Imagine transforming your accounting processes with a single decision- Accounts payable automation (AP Automation) While the potential loss of crucial data and the high initial cost of software might seem daunting, the long-term benefits far outweigh these challenges.
In recent years, the demand for accounts payable automation has risen significantly. According to a recent report titled, Accounts Payable Automation Market, the global accounts payable automation market was valued at $5,378.58 million in 2023. This market is expected to grow at a compound annual growth rate (CAGR) of 13.9% from 2024 to 2032, reaching an impressive $17,047.16 million by 2032. This substantial growth underscores the increasing recognition of automation’s efficiency and cost-saving benefits to businesses.
With an ever-growing pool of trained professionals and a surge in automation initiatives, the path is clear for businesses to seize lucrative opportunities and drive growth.
Discover how accounts payable automation can improve your financial operations, bringing efficiency, accuracy, and scalability to new heights. In this blog, we will cover ten key benefits that Accounts Payable Automation brings to the table.
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10 Key Benefits of Accounts Payable Automation (AP Automation)
Automation refers to using technology to perform tasks with minimum or no human assistance. Thus, accounts payable automation automates accounts payable to reduce operating costs, save time, and reduce errors. It enables businesses to digitally submit invoices, manage approvals, and process payments using a cloud-based and unified platform.
Accounts payable automation can also help mitigate fraud risk by providing business owners with detailed insight into their financial records at every step of the AP workflow.
Accounts payable automation can provide SMEs with streamlined, efficient, and tailored workflows that are tailored to their business needs. Unlike manual AP workflows, AP automation is timely, transparent, and secure.
By automating AP, accountants can save time and focus more on the strategic areas of their divisions that may require their increased attention.
Here are the 10 key benefits of accounts payable automation:
1- Accurate Financial Records
To err is to be human. While manually entering data, one can be prone to errors, which can lead to costly consequences for the business. This is where AP automation comes in: by mitigating such risks and ensuring transparent and accurate invoice processing, it ensures that stakeholders are making financial decisions based on correct and reliable financial data.
2- Saves Time
Since AP automation requires minimum human assistance, it frees up your resources, who can then allocate their time to strategic business areas. This can help ensure that the company’s resources are working efficiently to help the firm gain a sustainable foothold in the industry.
3- Streamlines AP approvals
AP automation software contains built-in features that, once set up, streamline the invoice approval process using specific conditions so that you do not have to repeatedly go through time-consuming approval processes. This helps ensure timely approvals, less paperwork, and no need to run after stakeholders to get their approvals.
4- Clear Audit Trail
Manual invoices can be hard to find and maintain in a large database and are more likely to be lost. It is important to keep track of these invoices for audit purposes. AP automation minimizes this risk by providing a comprehensive digital record of every transaction, ensuring a clear audit trail and making compliance easy. These invoices are stored on a cloud-based platform, which is more secure, accessible, and reliable.
5- Reduces Costs
With manual AP processes, the more invoices your business generates, the more work there will be done. This can lead to increased payroll costs. AP automation reduces costs by minimizing manual tasks and reducing errors. In the long term, AP automation provides low costs per invoice, delivering substantial savings. Moreover, AP automation also secures your invoices on a cloud-based platform, which you can access anytime without rummaging through a whole invoice database.
6- Highly Secure and Manageable
AP automation software such as Sage Intacct offers strict controls and protocols that can ensure the security of your company’s finances. This helps mitigate the risk of fraud and cyberattacks. Automated APs also help ensure transparency and accountability across your organization by keeping everything in one place in a highly accessible way.
7- Remote Work Friendly
AP automation is a hybrid and remote work-friendly model, allowing the AP team to stay proactive and updated with financial entries. Unlike manual entries, you do not have to send a picture to another person so he can assess the invoice. In automation AP, invoices are uploaded on a cloud-based platform where credentials are given to finance team members. This enables them to access and evaluate the firm’s financial information and plan accordingly.
8- Ensure Scalability
Amid the increasing demand for services and products, the invoice number simply tends to increase. With this, hiring many resources might cause your firm to struggle financially and not meet your financial goals. With automated AP, however, you can organize your invoices on a single platform and focus on strategic business areas. AP automation also prevents duplicate invoices, as the software uses accounting-friendly features that ensure smooth accounting workflows.
9- Strengthens Supplier Relationships
AP automation can also help develop and strengthen supplier relationships by ensuring that dues are paid on time, which keeps the suppliers satisfied and builds trust. This ensures streamlined workflows.
10- Access to Real-Time Financial Data
Automating APs can also help you gain access to real-time data and charts, which you can use to measure the financial performance of your firm. Moreover, this data can also help you stay updated with industry trends and evaluate your efforts, changing the course where you feel necessary.
How to Automate Accounts Payable
Before automating your accounts payable, you must evaluate your business needs. A best practice would include consulting a finance expert on this who can help you find the best software solution to meet your business needs. IT-driven custom builds and built-in ERP add-ons may not be appropriate for automated AP software. Make sure the AP software meets your business needs regarding scalability and service.
You can also outsource your accounts payable and speed up your financial operations with E.A.’s Accounts Payable outsourcing services. Our experts ensure a seamless process and optimize your accounts payable, empowering businesses to thrive.
Conclusion
As the industry continues to pace forward, automation is becoming the norm. From marketing to finance, business owners automate repetitive processes and encourage their teams to focus on strategic business areas. Imagine you hire a fresh resource who may have optimistic ideas for your business to grow, but you make them do repetitive tasks. This would not only be an undesirable outcome for your business, but you may also lose a valuable employee. To retain employees, automate the basic accounting workflows and involve them in key business areas to make them feel important and get access to promising ideas for your ventures.
