When it comes to the accounts payable (AP) and receivable processes for SMEs and large organisations, the main focus really is that invoices are issued and vendors are paid on time, right? Some might even conclude that senior leaders don’t think too much about how to improve accounts payable processes, just so long as the payments are made and the vendors are happy.
But while most organisations still have manual accounting processes, the reality of lost productivity and mistake-prone manual work is still very alive and well in pretty much every corner of the commercial globe. And what’s worse, it’s costing organisations money, which is why so many finance teams are considering how to improve their accounts payable processes with automation.
Whether your invoices are emailed or hand-delivered, there are many problems with manual accounting systems. The marathon of invoice processing can be long and tedious - the preparation of documents, data entry, sign off and approvals, filing and indexing - no wonder things can go off-track!
Here are some signs that it’s time you bid farewell to your manual AP process...
If the internal process includes printing and storing invoices in a folder or in-tray, one is bound to get lost from time to time. This can result in lost productivity and late payment fees or penalties.
AP professionals’ inboxes are flooded at the best of times, so it’s only human nature that from time to time, some invoices get ‘lost in the system’ - or worse - misplaced completely.
Poor data processing
Data processing is both time-consuming and error-prone. When it comes to entering data, a slip of the finger might mean the difference between four zeros or five zeros at the end of a number.
The time it takes to process invoices from start to finish can be quite damaging to your company’s budget, which is why many businesses are turning to automation solutions. One of the goals is to minimise the manual labour component of AP.
If there is no single system governing the AP process, then streamlining invoice processing and ensuring best practices can be a headache.
Even strong manual procedures can’t stop employees interpreting data differently or creating their own shortcuts or methods to get things done. This can lead to all types of inconsistencies and increases the risk of things going wrong.
Poor records and non-compliance
When invoices or work orders are processed manually, there’s a greater chance that they’ll also be stored or saved differently - which results in a very clunky system that makes it more time consuming for employees who are searching for records or data. It also makes it extremely difficult to be efficient (and compliant) come auditing time.
How to improve accounts payable processes with automation
Not only does automation assist with compliance and best practice, but it also increases productivity and accuracy across the one thing you want accuracy in - monetary transactions.
Do you know how much it costs your organisation to process an invoice? Quite often it’s the desire to reduce this figure that leads businesses to automate accounts payable. And the benefits of doing so can be vast.
Here are a few benefits of automating accounts payable processing:
- Centralisation of data means secure access by all those authorised, anywhere and at any time
- Quicker and more efficient payments Reduces processing times and manual labour costs
- Seamless and easy-to-use processes - leads to better productivity and employee satisfaction
- Frees up storage space, can reduce your carbon footprint
- Reduces the risk for error and double handling
- Consistency across workflow
- Scalable to the size of the business
For example, Kyocera Document Solutions’ Enterprise Content Management (ECM) solution makes information management, sharing and automation across departments easy.
All documents are centrally located and can be accessed from anywhere around the world at any time. This is especially handy for larger international corporations with offices around the globe. For smaller businesses, it’s the sleek workflow management that really gets the attention. Imagine moving an invoice through the system with ease at every touchpoint.
So what exactly does this look like in a real accounts payable processing scenario?
Consider this as an example of automated accounts payable in full swing for processing an invoice:
- A new invoice comes in and is added to the task list for the first accounts person to route to the right department. This is done by simply adding an electronic stamp.
- The invoice then automatically appears in the task list of each department supervisor. They could be spread across an office building or even the country. After checking it and approving or rejecting it with a stamp, it then forces the process forward by deleting it from the supervisor’s task list and automatically replacing it in the task list of the next person in the approval process or accounts department.
The document moves through this process and is safe from data errors, loss, mishandling, multiple data entry mistakes or just getting delayed with the one department.
What’s more, the cost it takes for an organisation to process an invoice is severely reduced, and that saves both time and money.
Whether you're looking to scale up or diversify your business, automation can help you create efficiencies, support future growth and add value to your organisation. Download our guide, Business Automation: How it generates value and supports growth, to learn more.