Accounts Payable Automation: The Ripple Effect
Drop a pebble into a pond, or skip a stone across a lake, and watch what happens. The pebble or stone sinks quickly from sight, but ripples spread from the point of impact and keep going after the pebble or stone is gone. This is an illustration of a phenomenon known as the ripple effect, which describes continuing consequences from a single event. Accounts payable automation has one obvious beneficiary—accounts payable. The reduction in manual processing and increased turnaround time on invoices and payments are the most visible benefits on the surface. There are, however, other features that are highly beneficial to the rest of the company. The ripple effect of AP automation spreads out and benefits others, both within the company and outside of it.
High-tier accounts payable automation solutions will provide important AP metrics via dashboards found in online portals—giving exceptional insight as to what’s going on in AP. These same solutions allow multiple users (including those outside of accounts payable, if the company authorizes it) access to the portal, at no additional cost. Thanks to this feature, authorized users can view respective information on the dashboard, such as:
- Savings from early-pay discounts,
- Outstanding invoices,
- Invoice tracking from reception to payment,
- Queried search results,
- And more!
In a company that isn’t fully automated, staff members have to communicate across departments to ask AP for information. These communications often take a great deal of time, which inevitably slows down company processes inside and outside of accounts payable. Thankfully, the availability of queried information from the supplier portal cuts the process down significantly. This exceptional visibility mentioned before means individuals in other departments don’t have to wait for AP staff to acquire, process, and deliver various data.
Another headache when communicating within AP is invoice approval. Typically, employees have to scramble for days—or even weeks—on end between managers just to receive approval. With high-tier accounts payable automation, the solution can automatically route the entire approval process. This way, all the same parties are still involved with approving invoices, but the process of doing so is significantly faster. Automated approval routing also keeps company processes and information legitimate, and keeps the invoice from skipping the proper higher-up before distribution.
Normally, in order to obtain the status of an invoice, suppliers must call AP staff directly. This is extra effort on the side of the supplier, and when so many suppliers want status updates, it can lead to a headache of phone inquiries for AP to field. With a fully automated AP system, however, suppliers have access to their invoice data via the supplier portal. They can initiate invoices through the portal, make inquiries or respond to disputes in real time, and communicate directly on the invoice—thus, eliminating the endless phone tag and staying abreast of the invoice as it’s processed. A supplier benefits greatly by getting paid quickly, and by being able to resolve issues on an invoice within a day or two instead of a month. Plus, any comments or changes are recorded and timestamped on the invoice in case future questions are raised.
A Beneficial Investment for the Entire Company
Accounts payable automation is undeniably a direct benefit to the AP department. But just like the pebble skipping over the pond, the ripple effects provide even more benefits to people both inside and outside of the company. With accounts payable automation, it’s a definite win-win situation for the whole organization.