For small businesses or enterprise organizations, finding ways to streamline operations—from leveraging BI solutions to adopting new SaaS technologies—are top of mind heading into the new year. See what Accounting Today says is one big opportunity for driving efficiency in the accounting department.
In my experience as a workplace-management expert, 50 percent of industry accounting personnel say their primary concern is how to manage or eliminate manual processes. They fear mistakes that could not only cost their company money, but a person his job. I’m not just talking about whether your company, your firm or your client’s business is still comparing signed checks against invoices, purchase orders, and bills of lading. In a larger sense, there’s a better way to do business, and accounts payable automation can make a tremendous impact across an entire organization.
Clients may be stuck in the mindset that automated workflow controls were limited to other departments, but the advantages of today’s AP workflow automation will serve the AP team well.
Putting AP automation in motion
Here’s the thing about accounts payable: The cost of doing business the outdated, paper-based, manual way is sky high. Consider how the costs to print, ship, review, manually enter data and handle remittance, to name a few areas, can cost a company anywhere from $8 to $10 per invoice. That’s a huge expense when you are dealing with hundreds to thousands of paper checks.
Think about the lag time when it comes to recalling an invoice for review if you’re shipping invoices to corporate for data entry and reconciliation. AP automation can reduce the number of steps required to keep your business moving forward. Instead of bulk mailings, users can scan, email or fax invoices to headquarters. An automated system provides instant recall for concerned parties instead of having to wait for the transportation of invoice batches.
Now let me move on to the more prominent part of the AP automation picture: Document imaging, where the invoice or other content is scanned for storage. This capture step is a crucial piece to automation, but I encourage companies to go one step further. The data is there — all you need to do now is enable it by establishing a few preset workflow rules, and the result is true AP automation.
Here’s how it works: The right electronic document-management system will include extraction technology that grabs data fields from invoices, and then electronically route that content to the right people at the right time for approval. You can set up electronic approvals and automatically post subsequent data to your accounting application. Set up alerts along the way to keep the process moving. This is a win, as it provides transparency into your AP process.
As company applications begin to stack up, so does data
Electronic document management platforms are ideally suited for AP processing as they work behind the scenes to capture, organize and deliver invoices and supporting content to the appropriate reviewers. Receipts, bills of lading, check images, vendor contracts, invoices and purchase orders are right where you need them to be — in one place instead of scattered throughout various programs. It’s a hands-off approach that takes the pressure off managers to keep track of where everything is in the process. Additionally, you save on shipping costs, hassles, delays and staff well-being.
An even more significant advantage is how information residing in various enterprise applications can speak to one another. If an invoice goes unpaid, for instance, you can set rules in place that trigger tasks in other applications such as accounts receivables. No one needs to make a phone call or breathe down someone’s neck via e-mail. Appropriate users can be alerted about when, and more important, how, to act. AP automation takes the guesswork out of your processes and enables managers to see the full picture of their AP department.
Continuous AP workflows benefit the entire company
An automated AP workflow means real-time access across an organization. AP automation not only grants users instant access to invoices but makes it so review and approval phases are in constant motion. If there is a holdup, you’ll not only know it; you can do something about it.
If you need help deciding what the right system is for your organization, I encourage you to reach out to an expert who can point you in the right direction. My advice is to look for an enterprise content-management or document-management solution that includes workflow capabilities. You can always start small with scan, store and retrieve capabilities, and then add in more functionality when the time is right.
This article was written by Jenifer Barnum from Accounting Today and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
