Accounts Payable (AP) is an integral part of any business as this is the base of your company’s relationships with key suppliers. However, some businesses are so focused on innovation and growth that they neglect Accounts Payable duties.
In fact, according to the Ardent Partners report, 47% of AP practitioners identified the lengthy processing times as their biggest challenge. This delay causes demoralisation on the end of AP leaders pushing your organisation further from its goals to innovate and grow.
Automation may help in addressing this and is an upcoming trend. A 2020 global survey conducted by McKinsey & Co. reveals that 31% of businesses have fully automated at least one function, and 66% were priming solutions to automate business processes.
Read on how automation can help you achieve your annual goals for Accounts Payable:
1. Time Savings
There are numerous Account Payable tasks usually done by manual data entry, such as:
- registering and validating suppliers
- updating vendor records
- screening of sanction
- approving of payments
- reporting of tax
- processing an invoice.
The longer it takes to do these tasks, the less time is allocated for strategic decisions. This delay causes friction in other areas of your business, such as poorly organized data, untimely information, and high labor costs.
AP automation eliminates the need for manual data entry. The AP automation software manages the coding and routing of invoices in your organisation’s digital workflow based on your configured logic.
In an automated Accounts Payable environment, your employees will only intervene if necessary, leaving you with a workforce ready to take on other tasks.
2. Streamline Workflows
It can be hard to delegate tasks and introduce goals to your team if the objectives of Account Payables are not clear because of an unorganised workflow. Some organisations use spreadsheets for Accounts Payables which takes time for all your employees to access.
Another con of spreadsheets for keeping track of Accounts Payable is that it is static. It cannot automatically provide an overall preview of your cash flow and debt. In addition to this, the lack of version control can cause validity issues to your records and additional stress to your team. Especially with the remote work setup, the use of spreadsheets for AP causes great inconvenience as it delays obtaining information about ongoing deals.
AP automation helps streamline workflows by combining the variety and volume of invoice data sets in one platform. Furthermore, you can access it anywhere, anytime, since it is cloud-based and syncs with other business systems and apps.
Take the Xelix platform as an example, as it uses a machine-learning-based approach. Xelix can absorb huge data sets and export specific value-adding outputs without going through a bureaucratic process. AP automation software like this allows you and your employees to have the correct data available at any time.
3. Data-Based Decisions
Organisations need to analyse previous data before setting any goal or objective. You might think your organisation lacks data. But in most cases, they are just poorly managed.
Leveraging the bank of data you already have enables you to make more informed decisions. Incorporating AP automation further helps you generate real-time reports and dashboards, ensure data quality, and have an overview of the entire AP process.
One of Xelix’s modules is Insight, an intelligent suite of analytics that helps you build a data-driven culture. The Insight module automates AP reporting, optimises working capital with predictive insights, consolidates data from different systems, and automatically conducts root-cause and cost-saving analysis.
Such tools make it easier to time payments and control spending since you can also forecast cash flow, monitor reconciled accounts, and identify vendor savings.
4. Risk Mitigation
According to the 2020 Payments Fraud and Control Survey, 78% of businesses were victims of payments fraud the previous year. This is very alarming, especially if you experience growth for your organisation. As your company grows, the number of invoices that will come will also increase. Hence, it is a must to consolidate all Accounts Payable data in a secure platform.
If invoices come from multiple employees or numerous office locations, there are greater possibilities for fake invoices. Automating Accounts Payable gives your company the simplicity to operate in a centralised platform and prevent incorrect payments reducing the likelihood of internal fraud. Furthermore, with AP automation, all invoices are reflected in the cloud or web, giving employees an overview of every payment at every step of the process. With this visibility, you can verify suspicious payments.
Likewise, it also guarantees security against external fraud attempts since auditing will be done only in one system. This reduces confusion and the possible loss of data.
The Protect module of Xelix may also aid your company in mitigating risks with the use of AI to identify threats and errors in your transactional and master data.
5. Support Employees
One of your objectives of payable management should be to provide appropriate tools and training that your employees can utilise to ease their work. You can’t meet the rest of your goals without giving support. It is impossible to scale up by just relying on traditional AP tools and workflows.
With an automated AP process, it will be more conducive for your employees to create valuable work. Xelix also assists with a no-obligation demonstration of their platform. In this way, you can gauge how the features will meet your respective goals and requirements. As you start searching for an AP automation service, you need to be assisted and trained on navigating it to avoid wasting your investment.
In line with this, you must inform all employees of this planned transition. Work also with your clients to address their concerns with invoices and processing. You may opt to upskill yourself and your employees on a personal level by enrolling in the best online master degree in accounting.
6. Improved Customer Relations
The Accounts Payable process involves different customers: suppliers, procurement, and Shared Service Center customers. Therefore, it is necessary to properly maintain your Accounts Payable since your customer base depends on it.
As you move towards automation, it will be easier to communicate with vendors. However, there is initial work that must be done which is onboarding the vendors. Automation will affect your internal operations and your customer service to your vendors, which is why your choice AP automation solution must offer integration with existing systems.
To ensure that your organisation will be efficient, you must maintain and develop the tracking process for your invoice through your AP software and act on identified discrepancies immediately. However, you should not fully entrust everything to automation. It is also important to build rapport with your customers by regularly communicating policy changes or cut-off dates. Provide your employees and vendors with consistent and transparent information.
To automate or not?
Choosing an AP automation tool is a giant leap because it will overhaul your employees internally and partners externally. Your company needs to have an apparent reason as to why you want to implement AP automation. You can conduct an initial evaluation of your AP processes and workflow before implementation.
To learn how you may implement data-driven goals and objectives like Wilko, Computa Center & McBride, feel free to book a demo with the representatives of Xelix here.