On average, companies in the US spend more than $120 billion on paper for documents, invoices, and communications. Going paperless cuts costs incrementally for businesses shifting towards digital systems.
The drawback? It can be difficult to keep track of digital documents without the proper tools.
AP automation software is a SaaS tool that can help with that, but how do you choose the right solution for your unique needs? Read on for a guide to selecting the most helpful AP automation solution.
Why Do You Need AP Automation Software?
The accounts payable function is an essential aspect of modern business. However, as it involves many time-consuming and repetitive processes, manual operations can be inefficient and prone to human error. By instead leveraging AP automation software to perform tasks like invoice processing, vendor communication and payment management, leaders can streamline much of the accounting process to make more efficient use of limited time and labor resources.
This is backed by data suggesting 30% of business leaders have seen reductions in labor costs due to process automation, with 42% agreeing that workflow automation improves productivity.
Below are a few key reasons why businesses choose to automate accounts payable processes.
Cost Savings
You get charged for every invoice you process, and for large businesses these costs can be otherworldly. And, if you leave yourself open to the potential for human error, you risk cost inefficiencies, too.
Manually typing information into invoices and calculating totals leaves plenty of room for accidents AP automation automatically captures invoice information from your digital systems, collating it to develop invoices without manual intervention.
This way, you reduce the person-hours behind your invoicing process, allowing you to spend your human resources more advantageously – saving money in a measurable way.
Accuracy
As we discussed, errors cost you money. They also disrupt your relationships with vendors. If you invoice too highly, you could turn vendors and clients off. Undercharging, too, can cost your business as you won’t receive fair payment for services rendered or goods sold.
By automating the AP process, you can ensure dead-on accuracy for all of your invoices, so you never under or overcharge and harm your reputation. In fact, the APQC reports that AP automation software can reduce invoice error rates from the current average of 2% to 0.8%.
Improved Compliance
Your auditing process ensures that you only pay authentic and approved invoices. Illegitimate invoices may make their way into your inbox, and verification is essential. Any failure to verify the legitimacy of invoices could lead to fraud charges.
AP automation software provides automation for your auditing process and foolproof records of any actions taken regarding invoices, so you have definite proof should there be any breach in your compliance.
Data Insights
By housing all of your AP data on a single platform, you can eliminate data silos that might reduce your level of insight. The software provides a simple and streamlined interface for you to review your expenses and budget, and make more informed decisions to drive cost savings. Without it, you would need to gather information from several disparate platforms and systems to collate data and review your expenses.
Collaboration
When the AP workload burdens your team, it can increase the risk of overwhelm, burnout, and morale drops. Time-consuming and tedious tasks are the enemy of productivity, which is why automation is only a positive for your accounts processing procedure.
With your AP process automated and time-consuming tasks reduced, your team can transfer their focus to more important and engaging parts of the job. They will improve morale and pay more attention to aspects that drive business growth.
Integrations
All decision-makers within the business can access AP information with the right integration strategy. You can integrate the software with your office suite platforms to make the information more accessible to key players to ensure more alignment between departments.
What To Look For In AP Automation Software
Here are some of the prime features and capabilities to look for when evaluating AP automation software for your business – ensuring you get the best deal for the best feature offering.
Automated Data Capture
Transferring data from disparate systems into your invoices can be one of the most time-consuming elements of account processing. But what if you didn’t have to do this at all? By integrating AP software with your databases, you can ensure that the information transfers automatically, creating invoices with a few clicks rather than hours toiling over the keyboard and sifting through documents.
This feature ensures all information comes straight from the source rather than being filtered through manual processes. The automated transfer is completely accurate, ensuring no mistakes are made in the invoicing process (so long as your sources are correct).
Open API Integrations
How easily a system can integrate with your existing suite is a key marker of how compatible the software is with your business. Optimal integration capacity will ensure seamless data transferability, uniting all of your systems for easier information management. DevOps engineers play a crucial role in facilitating these integrations, ensuring that the processes are automated, reliable, and efficient.
Not to mention, integration eliminates inconvenient data silos that increase the time needed to access and review information regarding your accounts.
User-Friendly
The platform should be accessible to employees of all skill levels, and senior leaders should not require training to access information on the system for business insights. This is why you must acquire demos of the software solutions you’re considering.
This will allow you to gauge how intuitive the system is, allowing untrained users to navigate accounts information easily. And you can also gauge the clarity of the interface and whether the layout is confusing or visually noisy, which can affect usability.
Scalable
The solution you choose should be able to grow with your business. Even if you don’t foresee extensive business growth in the next few years, you can’t rule it out. This is why choosing a powerful and scalable tool is essential to your strategy – you don’t want to be worrying about upgrading your systems should your business grow.
Affordable
Your budget is the primary consideration when adopting new software solutions. The AP software you choose should align with your budget while offering all of the feature options listed above. Aim for a solution in the mid-range of your budget, as choosing a cheaper solution could compromise good customer service and assistance.
Vendor Reputation
Beyond the software, it is also essential to research the vendor’s reputation. Use social listening tools to gather insights about user experiences. These tools can give you a clear picture of the vendor’s reliability, ensuring you choose a reliable partner that aligns with your business needs.
When Is The Best Time To Invest In AP Automation Software?
It’s never the wrong time to invest in AP automation software, but here are some signs that you’re in need of this solution:
- Low morale – if your employees are sick of manual data entry processes, now is the best time to invest in a solution that unburdens them.
- Inefficiencies – mistakes in your AP invoices can be hard to recover from. If it keeps happening, your business will suffer. Automating the process will completely eradicate mistakes caused by human error.
- Before growth – if you’re expecting your business to grow and your vendor list to expand, then you would benefit from using a software solution to reduce heavy lifting.
- Streamlining your team – should you need to make cutbacks, you can reduce employee hours required to reach your targets, and thus make savings on employee hours or reduce the size of your team (this is extremely beneficial for smaller companies).
- During the startup phase – startups have limited resources, and automation can allow you to do more with fewer staff members, driving productivity immensely.
If any of the above conditions apply, you are likely in need of AP automation tools to optimize the future of your business. Use the best practices listed in this guide to carefully select a software that does the most for your business.
Summary
A forward-thinking business is one that considers all perspectives, all battlefronts covered in terms of automation and efficiency. If you’re seeking new automation solutions, AP software is a worthy consideration. Devoting time towards integrating this solution means you’ll reap rewards in terms of insight, cost-efficiency, and more advantageous use of employee time.
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