For the majority of businesses, one of the most important departments benefiting the overall health and effectiveness of the organization is accounts payable. It is a crucial part of the financial activity and debt management of any company. Without proper management of the AP department, the business or organization can stop receiving the essential supplies and the other resources it needs to operate and serve its customers and constituents. It can also lose its ability to take early pay discounts and other contract incentives associated with the timely payment of invoices.
This is why it should come as no surprise that, like other aspects of a business, the AP department is one that people continually seek to improve and make more efficient. Properly managed AP means a company runs more smoothly and has fewer unexpected “hiccups” such as suddenly having creditors demanding money owed before they will provide their goods and services or vendors completely withdrawing their product or service. Automating the AP department, as with other departments in a company, can be a significant step towards improving the AP process and the financial well-being of the organization. Here are four of the reasons why:
1 – Mobile Operations
One of the modern benefits of AP automation is that the process doesn’t just go digital, it goes online and mobile as well. This means that any AP work that needs to be done doesn’t have to be done only in the office, remote work and social distancing can be done from anywhere.
Through the use of Cloud storage, AP staff can check on details while on the road through their phone, tablet, or laptop anytime they need to, as long as there’s internet access. This makes it very easy to perform routine inspections to ensure a transaction has gone through in just a few seconds, without requiring that a staff member to go down to the office just for confirmation or approval.
Any AP manager will tell you that one of their challenges is tracking down approvals from traveling staff members in order to process ad hoc purchases. Another important aspect of going mobile is that busy managers and executives can easily review and approve transactions from anywhere in the world at any time.
2 – Better Access
AP automation with online storage also means that access is available to everyone from any location. This means that any relevant employee, whether it is the accounts department in order to process a transaction, or a finance staff member looking for the supporting documents required to analyze the year’s financials, can easily get the information.
This ability to access all AP data means that anyone, including management and supervisors, can track any transaction all the way back from the initial purchase through payment of the vendor’s invoice. It means much greater transparency in both operations and legal matters. It just makes information and transactions easier to access and to track for everyone in the organization.
3 – Reduce Errors
With traditional manual AP processes, there’s a lot of room for human error:
- Forms and invoices can get lost
- Amounts can be entered incorrectly
- Duplicates can be made
- GL codes can be erroneously applied
- Documents can be routed to the wrong department
In other words, the more human participation that is required in any process, the greater the chance for error along the way.
AP automation significantly reduces the chance of occurrence of errors. More importantly, because it is so accessible, it also makes tracking of the error to its source and any correction much faster and easier than traditional methods. The transparency and chain of accountability are much more defined, and the automation process itself already acts as a formidable tool for to reducing errors.
4 – More Efficiency
Perhaps most important of all, AP automation will save both time and money, which are valuable resources in any organization. Automation means transactions are quickly completed, disseminated, and approved by the appropriate staff members in a timely fashion.
It can even make things more efficient between the business and their vendors, as payment processing can be tied into AP automation. No more payments or receipts need to be “lost in the mail,” and everyone can see what exactly is going on.
Automating AP will improve organizational efficiency, vendor relations and the bottom line. To learn how CASNET can improve your AP processing, contact us today!