5 Convincing Reasons to Automate Accounts Payable
When paper is used to manage invoices, AP might as well stand for “annoying process.” At best, hardcopy invoices cause a brief interruption in your day—at worst, they get lost on someone’s desk and you have to contact the vendor for a new copy.
Below are five telltale signs your AP process needs to be digitized and automated.
1. Lack of Autonomy
Tracking down the status of an invoice or purchase order (PO) feels like a days-long game of telephone. An employee inquires about an order, you defer to an employee in accounting, she asks the senior accountant…and eventually an answer arrives.
In a manual AP process, only the person with the document in hand knows its status. However, when an organization uses a document management system, any authorized user can view the status and activity of that document. With the added benefit of automation, employees can receive instant email notifications when an invoice requires attention—no searching required. The ability to independently locate and receive documents saves time and effort for you, your employees and your AP department.
2. Busy Work Blues
A department head’s goal is to manage people, not paper. But when you have to scan, fax or walk every document to the AP department, you have less time to devote to your employees.
By converting all AP paperwork into digital files (or better yet, having them start off in a digital format), organizations avoid the nuisance of shuffling invoices and POs from desk to desk. Additionally, an automated AP system can calculate totals, cross-reference invoices with PO numbers and send notification emails to everyone involved in the process. The busy work is still getting done, but you don’t have to do it.
3. Turnaround Time Terrors
The time you spend routing and signing documents affects your employees’ productivity as well as your own. Anyone who submits a PO knows it could take days before the vendor even receives the order. You want your team to get what it needs to work, but that goal becomes more and more distant with every paper document that lands on your desk.
Instead of impeding projects, an automated AP process expedites the time between ordering and receiving. Not only does it eliminate the need to physically route documents, it also reduces the need for manual data entry, calculations and quality control. A document management system, for example, can extract information from an electronic PO or invoice and store it in a repository. Reduced manual transcription means reduced chance for data entry errors and processing delays.
4. Too Many Idiosyncrasies
Not every PO follows the same path from employee to vendor. POs typically require sign-off from different approvers depending on the dollar value of the order. Remembering who needs to sign what type of PO does not contribute to a quick and effortless process.
Another useful function of document management software is the conditional routing of documents. This type of system can determine, based on the information provided in the PO, whose approval is required. Once these conditions are established in the system, it can run thousands of times without error, giving you one less detail to remember about the AP process.
5. Finger Pointing Problems
Signing paperwork is quick, but when an important document goes missing it pulls you away from work indefinitely. In the worst-case scenario, the invoice never resurfaces and those involved start to blame each other for its disappearance.
Document management software prevents this scenario in three major ways:
- It electronically stores documents, eliminating the risks associated with tangible files.
- It tracks user activity so you can see who has viewed, edited or approved a file.
- You can establish user-based security rights to prevent unauthorized people from using—or destroying—electronic files.
Through these measures, you’ll always know who has handled an invoice or PO at every stage of the AP process.
Want to learn more about the strategic advantages that can be gained by implementing an AP automation solution? Check out this infographic and see how process automation can help your organization gain a strategic advantage and tackle the challenges of invoice processing.
