With these centralized paper systems, handling each new invoice can be an ad hoc, disorganized and time-consuming adventure. The result: inefficiencies, lack of accountability and scattershot approaches disconnected from corporate strategies and growing revenues.
One of the most challenging steps in this adventure is getting approvals of invoices from corporate executives. Some invoices need to be approved by specific people in the company.
This usually means that, for instance, if an invoice is above a certain about, say $5,000, that the controller or CFO needs to approve it.
This is all very time-consuming and has great potential for delays in payments.
Then, once the invoice is approved, checks have to be written and signed, envelopes need to be stuffed and stamps added. But you’re not finished yet. They need to be run through a postage meter and sent to the mail room. It’s a lot of time and effort.
This whole paperless process tends to be expensive especially when errors are made and duplicate payments sent. This paper process is also risky because the data on paper checks can be intercepted and stolen by fraudsters. Paper processes are also limit visibility into payments and invoices.
Automated Accounts Payable Paperless Process
With all these challenges, it’s good to know there’s a second option: AP automation that eliminates paper.
AP automation manages the AP process from receiving the invoice all the way to paying suppliers while maintaining existing banking relationships and workflows.
By automating this invoice and payment process, customers have 24/7 visibility into payment and approvals while a dedicated service team with the software provider manages the suppliers and executes payments on their behalf.
The entire automated invoice to pay process starts when a company receives an invoice. Then this invoice gets converted into a digital electronic format.
A key benefit is that it reduces the amount of times a person needs to get involved in the process. AP automation takes care of many manual steps, reducing errors, accelerating the process and lowering costs.
Benefits of Automating Accounts Payable Workflows
But the benefits don’t end there. Examples:
- Faster payments help businesses take advantage of early payment discounts, reduce late fees and increase cash flow.
- Over time, businesses can get major cost savings because fewer staff members are required for AP. Many companies find new opportunities for former AP staffers in accounting, business strategy, financial analysis and internal controls.
- AP staff members can also spend more time doing process improvement and handling mismatched invoices rather than consuming time dealing with a manual process for every invoice.
- Along with these advantages, financial pros have better access to AP data and a full audit trail for each payment sent.