Many accounts payable (AP) departments are still relying on outdated manual processes that tend to be chaotic and time-consuming. This approach often leads to missed or late payments and invoice processing errors that can have costly consequences on the business, damage customer relationships and negatively impact the bottom line.
AP automation represents a necessary step forward for finance departments. Those taking a holistic approach to automating AP can improve financial efficiency and cash flow.
Save time and money
For AP teams, time is literally money. Manually inputting expense reports, processing invoices and creating profit and loss reports are labour intensive and can result in late payments and penalties, which damage credit rating. Furthermore, bottlenecks are caused by time spent looking for missing hard copies of invoices or trying to keep track of where invoices are in the workflow.
Automation cuts down on costly, time-consuming manual processes by routing invoices into secure electronic storage. Invoices in any format are automatically captured, stored in a centralized, searchable repository, and routed to the appropriate contacts needed for approval with pre-programmed workflows. By streamlining routine tasks, your finance team can adopt a more strategic role and collaborate with business leaders to improve performance.
Strengthen vendor relationships
The speed, accuracy and reliability of your AP team can make or break healthy vendor relationships. Missed or late payments, invoice errors, duplicate invoices, invoice fraud, or other issues in the vendor payment process can damage your relationship with current vendors, and your reputation as a reliable customer with others.
Automating AP significantly shortens payment cycles, putting you in a stronger position to negotiate discounts or more favourable payment terms. When suppliers don’t have to chase you for late payments or invoicing errors, you can win their loyalty and create opportunities to further develop profitable relationships with vendors.
AP errors are costly and can take time to fix. Manually inputting invoice data and passing hard copies of invoices between teams often introduces data inaccuracy, delayed responses and lack of visibility. Without a clear and accurate overview, invoices can be left unprocessed, payments can be missed, duplicated or incorrectly processed.
AP automation handles verification and alerts you to any discrepancies such as duplications or illegitimate invoices, making it easier to identify and correct any issues before they escalate. With one centralized, searchable repository and an overview of the complete audit trail process, your team can quickly cross-check when an invoice was recorded, where it is now and who accessed it last. This significantly reduces auditing time and eliminates most inquiries, as employees, finance, and suppliers have self-service access to invoice and payment status.
Control cash flow
When it comes to controlling cash flow, visibility into how and where you’re spending money is essential. Without a clear overview, expenses could start to creep up without you noticing, or un-profitable vendor relationships might go unnoticed.
Automation allows you to scrutinize spending on a granular level, allowing you to track the performance of suppliers and probe vendor claims about return on investment. An efficient and transparent cash flow process also helps you better serve suppliers by providing a self-service portal with access to their own invoices, payments status and other key information.
Increase compliance and regulatory adherence
The ability to track every business transaction without gaps and keep confidential information secure is a must for AP teams. Paper makes this process more difficult to manage and jeopardizes the security of potentially sensitive information.
Automation provides full and proper documentation of all business transactions allowing you to follow a clear audit trail for reporting. Not just booked records from the period being audited, but also emails, letters, or contracts connected with these records can be submitted in seconds to a tax authority or external auditors.
A rights-based security system protects against unauthorized access and manipulation, while multiple encryption layers make sure everything remains correct and confidential. Any regulation changes automatically trigger software updates in the cloud to ensure peace of mind.
Easy to implement. Fast to value.
While any transformation can seem like a big hurdle. Automating your AP process is much easier than you might think. Today, there exist many automated AP solutions suitable for businesses of any size that can be set up and running in days or weeks. Preconfigured and tailored for your business, they can integrate seamlessly with your existing systems and do not require expert knowledge to use the system.
Streamline and transform your accounts payable workflows into efficient and cost-effective digital processes. Find out more about Ricoh’s Accounting Process Services today!
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