The accounts payable process has long been a source of headaches and bottlenecks. Now AP automation is digitally transforming how businesses handle invoicing, approvals, and payments.
With AP automation, companies can leverage a more efficient, accurate, and cost-effective approach to managing their accounts payable and catch errors early before they spiral.
In this article, we’ll explore all the features and benefits of this innovative and automated accounting approach. So, get ready to discover how this cutting-edge technology can transform your business and take your financial management to new heights!
Here’s what we cover:
What Is AP Automation?
Why Do Companies Use AP Automation?
What KPIs Should You Measure When Implementing AP Automation Software
What Features to Look For In Accounts Payable Automation Software
3 Key Takeaways
AP automation (sometimes called AP invoice automation) uses software to streamline, manage, and automate your accounts payable process.
The traditional accounts payable process is slow and error-prone, but AP automation makes it fast and accurate. The system expertly manages tedious manual tasks, such as invoice data entry, matching, and handling paper documents, liberating your team to focus on more strategic and value-added tasks.
With AP automation, accounts payable invoice processing requires zero or minimal human intervention. The entire accounts payable workflow is managed digitally. You get a paperless, single source of truth for the AP process, giving you a 360 view of accounts payable.
Some key features of AP automation include:
No more towering piles of invoices on your desk, days hunting for missing files, or endless pursuits of payment approvals; it’s easy to understand why companies use AP automation. The right AP automation software provides access 24/7 from any device, making the process as accessible as it is streamlined.
Here are some of the core benefits of AP automation:
It all sounds great so far. But is this just another technology that sounds good but fails to deliver real results?
The first step in any software implementation strategy is setting SMART goals and measuring results. These are some of the critical metrics many businesses like to track.
The average cost per invoice–how much it costs to process a fully-loaded invoice–can be as much as $21, according to the Institute of Finance and Management (IOFM).
This figure depends on numerous factors, from company size to industry, location, and product selection. But perhaps the most significant determinant is the degree of automation in the accounts payable process. DocStar ECM AP Automation can reduce the average cost to under $3.
The average number of invoices processed by a full-time employee is influenced by various factors, such as the individual’s skill, experience, and training. In addition, company size, internal policies, procedures, and workload distribution play crucial roles.
However, accounts payable automation can significantly impact this metric, potentially trebling the average capacity of invoice processing from around 4800 to around 1400.
The average invoice cycle time is the duration it takes to process an invoice from receipt to payment. The average is just over 17 days. AP automation can shrink this number to just under 4 days by reducing complexity, catching errors, and quickly resolving disputes. Faster cycle times improve cash flow management, increase early payment discounts, and lead to stronger customer relationships.
With a plethora of accounts payable solutions available, it’s essential to establish well-defined criteria for selecting the ideal option. You don’t want to waste money on features you won’t use, but there are some you can’t do without. If the must-haves below are missing, keep looking!
While it may seem obvious, it’s astonishing how frequently companies are distracted by flashy features and overlook the importance of usability. During your product demo, focus on the simplicity of implementation and day-to-day functionality for different user groups. If the system proves overly complex, it will challenge user adoption.
Intelligent data capture uses machine learning and OCR technology (Optical Character Recognition) to extract data from scanned paper documents, emails, images, and other relevant sources. It transforms unstructured information (often trapped in paper invoices) into structured data that humans and computers can quickly analyze.
Employees waste tons of time sifting through filing cabinets and heaps of paperwork in search of crucial documents. AP software streamlines this process by ensuring fast, easy access to essential information, allowing the right people to retrieve the right documents when needed most. This accessibility boosts employees’ productivity and lets them focus on more value-driven tasks.
AP automation should increase not only the accessibility of invoices and related data but also their usefulness. Relevant, accurate, timely, and comprehensive data should be displayed clearly and in a user-friendly format, enabling users to derive actionable insights that inform decision-making and strategic planning.
To enable comprehensive automation and optimize AP workflow, your AP automation solution must integrate smoothly with other back-office systems, such as accounting, HR, and ERP.
Seamless integration guarantees synchronization across all systems, allowing every team to access consistent and current information and fostering improved collaboration and communication.
Even if integrations aren’t required immediately, opt for accounts payable automation solutions capable of accommodating future integration with any new cloud or on-premises systems you may adopt down the line.
Get a 360° view of accounts payable automation software from education to execution, DocStar has you covered with tools that empower your AP team to work smarter. Take the tour, than get in touch with DocStar to learn more.
