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What is Accounts Payable automation?

Automating accounts payable is a valuable investment that will help any business streamline their finance functions – with better use of time and resources and fewer errors as a result.
Tuesday, February 20, 2024
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AP automation software

Managing the receipt, entry, and approval of invoices can consume a significant portion of your day. To reduce the time spent on manual and error-prone tasks, consider investing in AP automation software. These solutions are available as standalone programs that integrate with your ERP system or as fully integrated components of your standard workflow, offering smart and efficient automation. The top-tier AP automation software enables you to automate repetitive tasks with minimal intervention once configured, significantly enhancing productivity.

Scanning invoices with OCR

Optical Character Recognition (OCR) technology has seen significant advancements over recent decades, enabling computers to scan documents and identify text characters. Modern Enterprise Resource Planning (ERP) systems leverage OCR to scan invoices and recognize fields, identifying relevant fields and lines for the payment process. Coupled with machine learning, these systems continually improve in recognizing and categorizing data, thus progressively reducing the need for manual intervention.

The application of automation, OCR, and machine learning extends beyond large enterprise solutions, with AP (Accounts Payable) automation solutions available for small businesses as well. Regardless of the volume of invoices processed monthly, AP automation can significantly save time, allowing businesses to focus on more critical and demanding tasks.

Handling approvals  - the easy way

When an invoice's fields and lines are automatically recognized, the approval process becomes significantly easier. With a well-defined set of rules, each invoice is promptly sent to the appropriate person for approval at the right time. This automation eliminates the need for manual approval efforts, ensuring timely payments and securing early payment discounts consistently.

Automatic reconciliation

The task of matching bank account statements with entries in financial software is not only time-consuming but also error-prone, often occupying too much of your valuable time. Reconciliation is a process ripe for optimization and automation with the appropriate software. The importance of this lies in the fact that automated reconciliation software is capable of handling large volumes of data and transactions, far beyond human capacity.

As a result, such software can complete reconciliation tasks in seconds—tasks that would otherwise take hours if done manually. This increase in efficiency frees up your schedule, allowing you to concentrate on other essential tasks that require your direct attention.

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Document Capture

  • How does AP automation improve vendor relations?

    With an automation setup, every invoice is always handled the right way. This way, no late payments or approval problems arise and you will meet payment deadlines - no more untangling of unpaid invoices and unpleasant calls or emails from angry vendors. 

  • How does AP Automation optimize approval processes

    With an automated solution for Accounts Payable, incoming invoices are coded and recognized based on vendor, account, amount or purchaser - this way the approval process can be automated as well, as approvals are based on the invoice and its content - and the right approver will be messaged and promted for approval based on payment dates and deadlines. 

  • Does AP Automation prevent fraud?

    Your AP automation setup should be set up to detect fraud. Fradulent invoices, bank account fraud and other types can be detected with AP automation. New vendors, new bank accounts and non matching amounts are registered upon invoice scanning and a manual check has to be done, before the invoice can be paid. This way irregularities are spotted and checked, ensuring that no money or reputation are lost.   

  • Why do companies invest in AP Automation?

    There are many reasons to invest in software that automates the processes in Accounts Payable. While the joy of getting rid of stacks of paper is a great reason; time and efficiency are the main parameters. Gone are the workflow bottlenecks where one person slows down the process and chasing down middle managers for approvals are a thing of the past. Automated processes reduces the time you have to spend on manual tasks, that don't add value to workday. And with automated processes and a rule based approach, you can cut down the time spend on invoice exceptions and spend your time on tasks that add value.