Pandemic has primarily affected the world and the workflow of the business. Essentially the way of payment has widely changed. Companies are now trying to get new ways like accounts payable automation to pay their clients.
It is tough to manage bills and invoices records and payments; it must now move toward an automated account payable process to address these bills.
How to improve your end-to-end process of accounts payable?
You can take different steps to make account payable processes easy and improved.
An account payable process relies on these three steps; the first step is procurement. The account payable process starts when companies create orders for their vendors because purchasing orders are the base where the problems begin, like vendors missing order numbers and missing vendor’s names could lead to destructive results.
A receipt is one of the essential things in the workflow of a business. Receipt from both sides when an order is delivered and when a vendor sends an invoice.
Based on this receipt, the payment process works smoothly; if any of these is missing, it will affect the relationship in the form of the poor relationship between company and vendor and lead to missed payment deadlines.
Payment is the resultant for which we are going through this process when procurement has been made, and the receipts generated payment process starts from here. Invoices get matched, and then the company approves payments. If the payment process is not smooth, then it will affect the whole business.
To improve the whole process, companies can manage the procurement stage more effectively by making it electronic and maintaining the vendors’ procurement records and AP records for the next few years. Still, when an order is placed in many companies, it went to the AP department to note down invoices by hand and make a bill. Human error is expected in this, so to minimize the mistakes in the receipt process, scanner and optical character recognition software could be helpful. To improve the payment process, using the right kind of AP automation will help out the most.
Other things you can do to improve the AP process is;
You can do go paperless as soon as possible. Move toward electronic bills it will make account management easy. Paper invoices can be lost, but online billing is fast and helps to avoid late payments.
Having a standardized system for your business is the key to improve the workflow of the accounts. It will help to manage and pay off invoices timely.
How account understanding accounts payable turnover helps your business?
Understanding accounts payable turnover can be vital for your business. If you have recorded a company’s routine to pay its bills, it will benefit in many ways to make a report for short-term liquidity supplier relation, etc.
AP turnover helps in many ways; it will open new opportunities for your business; the AP turnover ratio allows you to evaluate critical relationships and notify you to make adjustments. Help to assess company-supplier relations account payable turnover ratio is the best way to judge the relationship; checking payment efficiency between company and supplier is one way.
Why are companies investing in AP automation?
There will be some reasons why the companies are investing in accounts payable automation. By evaluating these reasons, we have found three significant reasons companies are moving toward AP automation.
The first thing is too much paper; now, companies want to go paperless to save time and be eco-friendly.
To make the workflow smoother is another reason to invest in the automation of AP.
Time-saving is the third reason AP automation has reduced processes time that involves the AP department.
By listing all the primary reasons, we can see that productivity improvement is the main goal behind AP automation.
Three ways automation improves the account payable process?
Invoices that take longer than expected and place in the queue for approval will damage the company’s relations with vendors and delay payments.
AP Automation provides invoice management tools and reports which help to identify bottlenecks and find the pending invoice and the person behind it.
Make invoice management easy:
Approving the invoice and purchases took time because many people and departments were involved, making the process hard. AP automation makes it straightforward to manage the invoice.
Can detect fraud:
Many companies have been frauded due to their manual process; fake invoices were an easy way to fraud.
Ap automation came as a rescue by identifying duplicate invoices and checking invoices number, date and vendor name, items and quantity. It makes it easy for the company to cross-check with the previous invoices, making it easy to detect fraud.