Accounts Payable Automation is On the Rise – Should You Look at It?

As businesses grow, managing finances becomes increasingly complex, especially the accounts payable function. From invoice processing to handling vendor relationships, accounts payable requires dedicated time and resources. This is where accounts payable automation comes into play.

In recent years, accounts payable automation has become essential for businesses of all sizes. It helps companies overcome numerous challenges and offers significant benefits. The global accounts payable automation market is projected to reach $7.24 billion by 2030, growing at a CAGR of 11.2%. Let’s explore why businesses should consider automating their accounts payable processes and how an experienced account payable service provider can help.

Let’s jump right into it.

1. Data Inaccuracy 

Manual data entry in accounts payable is prone to human error, leading to costly mistakes. These errors can delay payments and create discrepancies in financial records.

2. High-processing Costs 

Traditional invoice processing methods are expensive. Data shows that processing a single vendor payment manually can cost up to $8 or more, especially when errors are involved.

3. Inefficiency

Accounts payable professionals spend most of their time on manual tasks such as keying invoice data, chasing invoice approvals, fixing errors, and responding to emails regarding payments.This inefficiency slows down the entire accounting process.

4. Delayed Payments and Missed Opportunities  

When overwhelmed with invoices, accounts payable teams may struggle to process payments on time. It may lead to missed early payment discounts and late payment penalties.

5. Strained Vendor Relationship 

Delayed payments and errors can damage relationships with suppliers. Also, it impacts the company’s reputation negatively in the eyes of lending institutions.

6. Risk of Fraud 

Manual accounts payable processing is more susceptible to fraud. There are high chances of approval of fraudulent invoices without proper controls, leading to financial losses.

7. Ineffective Reporting 

Manual processes are prone to human error and can result in ineffective reporting. This can lead to poor financial decision-making.

Companies can address such pain points effectively and get the most out of their automated accounts payable processes by leveraging accounts payable outsourcing services.

What is AP Automation?

Accounts payable (AP) automation is the use of software to automate the entire accounts payable process, from invoice receipt to payment. It reduces manual intervention, minimizes errors, and enhances overall efficiency.

Can You Automate Accounts Payable?

Yes, accounts payable can be fully automated. AP automation software handles tasks such as invoice data entry, approval workflows, and payment processing. This allows businesses to focus on more strategic activities.

Benefits of Accounts Payable Automation

AP automation reduces human errors by automating repetitive tasks. It flags duplicate or fraudulent invoices, ensuring accurate data entry and payment processing.

It takes weeks to confirm the invoice terms, get the invoice approval, and paid. Accounts payable automation streamlines processes, starting from data entry to purchase order (PO) matching, and coding to payments that reduce the turnaround time. 

Automating the majority of the accounts payable process enhances efficiency. E-invoicing can help companies to save half of the time compared to a manual process.

Accounts payable automation solutions help companies to validate the invoice data entered and expedite the accounting process with provided accuracy benefits, increasing overall efficiency. 

Increased efficiency with accounts payable automation allows companies to reallocate personnel to other crucial and higher-level activities. Employees may feel more fulfilled by focusing on strategic initiatives.

AP automation significantly lowers processing costs by reducing errors, eliminating manual data entry, and leveraging cloud-based solutions. Businesses can save up to 30% on processing costs by automating their accounts payable functions.

The accounts payable function is highly dependent on data analytics and reporting as it can provide insight into payment procedures. AP automation provides real-time access to invoice statuses and payment workflows. This visibility helps businesses monitor their accounts payable processes and make informed decisions. Effective reporting allows for better financial planning and cash flow management.

E-payments is one of the accounts payable automation solutions. AP automation enables businesses to switch to electronic payments, making transactions faster, more secure, and less prone to fraud. E-payments also reduce the costs associated with paper checks and manual processing. Also, e-payments reduce fraud and error occurrences.

1. Expert Accounts Payable Analysts

ARDEM, a leading account payable service provider, offers specialized accounts payable outsourcing services. Their trained analysts work seamlessly within various accounting systems, ensuring a smooth transition to automated processes. By outsourcing accounts payable to ARDEM, businesses can achieve greater efficiency without the need for retraining or hiring additional staff.

2. ARDEM Invoice Manager (AIM)

ARDEM’s proprietary software, the ARDEM Invoice Capture & Extraction (AIM), delivers a 99.7% success rate in extracting and processing invoice data. This AP automation solution helps businesses streamline their accounts payable processes, reduce errors, and save time.

3. Cloud-Based Solutions

ARDEM provides cloud-based accounts payable solutions, allowing businesses to access their data from anywhere. These solutions enhance security, reduce costs, and eliminate the need for paper-based invoices.

The cost of AP automation varies depending on the complexity of the system and the volume of invoices processed. However, the investment typically pays off by reducing processing costs, improving accuracy, and preventing costly errors. Businesses can achieve significant cost savings with AP automation, often recouping their investment within a short period.

Accounts payable automation is on the rise, and for good reason. It addresses the pain points of manual processing. It offer improved accuracy, efficiency, and cost savings.

To conclude, accounts payable automation is a worthwhile investment for businesses. This strategic move can lead to significant benefits for any growing business. By partnering with an experienced account payable service provider like ARDEM, businesses can take full advantage of AP automation. For more information reach out to ARDEM.