Modernize accounts payable department functions with AP automation
Considering that accounts payable is, in short, the money that your business owes, it is a liability that you want to manage before anything goes awry.
You need to support your accounts payable department and ensure that they have the best tools possible to allow them to do what they’re best at—managing your expenses.
The biggest and easiest way to improve your accounts payable department is to modernize your processes with the help of automated accounts payable software.
Why should businesses modernize their AP process with automation?
Your accounts payable department could spend hours or even days locating paper invoices and receipts, manually entering data, matching invoices, and chasing down the right personnel to get payment approval.
In a case like that, your invoice turnover time will be very long. Manual processes that take up a lot of time will hinder you from being able to perform tasks efficiently.
This is where automation comes in handy. With cloud-based digital systems, you can easily store data accessible to your accounts payable department from anywhere.
There’s no longer a need to file a shoebox of paper invoices. Everything can be accessed from one platform, easy to find and filter by just using the tips of your fingers.
Automation of your accounts payable department functions also makes invoice turnover much faster with the help of features such as automatic invoice matching and mobile invoice approval.
Improve accuracy with your accounts payable department, save time and money, and ultimately keep up with your competition with the help of automation.
In an era where businesses are moving towards hybrid work structures, automation establishes an accounts payable department that can stay connected and work smoothly even when they aren’t physically in the same location.
What are the functions of AP department in the company?
The accounts payable department of your business is in charge of more than just making payments. Accounts payable department functions include:
1. Keeping track of all payments and expenditures
Your accounts payable department is in charge of keeping track of all your expenses, including reviewing, matching, syncing, and verifying them.
It is part of the accounts payable department duties to store the data for cases such as monthly reports and audits.
2. Reconciling processed works by verifying entries
It’s the job of your AP department to reconcile and match your books with your bank transactions and accounts.
All the reconciling done by the accounts payable department also must be recorded, as you may be bleeding money without you realizing it if you don’t have records.
3. Maintaining historical records
One of the many accounts payable department duties is to ensure that all data related to expenses is not only available but also accurate. Having accurate data maintained properly by the AP department enhances audit-readiness.
4. Paying employees
Payments that the accounts payable department is in charge of can be both internal and external.
The AP department is responsible for verifying your employees’ expenses and preparing paychecks for reimbursements, issuing petty cash for day-to-day business uses, as well as sorting out travel expenses.
5. Paying vendors
Your accounts payable team will spend a lot of their time processing invoices, starting from verifying them, scheduling payments, and getting approval on those payments before they are made.
They also will ensure that the payments have been received by your vendors, corresponding with vendors about payments to maintain a good relationship with them.
6. Analyzing accounts for monthly reports
When reviewing data, your accounts payable department has to check for and make sure that there aren’t any errors. This data analysis is done so that they can generate monthly reports.
Monthly reports can identify risks, show trends in your accounts payable, improve cash flow planning, and also guarantees that your company is audit-ready.
7. Continuing to improve the existing payment process
Overall, the accounts payable department duties are to manage cash flow, vendors, and audits.
It’s their responsibility to look at the existing accounts payable processes and pinpoint ways to improve them through various ways, whether it is to speed up invoice turnover time, reduce unprofitable purchases, and many others.
5 strategies for modernizing your accounts payable department
Adopt automated accounts payable software
Modernizing your accounts payable department is almost impossible without the help of automated accounts payable systems. Accounts payable software will help you get rid of manual work to speed up current processes.
This means that you want to look for AP automation software that offers flexibility. You don’t want to have to entirely change your current processes; only to speed them up.
Leveraging Artificial Intelligence for accounts payable
Artificial Intelligence can process the information on an invoice, scanning and filling out the invoice code, vendor data as well as invoice data.
Prevent duplicate invoices or duplicate data entering with AI, and let your accounts payable department take their hands off tedious manual work. They can use the time gained for other tasks instead.
Avoid processing invoices manually
Through digitization, you can easily get everyone on the same page and make the invoice process happen faster on a single platform.
Automation can make invoice processing up to 5 times faster, meaning that you will always have a guarantee that you are paying your vendors on time.
Storing every invoice and vendor data digitally
Storing your data digitally means that data will be easier to find, as there is less of a chance that things will get misplaced or lost. Digitization also helps structure incoming data better.
Rather than data coming to you as pieces of paper, an automatic scan can display your data in a structured manner on your accounts payable software.
Designing approval workflows
By adding approvers onto the stream, your accounts payable department no longer has to wait for long periods of time to get invoices approved.
The entire process can happen on one single platform. Having an awareness of this process will make approvers more likely to be involved, which will then lead to a faster invoice turnover.
Benefits of automating your accounts payable department
1. Get better control and improve accuracy
Automation will also improve your accuracy as there is no longer the risk of costly mistakes in the manual process, and mistakes in accounts payable are costly.
They can compromise your relationship with vendors, diminish your profits, cause you to lose your savings, or even cost your brand reputation. It is beneficial to your business when you stop making mistakes with the help of accounts payable software.
2. Free up the AP team to attend to high-priority tasks
There is no need to manually pull up POs to match your invoices or to chase down approvers one by one.
Your accounts payable department can tend to AP analysis or vendor negotiations and look for ways to save costs instead of being bogged down by administrative tasks.
3. Accurate and timely payments to suppliers
Faster accounts payable processes will save you from potential late payments, and could even score you early payment discounts.
Having all your payments paid accurately and in a timely manner will help you build better communication and relationships with your vendors, making negotiation a lot smoother.
4. Ensures business continuity in challenging times
In the era of remote work, manual accounts payable would struggle, as files would only be accessible in one location.
Having digital cloud-based software, however, will help your employees perform their accounts payable department duties even when they aren’t physically in the office.
No longer will you have to rely on locally stored paper invoices and files. This gives better stability for your business no matter what challenging times you may face.
5. Real-time approval of AP payments
With automation, approvals can happen quickly, as verification time can be reduced. Your CFO will only need to approve and sign off, which can happen remotely. This is especially useful considering the hybrid and remote work models.
6. Increase the visibility of cash flow
Accounts payable automation gives you a full view of your finances. Your accounts payable department can easily oversee where any payment is going at any time. No payments will be missed with automation.
7. Reduce errors
Accounts payable software can automatically detect inaccuracies and inconsistencies. Not only that, but you can also reduce errors from manual data entry such as duplicate entries.
8. Keeps good transparency
Having full visibility of your entire purchase-to-pay process will hold people accountable. You can hold approvers, for example, accountable for the payments that they have approved.
9. Digitizes the entire AP process
Getting rid of tedious manual processes will improve the quality of your work environment and empower your team. Keep your employees connected and informed, and allow your accounts payable department to access data within minutes.
How can Volopay modernize your existing accounts payable process?
The accounts payable department role is to manage all your business expenses. However, that can prove to be a tedious task when you’re bogged down by manual work.
Volopay can help you modernize your existing accounts payable processes and empower your accounts payable department by reducing manual work and allowing you to process invoices faster.