processing leading to faster cycle times giving an ample chance to score early payment discounts and more importantly, greater control over their cash flow cycle.
Fraud prevention: Accounts Payable is one of the most vulnerable accounting branches when it comes to financial fraud. An estimated 81% of the businesses are found to be impacted by payment fraud according to AFP Payments Fraud and Control Survey. With so many steps involved in manual AP, the risk of fraud increases multifold especially with a high volume of invoices.
Automating AP workflow provides greater, control and visibility over the entire process. Automation also enables customizing the control by separating the duties with respect to invoice approvals and payment processing. With centralized process and de-centralized control, automated AP also help in building multiple approval workflows that sort of eliminate the risk of fraud when perfectly implemented.
Despite the benefits, a business may not be in a position to leverage AP workflow automation due to either lack of expertise, resources, infrastructure or budget. However, if you are one of them the simplest way you can benefit from Account Payable automation is to outsource Accounts Payable Services to back-office accounting firms like Outsourced Bookkeeping. You can find us here: https://outsourcedbookeeping.com/