Top Benefits and Best Practices to Accounts Payable Automation

Recently updated on December 6th, 2024 at 06:12 am

You probably already know that accounts payable (A/P) refers to money owed to suppliers, service providers, and products when the service or tangible goods have already been delivered. These are essentially short-term debts that your company needs to pay.

Your AP workflow is the procedure you use to add these debts to your system and pay them off. For some accounting firms, this process is still manual. But it can be automated and be a valuable service that you offer to clients.

Benefits to A/P Automation

Automating accounts payable comes with many benefits for both you and your clients.

Time

Saving time is one of the main reasons to automate AP. When an invoice comes in, entering it into your system, paying it, and reconciling can all happen automatically while you do other things.

Streamlined Processes

Depending on how you set up your accounts payable process, approvals usually happen more quickly with automation. This makes everyone involved in the process happier.

Better Insights

When your invoices are digitized and part of your automated process, using the resulting data in your business intelligence software is simple.

Data Availability

With A/P automation, if there is ever an issue, you don’t have to dig through mounds of paper or search in accounting software. The process will connect to existing software, so it is easy to find and fix issues.

Quick Audits

Having all the necessary data available in your automation software makes auditing records quick and easy.

Discounts From Vendors

Often vendors will give discounts for payments that are made on time. When automation makes sure every payment is on time, you can negotiate better contracts with your vendors.

Better Vendor Relationships

Not only will you be able to get better deals from vendors, but you will also stand out among their customers and get better service.

Less Fraud

There is less potential for fraud when using the AP automation software because of its checks and balances and end-to-end tracking.

Integrates with Your Tech Stack

A/P automation software is designed to work with your current data sources and applications. This means setup can be a piece of cake.

Less Paper

Once your firm embraces automation, you can finally ditch paper invoices. There will be no more lost invoices and late payments.

How to Get Started

Here are the basic steps involved in automating accounts payable for you or your clients.

Analyze Your Current Process

The first step is to look at your current accounts payable process to determine how automation can help you. It is most likely similar to this, with some additional details that could be custom to your industry or company:

• Get an invoice.
• Enter it into the system.
• Get it approved.
• Pay the bill by check or another payment method.
• Reconcile the payments,

Document Your Ideal Workflow

Once you have your current workflow mapped out, you can determine where the bottlenecks are and how they can be improved. Do employees need to complete a survey before making requests so that the approval process is quicker? Are you missing out on better deals from vendors by paying late? Will convincing some vendors to take credit payments speed up the process?

Get Automation Software

When looking for A/P automation software, you will run into many options. You can vet these options by checking online reviews from reputable sources. Also, make sure the software will work with your current accounting tools. You will also want to make sure your software provider can give you support when it is needed.

Implement the Software

Your software provider should help you with its implementation and ensure everything is running correctly before it goes live. But don’t stop there. Make sure they provide training materials so your staff can get up to speed.

Test and Roll It Out

Finally, before you roll out the new solution, it should be thoroughly tested. Your solution provider should also be able to help with this because they have been through the process dozens or hundreds of times before.

PathQuest® AP is a smart accounts payable automation software that helps to streamline and collaborate accounts payable documentation, communication, and purchase orders with ACH, credit cards, and check payment in a single interface.

Find out how you can benefit from AP automation by booking a demo.