Accounts Payable automation for Construction should be a big cost savings and process efficiency opportunity for any organization. Many organizations are still trying to handle incoming invoice through PDFs or even the mail while there are plenty of accounts payable automation benefits construction companies can adopt. This means lots of manual effort and very little visibility on supplier invoices for the finance team. Accounts Payable automation should be an area of focus for many organizations. Reports have found that the average cost of processing an invoice is $22 USD. Here are a few of the benefits of automating the accounts payable process for a construction company.
Visibility of Invoices
For many construction organizations, particularly those with offices in multiple locations and project sites, supplier invoices are routed through project managers. From there the invoices are validated and entered, often to an Excel spreadsheet. The finance department has little or no visibility on the volume and value of these invoices. This often makes cash flow and profitability of jobs difficult to manage. Better visibility allows for more accuracy in financial reporting.
Reduction in Manual Entry
Manually entering data from a piece of paper or a PDF is not a high-value activity. It is also ripe for error and delays in updating information. Some organizations manually enter the data twice, once from the invoice into Excel and then often from Excel into the financial/accounting system.
Streamlined Invoice Approval
Most organizations have excellent approval processes, they are just negatively impacted by the current manual process. An AP automation software solution can streamline the process by passing information digitally with built in approval logic. It can also provide PO information as well as supporting information like proof of delivery. With everything in one place, the suppliers can track where the invoice is in the approval process.
Increased Supplier Satisfaction
Keeping your good suppliers happy is important in construction as there’s lots of competition for good sub trades and certain equipment is in high demand. Having a more visible, faster supplier invoice process lets your suppliers know they will get paid on time. It also means that your organization may take advantage of quick pay opportunities that are in the best interest of both parties. Having more informed suppliers also means fewer calls to your Accounts Payable team on where their invoice is at, and also minimizes time spent on both sides managing discrepancies.