With the increase in digitalization and easy availability of affordable software, companies are automating most of their processes, including financial management and accountancy. Account payable or AP automation is an emerging trend, and AP automation software empowers your business by reducing manual processes and freeing up your cash flow. If you are a business executive, especially working in financial services, you can decrease your operational costs and improve your business’s efficiency by introducing this technology. Here is a list of three benefits that using account payable automation software can get your business:
1. Saving Time
Traditionally, invoices had to sit on desks or wait in inboxes for days for approval over long periods. Introducing AP automation reduces delays in invoice processing by streamlining the approval process of invoices, saving your businesses time, and preventing customer frustration. AP automation can save your business processing time of an average of 5.55 days, translating to about 18% fewer days on outstanding payments.
You can integrate specific formulas into your workflow to let staff automatically receive an invoice with programmable reminders. In addition, dashboards integrated into the automation software will give you a real-time view of invoice processing and significantly decrease the time it takes to hunt down specific payments’ status.
2. Low-Cost Invoicing
Going paperless is environmentally friendly and can save a lot of costs to an average business by reducing the paper, printing, and storage expenses. The average monthly cost of manually processing 5,000 invoices manually is estimated to be $64,500. However, processing the same number of invoices through automation will cost you only $8,850, resulting in 85% savings altogether. Account payable automation will help you save on recurring labor and hard costs by reducing supplies for your finance office including the paper, printer, ink, and postage costs for interoffice mailing. This will free up your tied funds from avoidable expenses and enable you to grow and expand your business and higher return to shareholders.
3. Fraud Protection
Digital payment frauds and scams are raising concerns for firms. According to the AFP Payments Fraud and Control Survey, an estimated 81% of businesses faced payment fraud in 2019.
The use of AP automation software will protect your business from such fraudulent activities by providing greater control over the authorization processes. It will enable you to control your employees’ access to invoice approval and release of certain payments. Approval workflow systems can be seamlessly integrated into your software, allowing you to add multiple people into the approval process, which will increase the chances of catching any suspicious invoices before payments are processed. This will decrease your chances of fraud and let you check against missing or incorrect data as well.
AP automation software has become a need for businesses to keep up with today’s competition. If you own a small or medium-sized business and are seeking optimization and growth of your company, it is your best bet to integrate technology and invest in automation software like app automation. This investment will help you mitigate risks of fraud and scams, speed up processing time, and cut down on your expenses, enabling you to grow quickly and efficiently.