Regardless of size or industry, invoice management is a big concern for any organization. Even relatively small operations can have very complex AP processes, particularly if they’re dealing with suppliers that are geographically dispersed.
While administrative requirements are usually straightforward, the problem is that they become less reliable as more clients are added to the accounts. Traditional, manual methods of invoice management can be inaccurate, inconsistent, and very time-consuming.
There is now a wealth of tools and software designed to increase efficiency, eliminate costly mistakes, and bolster supplier relationships. It’s just a matter of matching the needs of the company to the right AP automation solution.
No More Tedious Data Entry Tasks
According to the annual Accounts Payable/Account Receivable Survey conducted by Aberdeen, one of the biggest challenges with paper based AP is the frequency of human error. Manual data entry almost always leads to information which is incorrectly placed, illegibly presented, or just plain wrong.
The result is a backlog of invoices and a strained relationship with suppliers, as transactions take longer to process. Often, this causes businesses to miss out on early payment discounts. AP automation is a viable solution because it removes the capacity for human error and captures granular invoice details at the line level.
Automated PO matching is a great way to boost accuracy because invoice data is compared directly with the original purchase order. It takes just one complete interaction for e-invoicing software to start proactively recognizing supplier requirements. It can then trigger automated decisions, based on past behaviors and speed up processing, reconciliation, and payments.
Why Automation is Key to AP Success
When applied correctly, AP automation solutions have the potential to streamline most aspects of a business. For instance, electronic invoicing makes it easier for companies to turn dynamic discounting into a solid, dependable asset. It strengthens supplier relationships by opening up a wider window on the movement of payments.
Operational bottlenecks are less of a risk because automated alerts are sent to specific people and departments when problems occur. They don’t have to travel down a chain of command, as the software identifies the issue and matches it with the most likely source of resolution.
Switching from paper to AP automation solutions improves the efficiency and accuracy of invoice processes by as much as 40%. When high-quality electronic data interchange (EDI) tools are applied, this can be boosted by a further 15%. Aberdeen backs up this claim with figures that show 91% of automated companies make payments on time, every time, compared with only 41% of laggards.
Making the Case for ‘Best in Class’ AP Solutions
The benefits of investing in accounts payable automation are numerous. With AP automation solutions, it’s possible to speed up data extraction, improve PO matching, increase payment discounts (dynamic discounting) and open up opportunities for platform integration.