AP automation is technology that automates tedious manual tasks involved in processing and paying invoices, so your accounts payable team can focus on strategic tasks.
Stop wasting hours on manual accounts payable invoicing. Accounts payable is one of the most essential functions in any organization, but that doesn’t mean you should spend hours every month on it. Your skills and financial knowledge go way beyond filling in spreadsheets and checking whether invoices have been paid. Too many businesses waste time hunting down invoices and using skilled accounting staff on data entry.
With automation, you can overhaul your business’s AP process by taking back control of your spending, time, and consistency. AP automation solutions give you a single environment where you can see every invoice and every payment instantly, meaning you can keep better, more accurate tabs on your invoices. Automatic digital payments help you manage your books, make payments when it’s best for your business — with fewer errors, and no papers to file. You can rest assured that every payment is correct to the last penny, and every supplier can get paid seamlessly through one simple, centralized place with no papers passing back and forth getting lost in the process.
Lost invoices – Invoices with the wrong PO number, sent to the wrong address or inbox, with the wrong supplier information creates hours of lost time.
So. Much. Paper. – Most companies still have to process archaic paper invoices. That leads to bottlenecks, missing invoices, pointless data entry, and an impossible system for finding archived receipts.
Manual, tedious, and redundant work – Paper-led processes mean that time is wasted on tasks like data entry instead of using that time to be strategic and proactive.
Confusion about payments – When you’re dealing with spreadsheets and record books, it can be a long, slow hunt to find if an invoice has been paid or not.
The way we look at Accounts Payment is changing rapidly. Technology like artificial intelligence, robotic process automation, blockchain, and machine learning empowers modern enterprises to use their Accounts Payable department as strategic players. Best-in-class accounts payable organizations are already using automation to their advantage and are planning for new ways to automate and generate value in the future. But of course, many accounts payable departments still struggle with outdated modes of doing business.
The top challenges businesses face with their AP processes include:
AP professionals express a desire to transform their accounts payable process by moving towards transformation, but it doesn’t appear actually to be happening. What gives? Most companies view AP as extremely valuable to their business, but AP professionals are having difficulty getting executive buy-in. They’re having trouble selling the vision to organizational leadership because only 28% of AP departments have automated their analytics, making it more difficult to back up the argument that AP automation will significantly impact the bottom line.
For the argument for automation to be effective with leadership, AP automation solutions need to prove that they can provide:
Typical AP departments can be siloed, buried under paper, slow, and disconnected. Often, Accounts Payable wait for handoffs from other stakeholders before processing reams of paper invoices across multiple suppliers — buying paper in bulk and hoping to receive payment on time. With automation, every stakeholder has transparency into the AP process, can submit invoices through a centralized hub where suppliers can manage payments more easily, more quickly, and more accurately. Digitization allows for more early payments, better collaboration with suppliers and procurement, and one centralized hub for a clear view of financial information and analytics.
What does it take to create the efficient, productive, and strategy AP department you want? Best-in-class Accounts Payable departments have digitization champions who are:
Changemakers dedicated to change management
Best-in-class accounts payable teams look at change holistically and strategically to build a roadmap for digital transformation. The first thing they do is research and understand which new technologies are most beneficial, both strategically and financially, for the long-term success of the accounts payable department structure and the company as a whole. These teams moved on to greater and more adaptive technology like cloud computing, AI, digitization, and full automation. That allows them to improve reporting and data analytics, automate, reduce costs, increase collaboration, and improve data visibility.
Innovators willing to take risks
Transforming accounts payable means taking a hard look at the way your department functions. Best-in-class departments are willing to make wholesale changes to increase the performance of their teams massively. That promotes a culture that values experimentation for positive change. As a result, best-in-case departments are 48 percent more likely to make electronic payments and 56 percent more likely to process invoices straight-through, translating those risks into positive gains.
Committed to standardization
Best-in-class teams are 52 percent more likely to standardize accounts payable processes across the company. It sounds basic, but a ton of departments still struggle to manage a standard format for invoices. Whether that’s because the process is paper-based, old, or cumbersome, the outcomes are still the same: lost efficiency and bottlenecks. That’s why best-in-class teams recognize the necessity of repeatable processes and use a digital platform to help organize the process.
Best-in-class accounts payable teams realize the importance of a positive departmental image. They’ve adopted a mentality of collaborating and working positively with both suppliers and internal stakeholders. While that may not sound like traditional accounts payable job descriptions, it sets up the team’s groundwork to be a strategic partner for procurement and finance teams. That plays out in the stats: best-in-class teams are more than twice as likely to use their digital insights to partner with procurement and treasury.
AP automation cuts out all those repetitive and simple tasks and eliminates the need for any paper — you’ll never have to waste your time on that massive backlog of boring tasks waiting for you every day. Instead, you’ll get to branch out and collaborate more strategically with other departments in your company. Automation can detect errors and eliminate work done by AP employees, reducing invoice processing time down to less than four days. Automation can also suggest coding, automatically code invoices, and match invoices to multiple types of purchasing documents.
Electronic is not the same as digital. The test is when something changes – do you need to resend a new document with the up-to-date information or do all parties immediately have access to the up-to-date information (ie: live data). The FUD is that people are investing in the wrong solutions when they want to do automation or digital transformation. RPA/OCR is a bridge solution that you’ll need to replace over time.
Tradeshift is the world’s largest cloud-based accounts payable platform. Buyers at businesses like DHL, Air France-KLM, and Volvo use our AP automation solution to settle thousands of invoices every day. Tradeshift provides a cutting edge AP automation solution.