According to Inspyrus, Accounts Payable (AP) automation results in 3x cost savings compared to legacy solutions – eliminating paper, manual data entry, and associated errors, and providing real-time visibility into processes. Despite these benefits, many finance departments continue to perform manual invoice processing.
Here are six key reasons why companies should consider streamlining their processes with AP automation:
1. Eliminate Human Errors
Automated invoice processing eliminates paper-based, manual data-entry, and associated human errors, and hence doesn’t require the same level of oversight. You can automatically validate your invoices and perform 2-way and 3-way matching of invoices and purchase orders. Issues like overpayment and duplicate payments are eliminated, and exceptions are automatically flagged for review. It significantly reduces costs and improves the accuracy of reporting, budgeting, and auditing.
2. Reduce Cycle Time
You can save time as invoice processing and approvals are more efficient, secure, and cost-effective with simplified workflows. You can capture your invoices from their original source and automatically pull key information to import into your financial systems. Automatic workflows route your invoices to the department or individual concerned. Less time spent on manual invoice processing frees up time for more important tasks such as tracking invoices that are delayed.
3. Get Real-Time Updates
Real-time accounting gives you access to the information you need, when you need it, as soon as a transaction is completed. Companies that use AP automation solutions require fewer resources to respond to supplier queries, improve forecasting, and close the books faster. They can allocate suitable resources based on the workload and build more efficient shared services centers.
4. Integrate With Existing Finance Systems
AP automation solutions seamlessly integrate with your existing financial systems, allowing for real-time communication between the systems and eliminating the need to switch back and forth between applications or re-enter data into multiple systems. Functions performed in your AP system will be automatically updated in your ERP system and vice versa, allowing you to optimize accounts payable.
5. Improve Relationships With Suppliers
AP automation systems make it easy for you to manage supplier relationships, helping you minimize supplier risk. Timely payments can improve payment profiles and company credit ratings, raise your standing with other suppliers, and optimize the entire supply chain process. Making timely payments also allows you to negotiate and secure early payment discounts from your suppliers resulting in up to 2% savings on annual spending.
6. Improve Compliance
In global organizations, AP automation ensures greater control and transparency in spending. Increased visibility into the invoice approval process reduces compliance risks. Process standardization ensures that a global process template is followed while accommodating local statutory requirements. AP automation allows organizations to set and monitor the right benchmarks, and define KPIs for every step of the process.
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