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Businesses that use accounts payable (AP) automation can see up to 73% faster invoice processing times - but that's just the tip of the iceberg. While improved efficiency is a well-known benefit of automating accounts payable processes, there are other advantages you might have missed.
In this article, we'll explore some AP automation benefits that are often overlooked: improved cash flow management, stronger supplier relationships, and enhanced data and security oversight. We'll also help you choose the right accounts payable software to make processing invoices easier.
One of the most significant, yet often overlooked, benefits of accounts payable automation is improved cash flow management.
Accounts payable process automation enhances cash flow visibility by providing real-time financial data and reporting. With an automated expense management system, invoice data is captured automatically, eliminating the delays and errors that come with manual processes.
This gives accounts payable departments a clear, up-to-date picture of their outstanding liabilities and cash positions. Accurate and timely invoice processing also enables businesses to forecast cash requirements more effectively. And with more accurate cash flow forecasts, businesses can make better decisions about when to pay invoices and how to allocate funds.
Automating the invoice approval process and integrating payment with electronic payment systems can also optimise payment cycles. By automating payment cycles, businesses can ensure that invoices are processed and paid within the agreed-upon terms, reducing the chance of late payments, which can negatively affect cash flow.
By enhancing cash flow visibility and optimising payment cycles, businesses can better manage financial resources and make more informed decisions that drive growth and increase profitability.
Another key benefit of AP automation that often goes unnoticed is improved supplier relationships. By streamlining communication and improving payment accuracy and timeliness, AP automation can help businesses build stronger relationships with suppliers. AP automation software can improve supplier relationships in several ways:
One way AP automation systems improve communication with suppliers is through automated invoice status updates. Suppliers can easily track the status of their invoices, from the moment they submit invoices to invoice approval and payment, eliminating the need for time-consuming manual follow-ups. This transparency reduces time spent on inquiries and minimises the risk of miscommunication between businesses and their vendors.
Self-service supplier portals can also improve communication. These digital solutions allow suppliers to submit invoices electronically, access payment history, and update their information independently, making it easy for suppliers to share information.
Making timely payments is one of the best ways to improve supplier relationships. By integrating with electronic payment methods, AP automation also enables businesses to pay suppliers promptly, within the agreed-upon terms. An efficient payment process keeps business operations running smoothly and demonstrates a commitment to maintaining positive business relationships.
Automated systems also ensure invoice information is accurate, reducing the risk of errors and disputes during payment.
AP automation can also help businesses build long-term relationships. By consistently paying on time and maintaining open communication with vendors, businesses can establish themselves as reliable partners.
Becoming a reliable and trustworthy customer can lead to more favourable payment terms, such as extended payment periods or early payment discounts, which can have many other benefits, such as improved cash flow and reduced operating costs.
Strong supplier relationships also foster collaboration and innovation, as suppliers are more likely to work with trustworthy partners.
By streamlining communication, improving payment accuracy and timeliness, and building trust with suppliers, businesses can create a more resilient and efficient supply chain, ultimately driving growth and competitiveness in the market.
Accounts payable automation not only streamlines the accounts payable process, but also provides businesses with increased visibility of their financial data.
Receipt scanners powered by optical character recognition (OCR) can ensure invoice data is recorded accurately. OCR technology extracts relevant information from invoices, such as supplier names, amounts, and due dates, eliminating manual data entry errors. Other digital solutions like automated data validation and matching also ensure that the extracted information is accurate and consistent, further reducing the likelihood of invoicing mistakes.
Access to accurate and relevant accounts payable data can provide businesses with valuable insights that guide strategic decision-making. By analysing spending patterns and trends, companies can identify opportunities for cost savings, negotiate better contracts with suppliers, and optimise their procurement processes.
In addition, accurate and relevant data regarding cash flow can help businesses make more accurate cash flow forecasts, which can help guide budgeting or investments.
By leveraging AI and machine learning for intelligent invoice processing, AP automation software can learn from historical data to automatically detect anomalies. By continuously learning and adapting, AI-powered AP automation systems can become increasingly accurate at recognising invoice fraud before it occurs and causes financial damage.
Choosing the right AP automation software is crucial for maximising the benefits of AP automation. To find the best fit for your business, assess your current AP process, invoice volume, and the specific pain points you need to resolve. If you're a small business, look for software that can grow with your company as it scales.
When evaluating AP automation software, look for key features that support your organisation's needs. Seamless integration with your existing accounting systems can help you avoid data silos and ensure a smooth flow of information. Customisable workflows and approval processes are also important, as they allow you to tailor the solution to your specific requirements.
Choose an accounts payable automation software that offers comprehensive support, training, and resources to help your team navigate the transition, resolve any issues with implementation, and realise the full benefits of the software. Robust security and compliance measures are also non-negotiable when looking for AP automation solutions.
Book a demo with ExpenseOnDemand to experience all the benefits of AP automation.
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