There isn’t a single business in the world that doesn’t have an accounts payable process. With a sudden rise in the number of businesses opting for an automated accounts payable process. After the shift to complete digitization of workplaces, there was a notable rise in faulty AP systems.
Aside from the tedium of piled-up paperwork and a tangled approval line, manual AP also proved to be a glaring security flaw and payment frauds. With regards to business integrity, accounts payable automation is more than just a convenience. It is becoming a necessity. Choosing the right accounts payable software is no easy task, though. But we’ve definitely made it easier for you to understand how accounts payable automation works, and the benefit of accounts payable automation for your business. Let’s dive in!
The manual AP process might not feel like a very long one, at first glance. Unfortunately, it can quickly become one of those things that you don’t realize are difficult until you find yourself buried under piles of receipts, paperwork, due payments, and lost records. How is that possible? Well, consider all the elements that are part of accounts payable process.
There is receiving invoices, sorting and assigning them, manually entering them into the accounting software you use. It doesn’t end there. These invoices then need to be tracked for timely payments, and approved by a designated team member. They are also stored for any future reference or paper trail. A sizable amount of time and effort can go into AP, especially if your business is scaling. As more vendors and payments get added to a cycle, the higher the chances of human error. It also increases the number of people involved in the web.
The cost of manual labour is a steep one (sometimes as high as 60%, according to multiple studies). Not only is this inefficient and expensive, it also creates a long list of work. Invoice entries can easily be missed, or accidentally duplicated. Oftentimes, approval processes can take long hours, even days and weeks. Manual data entry also results in lost work hours and a high risk of information loss.
Management mistakes can take place on an object level (invoices, purchase orders, payment receipts, payment errors) and on a human level (multiple parties involved in handling the same information). Mismanagement of accounting data has not only caused businesses to lose track of their entire AP process but also prevented them from efficiently closing gaps before they become wider.
We’ve mentioned fraud and theft risks earlier. Those are given with an AP system that involves follow-ups and error-riddled bookkeeping. Manual AP has also significantly harmed the scalability of businesses. With large budgets and labour hours going into account management, businesses are unable to allocate budgets towards growth and team expansions. Efficiency is hitting an all-time low as businesses remain away from accounts payable automation.
The advancement in fintech, and the level of customisation to business needs, allow accounts payable software to cater to the very specific and unique needs of different businesses. Integrated suites like Volopay are purpose-built spend management tools that eliminate the painful administrative work that goes into AP.
Accounts payable automation for small businesses can benefit from such systems, which bring together all the tools required for a business to make payments. These can range from petty cash and corporate credit cards to vendor payments and credit lines. The all-in-one platform allows an end to end automation of accounts payable. There is visibility and transparency behind all payments. Approval processes are instant, as are budget allocations. Moreover, the digitisation of invoice management makes manual labour the bare minimum.
The benefits of accounts payable automation are numerous. Attempting to explain them in one blog post can be arduous - but we’ll try our best so that you can understand the revolutionary solution that is at your fingertips. We’ve established that accounts payable software has the ability to eliminate manual labour and bring in cost efficiency. But how exactly does that happen? Let’s take a look.
Cost reductions associated with switching to automation come in the form of eliminating labour costs, and binning costs of physical office products. Paperless accounts records have become an expectation for sustainable initiatives in 2021. But the savings on switching to paperless and automated expense systems can be as high as 60-70%. These margins can have a massive impact on growth metrics, which is why accounts payable automation for small businesses can be a path-altering choice.
Manual accounting is a time consuming process, not just because of the actual time taken for making records (although that is definitely a huge chunk of it). A significant amount of time is also wasted in long approval times. Invoices can get lost. Payment orders can get stuck in a loop of finance and management approvals. Budget allocation and fund requests can remain pending. All of these waiting games are roadblocks to efficient accounting. With automation, they can all be removed, and increase speed as well as productivity hours.
Automating your accounts payable process brings in total control over approvals and financial policies. You can generate physical and virtual cards, set limits on them, and attach them to budgets of your choice. Funds for cards and budgets have real-time approvals, aided by the presence of the web and mobile app (as well as email integrations). Every purchase order and transaction is visible on admin dashboards to allow for a seamless audit trail.
Margins of human error exist with any manual process. However, automation helps catch these errors in time. Since there is no need for manual inputs, things like invoice labels, transaction details, and line-item data can be screened and automatically transferred across platforms. Automation also prevents duplication of payments to vendors. The secure processes of automation software also protect the company from fraudulent entries, missing entries, or data loss.
One of the largest benefits of accounts payable automation is the integration of accounting softwares with your AP software. Integration of systems removes the burden of manual coding and labelling of transactions. Instead, systems like Volopay’s allow you to directly transfer your transaction records and receipts to accounting software like Xero, Netsuite and Quickbooks. This makes auditing transparent and rapid, and also makes cross-platform verification easier.
Although not universal with all automated accounts payable, Volopay’s management system offers unique awards for timely payments. Opportunities for cashback with our supplier network can help boost your income by earning returns in exchange for early payments. This automated setup prevents you from worrying about payments in the future. Foreign transactions on Volopay cards also earn you a no-nonsense 1-2% cashback (no points, no coupons, straight cash).
The presence of unlimited virtual cards also makes accounts payable easier, especially if you’re looking at accounts payable automation for small businesses. With physical card allocation being limited, Volopay’s virtual cards can help pay vendors for fixed vendors (such as Amazon Web Services, Google Ads, G-Suite, MailChimp, etc.) You can also create burner cards for short-term usage to record credible transactions without the commitment of a new physical card.
Cross-border payments, as well as domestic ones, can be collectively managed via the Volopay spend management platform. B2B payment is supported in 130+ countries, with the lowest possible processing cost. Volopay’s Bill Pay feature helps you handle transactions in multiple currencies across cards and accounts.
Approval lines are also easy to manage on Volopay. Budget allocations and requests for fund additions go directly to assigned managers. They can approve within minutes, either through the web platform or even on their phones. Your employees never have to find themselves stuck without funds, or unable to make vendor payments. All these approvals and transactions are synced against your accounting software for easy tracking. You can also activate multiple approvers for better accountability.
Our invoice management system helps you collect and pay invoices, with each record completely trackable.
The clean user interface makes it easy to manoeuvre without requiring in-depth technical knowledge or computer expertise.
Volopay helps us reduce time, effort and cost in expense management, and give us generous cashback.
Jimmy Lee, Director of Finance, Beam Mobility
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Automated approval workflow, real-time reporting, and accounting integration, are some of the necessary features of AP software.
Simplify the accounts payable process so that the AP team can save countless hours on paperwork and focus on the important tasks.
With the accounts payable automation, you can improve vendor relationships, prevent invoice duplication and pay the vendor on time.