The process of any Accounts Payable area is to manage all invoices that come from its vendors are reviewed for accuracy, approved, processed, and then paid. In some businesses, all of these steps are completed from beginning to end manually. However, since the technology is available through the development of various kinds of software applications, the steps above can be completed via AP automation. AP automation is a preferred option in many businesses today since it saves time, increases accuracy, eliminates unnecessary delays and helps to reduce costly headcount to the organization.
Because of all of the benefits of automated these types of manual processes, it is not uncommon for some of these steps to be automated, while others are still being performed manually. Based on the organization and their needs, here are some of the Accounts Payable processes that many companies want to replace with the right types of software products.
1. Front End – Invoice arrival and categorization
Though there are many steps in an AP process that can benefit from automation, one of the most important is really on the front end, particularly because is where the process actually starts. Because invoices can be submitted in many different ways and in various types of formats, the paper submissions should be replaced with an image of a digital counterpart. In short, the paper system needs to be replaced for the vendors so that all invoices are submitted via electronic transmission.
By changing this initial part of the manual process, every invoice becomes a paperless process that can be viewed and retrieved from a centralized database that saves time and increases the organization’s overall efficiency in any Intacct accounts payable organization.
2. Routing and approval Processes
The managing of invoice payments can be a fairly complicated, extensive and time-consuming process. Even though paying all of your vendors quickly by a certain date may sound simple and easy to do, in some companies, these payments may not be simple or quick to do at all. For instance, before an invoice for a vendor can be paid, there is normally a routing an approval process that it must go through before it can actually be paid.
While this process can sound time-consuming and can extend to a matter of several days, this is also true for companies that handle these processes manually. Therefore, once the front end part of this process has been completed automated, the routing and approval process should be the next phase of the automation. For instance, instead of a paper invoice lying around on the desk of someone in an upper management position for days without handling, it can be routed electronically for final approval to several people within a matter of minutes to an hour.
3. Retrieval of the Invoice
Another significant part of automated invoices in any AP organization is finding the invoice that has been submitted. Because some invoices may be paid quickly while others may be delayed, it is not uncommon for a vendor to call to request an update on what is happening. To keep goodwill with vendors and the services that they supply for your company, you need to always know where the invoice that was submitted is and what needs to be done.
In some cases, it may have already been approved for payment but the payment itself has not been issued. Whatever the case, the person that processed the invoices or someone else in the office should secure the exact information that is needed. With a paper process, a quick update is not always as easy as someone would think. Since the person may have to go through large volumes of physical paper invoices to find it. On the other hand, when these processes are automated with an OCR image of the invoices, it can be retrieved within seconds and an update on the processes can be given without any delay.
AP automation is an ideal replacement for many of the old AP manual processes that employees are responsible for today. Fortunately, there are many parts of this process that can be automated for efficiency, including changing the front-end paper process to electronic submissions and automating rounding and approval procedures via the latest workflow features.