As businesses grow, managing finances becomes increasingly complex, especially the accounts payable function. Accounts payable management, from invoice processing to handling relationships with vendors, requires dedicated and a significant amount of time and resources. That’s where accounts payable Automation helps businesses.
In recent years, it has become essential for enterprises of all sizes. It can help businesses to overcome pain points with its numerous benefits. Accounts Payable Automation Market is projected to reach 7.24 Billion by 2030 at a CAGR of 11.2%. In this post, let’s understand why enterprises should look into it and how account payable service providers can help companies with automation solutions.
Pain Points for Companies in Accounts Payable
Let’s jump right into it.
1. Data Inaccuracy
Human error is one of the costliest problems associated with manual accounts payable systems. As manual data entry is one of the most repetitive and tedious tasks in the accounts payable department, it increases the chances of errors while invoices are processed manually.
2. High-processing Costs
Data shows that 35% of businesses report high processing costs with traditional payment methods. As per the data, processing a single vendor payment costs nearly $8 or more, especially when there are errors. Missing invoices also add to processing costs with late fees.
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. It indicates the inefficiency of the accounts payable workflow based on manual processing.
4. Delayed Payments and Missed Opportunities
When the accounts payable department gets overwhelmed with invoices, there can be delay in invoice processing and thus payment. It may lead to missed early payment discounts and late payment penalties.
5. Strained Vendor Relationship
Strained relationships with suppliers and vendors is a ripple effect on the company due to delayed payments and errors in invoice processing. Also, it impacts the company’s reputation negatively in the eyes of lending institutions.
6. Risk of Fraud
Manual accounts payable processing is more sensitive 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, leading 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.
Should Businesses Really Look at Automation?
1. Improved Accuracy
The primary goal of employing accounts payable automation in a company is to minimize human intervention to reduce errors. Automation enables businesses to process invoices with a reduced likelihood of errors. Accounts payable automation can flag duplicate and fraudulent payments instantly and relevant authorities can take action immediately. Highly accurate data in accounts payable is also necessary to eliminate accounting errors.
2. Reduced Turnaround Time and Improved Efficiency
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.
3. Recognizable Cost Savings
Besides being highly efficient, end-to-end accounts payable automation processing offers the benefit of low prices.
- E-invoicing can decrease the cost per invoice dramatically.
- Reduced errors with accounts payable automation means reduced costs of processing.
- Cloud-based solutions are a cost-effective solution, especially when the piles of invoices are increasing in size with the growth of the business. Companies can automate their accounts payable functions with an efficient account payable service provider.
4. Improved Visibility and Better Insights with Effective Reporting
The accounts payable function is highly dependent on data analytics and reporting as it can provide insight into payment procedures. Businesses can have real-time access to the status of the invoices. It helps them to make timely efforts to approve or pay invoices. With effective reporting, they can evaluate payment timeliness for better operational efficiency.
5. Electronic Payments
E-payments is one of the accounts payable automation solutions. Considering the benefits of e-payments over traditional payment systems, they help businesses to make invoice payments fast using cards, the internet, or mobile banking. Also, e-payments reduce fraud and error occurrences.
Accounts Payable Automation Solutions with ARDEM
- Accounts payable analysts working with ARDEM, the reputed name for accounting outsourcing services, are trained to work in multiple accounting systems. Companies across industries can experience a seamless transition of accounts payable processes, from receipt, and approvals, to payments with specialized accounts payable outsourcing services. Minimum human touches.
- ARDEM offers accounts payable automation solutions to help businesses with their proprietary software, the ARDEM Invoice Capture & Extraction (AIM). It can provide up to a 99.7% success rate in extracting and processing invoice data. By employing automation solutions with ARDEM, businesses can streamline their accounts payable processes, save time and achieve greater efficiency.
- Cloud-based solutions with the account payable service provider – ARDEM allow businesses to access their accounts payable data and procedures conveniently from any location. While enhancing the security, it reduces costs involved in managing paper-based invoices.
From high-processing costs to fraud risk, there are many accounts payable challenges for companies. Offering several benefits and resolving accounts payable issues, accounts payable Automation is on the rise. Most companies have already moved towards accounts payable outsourcing services to achieve improved accuracy and efficiency, cost control, enhanced visibility with reporting, and reduced cases of fraud and reduced errors. To conclude, accounts payable automation is a worthwhile investment for businesses.
ARDEM provides Business Process Outsourcing and Business Process Automation Services to established companies to help them improve operational Efficiency and Reduce Costs. For more information please reach out to us at email@example.com or call us at 908-359-2600.