AP Automation and Cash Flow Management


There are a number of ways which AP automation can benefit the cash flow of a business. Arguably, the most important is the ability to take advantage of better invoice processing, from capture to approval. This boosts overall transparency, which leads to a clearer perspective on the financial state of an enterprise.

In light of how much emphasis is placed on the financial status of an organization, it should come as no surprise to find that this kind of transparency is highly coveted. There are certain technological provisions which must first be in place for an accounts payable solution to offer benefits which can transform payment activities with the intent that payments are never unintentionally missed or delayed.

Characteristics of Valuable AP Automation

The most successful accounts payable departments are those which are willing to opt for total AP Automation. This involves the following key stages:

  1. Capture: or the way in which a company puts invoices into the system.
  2. Processing: the way in which a company validates and approves invoices.
  3. Completion: the way in which a company schedules and fulfills payments.

It is possible to automate all three stages by investing in one complete system or, alternatively, by blending a number of complementary solutions. The true value of an integrated system, however, can be seen in the increased degree of control, transparency, and accuracy which it offers – this is a direct result of the following characteristics.

  • Scan and Capture: invoices can be received many different ways and still all be processed into the same, central system.
  • Visibility and Control: AP automation provides easier access and visibility into the invoicing process from start to finish.
  • Automatic Approval: simplifies automated matching, processing, and confirmation of invoices, including an automated hierarchy of approvals.
  • Automatic Payment: offers multiple payment types, including ACH/EFT, wire transfers, commercial cards, etc..

While this is not a complete list of the most valuable AP automation characteristics, the capability to direct invoices quickly and efficiently through these channels is the most essential aspect of automating accounts payable workflows. These benefits are reinforced by the ability to observe the invoice receipt and confirmation process with the end result to identify vulnerabilities.

Early-Pay Benefits of Advanced AP Systems

There are some providers which offer Dynamic Discounting which is essentially the ability to more easily negotiate early pay with suppliers. These discounts are often already offered by suppliers and just out of reach for companies still working with slower processes. By expediting the invoicing process with AP automation, invoices are approved in a matter of days, rather than weeks, and taking advantage of discounts becomes simple.

The Effects of AP Automation

The technologies utilized within accounts payable systems are likely to have a far reaching effect on working capital. Whether a company prefers a scan and capture method, which facilitates the digital conversion of all paper invoices, or a comprehensive electronic invoicing system, it is ultimately that AP automation software that will boost the transparency of payment movements and activities.

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