Keeping clear, easy-to-understand accounting records is the backbone of doing business—you need insights in your business’s financial performance, but also an easy way to keep track of records to stay compliant with regulation. But that’s just the beginning of the benefits of accounts payable automation.
In this blog, we’ll go into the ins and outs of accounts payable workflow automation , the benefits for business, and how you can automate your own workflow.
Just What Is Accounts Payable Workflow Automation?
You’ve heard other companies are saving thousands of hours on repetitive work across departments, and the potential for your accounting department is certainly no exception.
Accounts payable workflow automation is an automation-driven process that streamlines and optimizes the management of a company’s financial obligations to its suppliers or vendors.
How Does AP Processing Automation Work?
As an example, your AP process typically starts when you receive an invoice from a supplier. The software then extracts key data, such as your invoice number, due date, and amount, through optical character recognition (OCR) or other means.
This data is validated, matched with corresponding purchase orders, and checked for discrepancies. Once verified, the invoice is routed for approval through a predefined workflow, ensuring timely and appropriate review.
AP automation provides real-time visibility into financial data, enabling better decision-making and financial control. Plus, your AP department will thank you for providing a tool that makes tracking finances easier.
Additionally, more and more businesses are adopting accounts payable workflow automation , and the proof is in the growth numbers—the AP workflow automation market is set to grow 10% through 2032.
The Top 6 Benefits of Automating Your Accounts Payable
From practical solutions to overall positive impacts to your workflow, let’s get into the benefits of accounts payable automation .
Real-Time Financial Data and Analytics
AP automation provides real-time visibility into financial data and offers detailed analytics, allowing your business to make informed decisions about cash flow , budgeting, and financial planning. Thanks to this information, you’re better able to manage finances from end to end.
Additionally, with these insights, you get updates on invoices and payments, allowing your business to quickly identify any discrepancies or issues. You’ll also get an eagle’s eye view into spending patterns and trends. Find areas where they can reduce costs, negotiate better terms with vendors, or make strategic investments.
Better Relationships With Your Suppliers
Prompt and accurate payments, with reminders from your automation software, foster trust with suppliers, contributing to stronger business relationships. Automation also provides better visibility into payment statuses, enabling prompt resolution of disputes or issues, further enhancing supplier satisfaction.
Reduce the risk of errors and disputes in your payment process. This can help avoid misunderstandings and improve the accuracy and timeliness of your payments. Your vendors can benefit from real-time insights too—when you give them the tools to access payment status and history.
Electronic Audit Trails
With an electronic audit trail, keep a chronological record of all financial transactions related to a particular account or process. In the case of accounts payable, an audit trail can provide a complete history of invoice approvals, payment authorizations, and any other actions taken during the payment process .
These trails can be easily accessed and reviewed by authorized personnel, providing transparency and accountability throughout the payment process.
Reduce the Time Needed for Accounting by 80% to 90%
Save Time With Optimized Operations
Automation streamlines the accounts payabl e process, reducing the time and effort required to manage invoices and payments. As you streamline processes and reduce manual input, automated accounting systems can generate reports and reconcile data automatically, saving you time from the start.
Your automated systems also provide alerts and notifications when invoices are received, approved, and paid, allowing your business to quickly respond to issues.
Ongoing Cost Savings
One of the biggest ways you save within automated accounts payable workflow is reducing the cost of manual processing, and by extension, eliminating the need for manual data entry, invoice routing, and approval processes.
Reduce the risk of late payments and penalties—you have better insight into your financial workflow, so invoices are processed and paid on time, avoiding late fees and penalties.
If you have a good relationship with your vendors, you might also be able to take advantage of early payment discounts. Many vendors offer discounts for early payment, but these discounts are often missed due to manual processing delays.
Easily Comply With Regulation
When you keep easy-to-read, accessible financial logs, it becomes easier to comply with regulation. By automating repetitive processes for your AP team , ensure that all invoices are processed and paid accurately and on time, reducing the risk of errors, omissions, or fraud.
Automation can also provide secure data storage, access control, and auditing capabilities to ensure that sensitive financial information is protected from unauthorized access. (Complying with regulation more easily also ties in with electronic audit trails.) Keeping this information secure is just another benefit of accounts payable automation .
Build Business Better With 1Rivet
From automating your accounts payable workflow to getting rid of the input problems caused by human error , you need a team of automation experts on your side. Testing to deployment—we provide ongoing support every step of the way.
Purpose-built for your accounting workflow, our automation software saves you time on needlessly repetitive work from day one.
Find out for yourself how much money and time you can save with automation. Book a free consultation today.