Discover how accounts payable automation reduces costs, improves accuracy, and streamlines business financial processes effectively.
The following is a guest post from my bloggy friend Taylor McKnight. Interested in having a guest post on my website? Click here for my guest post submission form.
AP Automation Benefits: Save Money and Boost Efficiency Today
An AP Automation is a system where accounts payable are processed digitally. The manual methods are fading away, and this new technology is rapidly growing, especially in the entrepreneurship sector. With this paperless framework, the manual documents are converted to electronic form to invoices and receipts to ease cash transactions.
Using this digital technology will seal the loopholes in which you are likely to lose money. It protects you from penalties, delays, errors in overpayments that can lead to huge losses and automatic invoice approvals to hasten delivery from your suppliers. Therefore, this is the ideal system that you require to maximize profits by minimizing overhead expenses.
How to Save Money Using the AP Automation
Human errors are prevalent while making payments. They can be so costly to any enterprise or institution in business. In the mind of anyone handling money in profit-making or a non-profit organization, improving efficiency and increasing savings are key objectives. As such, the digitalization of the system with AP automation can enhance effectiveness.
Improves Data Accuracy
A minor error in a transaction can ground your business. The AP Automation protects you from this possibility by ensuring the data captured is safe and accurate. With this digitalization, there are no overpayments or charges incurred out of underpayment. It’s a sure way of executing actual payments according to your customization.
Minimizing Labor Expenses
A manual system requires that you hire employees to handle every step of the payment system. Hence, you will require employees in every sector from sorting, filing, checking and counter checking processes for accuracy. This is time-consuming and costly. However, the personnel are reduced with an automated payment system as the technology executes your command with precision. The manual laborers are freed up, saving you operational costs.
Penalty Fees
Digitalization is very effective when it comes to keeping track of deadlines. It has appropriate reminders that keep you alert not to miss on crediting your suppliers or filing tax returns. In addition, it has a way of prioritizing the invoices based on urgency. Prompt payment earns you trust from clients and fellow business associates.
It Saves Money through Discounts
Your company is likely to benefit from discounts arising from your regular transactions. A seamless cash flow will make it possible for prompt crediting of the payable accounts before deadlines are due. A deep analysis and summation of the discounts obtained can help you save so much money.
Simplification of the Audit Process
It’s quite cumbersome to go through tens of files and look for relevant information for proper auditing. The automated payment system makes it easy to retrieve the required data. Moreover, the electronic system takes less space in data storage, saving you the cost of purchasing hundreds of files. As a result, this technology not only speeds the auditing process but also cuts costs that are associated with a manual system.
Reduces Cost per Invoice
The cost of an invoice is probably taking much of your company budget. It’s estimated that institutions that are yet to embrace digitalization of their processes incur huge charges to the tune of $8.78 per invoice. On the contrary, businesses adopting the AP Automation incur $1.77 for a similar invoice. Undoubtedly, technology will save your enterprise a lot of money and maximize your income.
Bridging The Gap Between Physical and Digital Financial Options With AP Automation
While some believe Accounts Payable Automation is solely something that occurs online, this is not at all correct. As you can save money by utilizing AP automation you can also connect it to the financial ways of the past, including tangible printable checks. In order to be compatible you will need to invest in a hybrid AP automation platform. Then with the right application you can digitize the invoice intake process that could be ever so complicated. Obviously, the user of the AP automation and check deposit can choose their desired payment preference. After choosing whichever route you would like to pursue then integrate them into the check printing services that you maneuver as well. Whether the checks be digital or physical they should be automatic when it comes to these steps. By the end of this and if done so correctly, the check and AP automation will be cooperating efficiently with one another.
The Things to Avoid When Using AP Automation
There is an excitement that comes with the installation of new mechanisms in business running. The ease of operation that this process brings can make you forget that there are other crucial parts of the company that should be involved. As such, there are a few things to avoid:
Sidelining the Management in Transition
The management is usually involved in day to day running of the business. They are a critical cog in the success of any initiative within the company. Hence, it’s important to involve enterprise owners in the decision making for an uninterrupted transition to the new system. Additionally, the opinions of the subordinates should also count during the installation of the new technology.
Do NOT Align the Automation Roadmap to Future Needs
Aligning all the future needs and operations of the business can be costly. As such, it is fundamental that you seek feedback from those who have already used the AP Automation technologies.
The information gathered will help you in developing future insights for your business. This action is necessary as automation isn’t the end of innovation, and future innovation may prove to be more effective.
Avoid Laying Off Multiple Employees
You are likely to be overexcited that automation will lay off many people to increase your savings. Certainly, shock will get you if you only trust the system with a few people. For instance, what if they resign or get sick? As such, train several people to be on standby for any unforeseen circumstances.
Other Benefits of AP Automation – Fraud Protection
The AP Automation software protects your business from fraud by assigning a particular person to approve the invoice and to release payment. The specific individuals are the custodians of the system codes, and therefore your business is secure from any fraudulent activities.
Written by Taylor McKnight, Author for Laser Printer Checks
