7 Steps to Improve your Accounts Payable Process with AP Software

accounts payable automation software

The efficiency of processes can be improved through the use of accounts payable automation software. Here are 7 areas where significant improvements can be made with an accounts payable automation software:

1. Remove Paper

Electronic invoices have many advantages over paper-based ones. Even so, a high percentage of invoices are still received in paper format. In order to improve and streamline the process with accounts payable automation software, paper should be removed as much as possible.

Suppliers should be encouraged to send invoices in electronic format. There are significant advantages to them too in terms of reduced cost, enhanced visibility of the progress of invoices towards payment, reduced queries and less errors.

From an accounts payable perspective, it practically eliminates data entry.

2. Centralise Data

Providing central access to invoice data for the finance team dramatically improves cash flow forecasting which in turn can lead to more efficient use of cash.

It also avoids surprises and urgent requests for payments for invoices that have been delayed in satellite offices or even other departments within the same building.

3. Automate the Approvals Process

Approval processes that are paper-based are very significantly slower than processes where invoices are approved electronically. This can be in the order of weeks faster for the least efficient organisations, to several days faster for more efficient organisations.

Getting invoices approved faster provides the finance function with options in terms of when invoices get paid and also reduces supplier queries if approval information is shared with them.

4. Match Relevant Documents

The approval of an invoice for payment usually involves the following:

  • Checking pricing against an original purchase order or against an agreement that is place with a supplier.
  • Confirming that the items specified on an invoice were delivered or services were provided.
  • Comparing invoices against these two key checks can often be undertaken electronically without manual intervention. If discrepancies are discovered, invoices can be routed for manual approval.

If the automated matching process is successful, then there should be no need to check invoices manually and payment can be made when appropriate.

5. Exception Processing

Straight-through processing (automated matching) gives AP staff more time to focus on addressing exceptions.

Where an automated match was not possible, AP staff can engage with staff and will suppliers to get a speedy resolution to the issue(s) discovered.

6. Supplier Self-Service Portal

By providing suppliers with an online portal where they can view the progress of invoices they have submitted drastically reduces the time AP staff spend taking phone calls and answering questions.

7. 24×7 Customer Service

Queries on specific invoices can be raised online and can be routed electronically to suppliers for resolution 24×7, enabling you to process invoice queries at times that are convenient for you.

Next Steps

Take a look at your Accounts Payable process and identify areas where it could be improved.

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Finbarr McCarthy