The average accounts payable workflow is embroiled by a repetitive and time-consuming process. With an automated solution, it allows businesses to better utilize and allocate their resources to maximize business efficiency. Lack of visibility increases the risk of errors and lost invoices which further increases the cost to process an invoice. Accounts payable departments are pressured with the need for real-time data, shorter cycle times, and lower operational costs. So, what are the best practices to automate your accounts payable process?
First, let’s dive into some of the common challenges that businesses are facing today.
Optimizing Your Accounts Payable Process for Efficiency
In our Accounts Payable White Paper, we tackle the challenges of in-house accounts payable processing. About 50% of businesses still receive invoices in a paper format which require manual effort to enter and process an invoice. The most common pitfalls of manually processing invoices are high processing costs, longer cycle times, and the high risk of human error or duplicate payments. Invoices need to be organized, extracted, validated, and approved before payments can be initiated. A little over one-third of organizations run the risk of submitting late invoices which produce late penalties and increase the average cost to process each invoice. To maintain visibility, businesses should measure their accounts payable turnover ratio to also improve business performance.
Top 4 Best Practices to Automate Your Accounts Payable Process
In addition to some challenges, here are the top 4 best practices to automate your accounts payable process.
1. Digital Transformation of Paper Invoices
50% of invoices are still being received by paper, which means businesses are still required to put in manual effort to enter and process an invoice. Digitizing paper invoices and utilizing data capture technologies to automatically extract and enter the data saves a significant amount of time and effort.
2. Automated Invoice Matching
Invoices need to be accurate to ensure that the received goods and services align with the purchase order. Automating 3-way matching and 4-way matching is simplified and run through multiple validation procedures to ensure the data is accurate before payment.
3. Streamlined Approval Process
Approvals can be streamlined to automatically send notification emails to approvers to shorten the cycle time to approve and initiate payment of invoices. This eliminates the risk of having an invoice sit on an approver’s desk and increases the visibility to keep track of which invoices have been approved.
4. Cloud-Based Invoice Manager
Invoices can be centralized onto a cloud-based portal which allows for a streamlined platform to upload, extract, approve, and process invoices. The data from these invoices can be downloaded into a normalized data file and easily ingested into your current systems.
How Does ARDEM Provide a Successful Automated Accounts Payable Process?
Finding the right outsourcing partner can provide all of the best practices to automate your accounts payable to cut costs, improve efficiency, and overall support healthy business growth for years to come
Automating the accounts payable process adds additional flexibility and scalability to ensure invoices are processed accurately, efficiently, and on time. The ARDEM Invoice Manager streamlines the collection of invoice data, three-way validation, and the approval process for efficiency. Invoices are stored in one portal to electronically review and approve invoices.
Data capture reduces the amount of time required to extract data at a fraction of the time it takes to manually enter invoices. Using a combination of programmed validations and effort-based extraction methods to ensure accuracy. In addition to these services, dashboards can be customized to provide reports and an overall view of all invoices. Less time is spent organizing the data and with a smoother workflow more efficient workflow.
Contact ARDEM today to learn more about an Accounts Payable Solution to help increase your efficiency and ROI.
