What every organization needs to know about Accounts Payable payment automation.
Automation is an intriguing concept. For some, it calls to mind efficiency or increased productivity. Others might think of gains in accuracy or even doing more with less people power. But as more businesses look for ways to incorporate automation into various areas of operation, it’s a good rule of thumb to remember all automation isn’t created equal — and successful automation adoption requires more than a great piece of software.
Of course, identifying a software solution that has an established track record of success, as well as one that can work with your existing system, is key. But perhaps even more fundamental is identifying what areas(s) of your business would benefit most from automation and then establishing a clear process and workflow that has support and buy-in from the top down. Doing this work upfront not only aligns expectations of the addition of automation to your business workflow, it also enables a clearer path to measure its success.
Because of the volume of and critical nature of the work that Payments departments perform for businesses, many advances in automation have been made in this space. As a result, many business leaders are opting to introduce automation through departments like Accounts Payable (AP) and they are outperforming competitors who have yet to make the leap. But the most successful follow this blueprint:
- Get executive-level support and buy-in for the benefits of workflow automation.
- Ensure you have policies and rules that are formalized, comprehensive, and easy to follow, detailing such things as invoice handling — from receipt to approval to payment.
- Set system-level controls so you can detect potential fraud, identify compliance issues, and steer clear of security breaches.
- Seek out and apply automation processes where it makes the most sense, like invoice capture validation, duplicate invoice verification, payments, and so on.
- Make certain the software you select is configured to provide regulatory compliance.
- Make use of reports that provide insight into your payments workflow to help you spot invoice issues (like duplicates), potential internal or external fraud, or reconciliation issues.
At a minimum, invoice automation solutions should help you convert your invoices into a digital format as early as possible in the process and store them in a central place. Then, once the invoice is in the system, the solution can approve the invoice for payment based on business rules or matching to the purchase order/receivers, notify an approver that their action is needed, or identify an exception that needs review within a matter of seconds.
Digital invoices provide complete transparency. And for cloud-based or Software-as-a-Service (SaaS) solutions, you can access invoices anytime, anywhere. You can get the full benefits of a seamless process when the solution works with your enterprise resource planning (ERP) system. And when paired with payments automation on top of that, you can add electronic payment records and reconciliation to your AP departments, all but eliminating the need for printing checks and paper storage.
The reason payments automation is so popular is the undeniable return-on-investment the solutions bring. Invoice automation particularly can remove a substantial amount of paper from employees’ desks while creating a time-cost savings by reducing the number of invoices manually entered into an organizations’ ERP system. On a larger scale, it improves several other pain points, such as:
- Approvals dependent on employee availability — When a paper invoice is sitting on an approver’s desk, it can only move to the next step after that person returns. With digital invoices, approvers can make approvals online anytime, anywhere, and can even be notified when an invoice is pending their approval.
- Lack of invoice audit history — Paper is inherently hard to track. With invoice automation, companies can view an invoice’s entire journey at the click of a button, complete with information on who approved it, on which date, and any changes that were made. Because everything is searchable, auditing is a breeze.
- No analytics — When AP staff is overwhelmed by their day-to-day work, analyzing the overall department’s statistics is difficult. By letting technology do the work, the technology can create reports and analytics that AP staff didn’t have time (or maybe never thought) to track.
- Non-compliant storage — Rather than storing your suppliers’ sensitive data in filing cabinets on-premise, add a layer of security by keeping electronic records in a secure, encrypted location.
With an invoice automation solution in place, companies can streamline a variety of manual, time–sensitive tasks, unlocking the potential for some major cost and time savings. Organizations using CommercePayments® AP Invoice Automation have been able to cut the days to process an invoice from an average of 16.3 days down to only 4.1 days. And the cost per invoice has seen a drop from $16.67 each to only $3.34, on average.
As you can see, significant savings in time and money are yours when AP automation is “done right.” An automation consultation, like those offered by the CommercePayments® team at Commerce Bank, can help you gain an outside perspective of your AP processes and discover which solutions would provide the biggest benefits for your business. Don’t let your competitors get the AP automation advantage over you.
