TechsPlace | Most organizations leverage accounts payable software to lower costs, enhance process efficiency and improve service to stakeholders. But, organizations will never achieve full benefits of shared services environment, if they rely on manual and paper-based accounting processes. Paper-driven processes create significant information gaps that negatively impact processing time, cash management, compliance and control.
The following are some of the issues in accounts payable process:
- Accounts payable and receivable workflows
- Approver response times
- Number of invoices, checks and remittances processed in a specific time frame
- Time spent on exceptions
- Available early payment discounts
- Percentage of early-payment discounts captured
Let’s see how automation can help overcome information gaps, improve visibility and create efficiencies across the procure-to-pay and order-to-cash cycle.
Automation makes it easier to access information across accounts payable and accounts receivable functions. It enables to make more informed decisions by providing a consolidated view of relevant documents and data. Automated accounts payable solution aggregates orders, purchase orders, invoices, and remittances from any source – mail, fax and email and extract critical information such as purchase order numbers, product descriptions, shipping details and dates. Information is filed in a centralized database, ensuring the data is never lost, or mis-routed. Technology consolidates scattered data, tasks and other activities into a centralized system where they can be connected and tracked.
Eliminate Data Silos
Accounts payable systems can be integrated with existing business applications to centralize content and display the related content at one place. This provides staff instant access to all relevant documents including purchase orders, invoices, contracts, remittances, without even searching for information on paper.
Integrating with third-party solutions allows users to access general ledgers, payment terms and policies. What’s more, integration with email applications such as Microsoft Outlook allows you to manage transactions directly from the inbox to keep accounts payable and receivable processes on track. Integration with email apps promotes greater user adoption since staff can work within familiar email application.
Gaining visibility into accounts payable and receivable information allows for more accurate cash flow projections and better planning of financial health of the business. Automated AP solutions facilitate easy and accurate reporting by providing detailed visibility into invoices and payments in the workflow. Technology also improves cash management by enabling organizations to predict cash requirements more accurately and better manage accounting and finance reporting process. Also, instant access to the data allows you to resolve issues more quickly and capture early payment discounts through faster cycle times.
Better Service to Suppliers and Stakeholders
Relationships with customers and suppliers will suffer when you cannot access the data required to quickly and accurately respond to inquiries. Automation provides customer and other stakeholders instant access to orders, invoices, notices and other information required to resolve issues. The system automatically connects invoices with related documents such as proof-of-delivery statements and distributes to customers through email to help eliminate potential confusion about billing. Supporting orders with invoices, payments and other documents can help staff respond more quickly to customer inquiries.
Automated AP solutions can help create well-defined processes and impose policies strictly. Enforcing policies consistently minimizes process inefficiencies and associated risk. The solution provides complete audit trail for every invoice or payment, including approvals and exceptions. All the documents are electronically filed in a single, secure database. With the data stored on a centralized location, users can quickly identify missing documents, so the payments can be processed quickly. Automated solution provides accountability by providing a detailed auditable history to monitor AP processes. The technology allows supervisors manage electronic queues for accessing work and offers faster access to documents supporting invoice payments. This allows companies to reduce the chances of costly penalties and fines.
AP solutions accelerate cycle times by providing complete and clear visibility into staff workload and the time spent in processing transactions, allowing managers to quickly identify bottlenecks and make necessary adjustments. Cycle times can be reduced by automating the verification of captured data such as products, quantities, item numbers, prices and billing data –against any information available in the system. Verified documents and information will be automatically routed to decision makers or business units at every step of the accounts payable or receivable process. With verified data, decision-makers will not take much time to compare documents and information between systems. Dashboard allows you to monitor transactions and allows administrators to change information workflows in the real-time. Access to information from the mobile devices would allow consultants, field agents and stakeholders to approve invoices or resolve any issues on-the-go. As all documents and information are stored in a single system, the data can be instantly accessible on-the-go.
The Need for Visibility
The finance departments need visibility into the information and other documents. Increasing demands for financial visibility is no surprise when controllers rank cash flow analysis as the important job function. Businesses regularly track and report on cash flow against current expenses and critical financial metrics. Organizations want to leverage financial departments to influence business outcomes and help manage financial data to make strategic decision-making.
Visibility into accounts payable and accounts receivables can help identify cost-saving opportunities and figure out bottlenecks in the process. Lack of integration and visibility into the order-to-cash cycles helps businesses achieve the objectives. Decision makers across order processing, billing, and collections need to work with the latest information, which becomes extremely difficult when they do not have access to the same applications every time. This would create billing delays, if the documents and information is not easily accessible. And, delays in receivables may delay shipments to customers. Moreover, it would be difficult to manage cash flow effectively without having visibility into customer payment terms. This would in turn result in accounts payable department not having access to the information in receivable processes.
The Bottom Line
Accounts payable and receivable operations may fail if you do not eliminate the information gaps caused by paper-based processes. Technology centralizes and processes critical accounts payable and accounts receivable processes with extensive integration and mobile capabilities for users on the go. With accounts payable software, AP professionals spend less time handling and searching for information on paper and more time analyzing the data to support strategic objectives of the enterprise. This ensures that organizations achieve the full benefits of automation.
Marrisa Levin is marketing consultant and freelance writer at SutiAP, who regularly writes articles on Business, Finance, ERP and Cloud/SaaS trends.