Accounts payable is the process of paying suppliers for goods or services.
It is a major component of a company’s financial activities, which in turn can be used to improve its overall financial performance.
However, it can also get complicated as it needs a lot of manual effort from employees who are handling the day-to-day payments.
Therefore, it’s not surprising that companies have been using automation to some degree in the past few years.
This article will explain why you should use an AP automation system too.
1. Helps Enable Remote Work
Accounts payable automation makes it easy to manage your AP process across all your locations.
It automates the workflow for you, which means that you can pay your vendors without having to be physically present at their offices.
This helps reduce distractions from the office. It also frees up valuable time spent on tasks including managing invoices or creating purchase orders.
This is especially useful for companies that need to make sure they’re always on top of their budgets and expenses, but without spending tons of money on travel expenses or hiring extra staff members as they work remotely.
2. Helps With Legal and Audit Compliance
AP automation is a great way to reduce the risk of misappropriation, fraud, and erroneous payments.
It can also help you to improve the overall profitability of your business. This is done by allowing you to automate repetitive tasks that would otherwise be done manually.
AP automation takes many forms, but one of the most common methods is matching purchase orders with invoices.
The idea behind this is simple. When you receive an invoice from a customer, it’s automatically matched against your existing purchase orders (POs).
If there are any discrepancies between the two documents – for example, if they include different quantities or prices – then both documents are adjusted.
This is done according to the rules you’ve set up in your system.
This means that all PO payments will be made correctly. It also eliminates the risk of misappropriation or fraud.
3. Helps Improve Cash Flow Management
Accounts payable automation is a way for you to streamline your cash flow management. This is done by automating the payment process.
Ultimately, instead of paying your vendors as they come in, you can set up an automatic payment schedule. You can therefore pay them all at once. The benefits are plentiful.
You’ll save time and money on the back end, reduce risk and stress, and make sure everyone gets paid.
4. Helps Improve Security and Protects Against Fraud
Accounts payable automation can improve security and protect against fraud.
It also improves the efficiency of your business operations, as it frees up time for other important tasks, such as customer service.
Fraudulent payments are often made by cheque, but this is a slow and costly process. With accounts payable automation, the process can be streamlined.
This way, payments are made quickly and with minimal human intervention. There is less chance of fraud occurring, which will help keep your business running smoothly.
Another benefit of accounts payable automation software is that it helps prevent fraudulent payments.
With manual payment processing, it’s possible for someone to make a payment before they have received their invoices.
This could lead to them being charged twice for the same item or service.
Accounts payable automation software helps ensure that invoices are paid promptly as soon as customers receive them. As a result, there’s no risk that they’ll be overcharged or double-billed.
5. Saves Time and Money
When it comes to accounting and bookkeeping, most people don’t understand the time and money they could save by implementing accounts payable automation software.
This is a big problem for small businesses. They don’t have the resources or time to go through the tedious manual process.
AP automation solutions can help you save money and time by automating your accounts payable process so that you can get back to doing what you do best: running your business.
You’ll be able to focus on growing your business instead of worrying about whether or not the invoices or payment requests have been processed correctly.
Conclusion
For small business owners who need to stay on top of the four corners of their business, effective time management is critical.
By implementing AP automation solutions, you will not only be saving tons of cash but saving yourself hours of stress by letting artificial intelligence handle the heavy lifting.
This way you can focus on keeping your business running like a well-oiled machine.