No growing business operates without facing challenges, whether that is within its operations or the wider economic environment. Any company that wants to succeed in the challenging modern business world needs to be proactive about combating challenges and finding solutions.
One area where many businesses could stand to improve is in the management of their financial processes, particularly with regards to their accounts payable (AP).
In the past, AP processes have relied on paper-based invoicing and manual handling, with are both time-consuming and error-prone. But, thanks to the revolution of AP automation, businesses no longer need to worry about the challenges of manual invoicing and AP data entry.
So, let us take a closer look at five of the business challenges that the implementation of AP automation has the potential to solve.
Inefficient invoice processing
Possibly the single biggest flaw in traditional AP processes lies in the inefficiency of manual handling, data entry and processing.
With older, paper-based systems invoices must be received, sorted, and entered into the system entirely by hand. Not only is this a very labor-intensive process, but it consumes a significant amount of time for the finance team.
Relying on the slower, more inefficient manual system creates the potential for delayed payments, as well as missing out on any early payment discounts. Lacking the speed and agility to handle invoices in a timelier manner is a serious detriment to modern businesses.
That’s where AP automation can help, with the software capable of streamlining the entire invoicing process. The automated system captures invoice data, digitizing them and processing their data without the need for manual input.
This drastically speeds up the processing time of any given invoice, as well as ensuring that all invoices are processed in a consistent and accurate manner.
Data entry errors
It is well known that manual data entry is inherently prone to errors, particularly when there are large volumes of data being handled.
No matter how well-trained a team member is, there is always a chance that they will make a typo or error when inputting information into the system. Any incorrect numbers have the potential to create major problems down the line if they aren’t promptly caught, such as overpayments, underpayments, or even duplicate payments.
As AP automation entirely eliminates the need for manual data entry within the invoicing process this naturally combats the risk of data entry errors. The automated system can also cross-reference invoice data with other documents in order to ensure the accuracy of the information, making it easier to identify any discrepancies swiftly.
Scalability issues
Every business aims to grow, and any growth naturally increases the volume of invoices that a finance team needs to handle. This has the potential to create some serious strain on a manual processing system, with additional staff and resources needed to keep up with any sustained increase in workload.
Scalability is something that’s baked into AP automation solutions, however. The system is able to scale up in line with your business, being able to process larger numbers of invoices just as quickly and efficiently. As a result, companies using AP automation do not need to worry about their capacity when expanding into new markets or taking on new business relationships.
Lack of clear financial oversight
Being able to see exactly how your business’s financials are flowing is essential. But in manual AP processes it can be difficult to maintain proper, constant oversight of the status of invoices and payments. That lack of visibility can make it harder for a business to properly manage its cash flow, with a far higher chance of surprises.
Visibility is another feature that AP automation excels at, with many systems offering built-in dashboards and reporting tools that make it far simpler to track, monitor and analyze invoicing data.
Maintaining solid business relationships
Keeping vendors and suppliers happy is something every business needs to strive for, as negative business relationships will only pull your company down. Issues like delayed payments, errors, and limited communication all have the potential to strain relationships or create potential disputes.
By constantly delivering timely and accurate payments, AP automation is a tool that can help to smooth your business-to-business relationships. The increased speed of invoice processing using AP automation not only makes things smoother, it helps a company look more professional in general.
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By now it should be clear just how much potential AP automation has when it comes to solving common business challenges. From improved accuracy to stronger business relationships, the case for implementing automation support into your AP process is undeniable.
