The evolution of Accounts Payable
Over the past 30 years, Accounts Payable has emerged from a back-office, paper-based process into value-add operation that is vital to the success of any organization. Digital transformation has enabled AP automation technology to reach new heights, bringing improved productivity, reduced manual processes and labor costs, faster cycle times, and fewer payment errors. AP automation can help to optimize cash and working capital by:
- Improving financial visibility
Today, AP automation technology can provide organizations with increased real-time visibility of liabilities, with associated tools and capabilities to optimize payment terms and secure settlement discounts to actively contribute to managing working capital and reducing cost of goods sold. Often this is all easily accessed through a single and easy to use cloud-based application and enables financial decision makers to breakdown spend and cash data to identify trends, evaluate cash flow, monitor budget performance and inform strategic business decisions. Further, visibility is provided into all corporate liabilities from purchase through to payment*.
- Centralizing Accounts Payable processing
An unorganized and decentralized AP function can lead to costly errors such as duplicate payments, in addition to lengthy payment processing. There are also costs involved in reconciling these issues. AP automation technology prevents these arduous errors, capturing information from both digital and paper invoices accurately. A centralized approach, such as a shared services environment, also enables all employees to adhere to standardized processes and metrics, wherever the data is being accessed from.
- Providing access to incentives
An early payment discount is a reduction in the amount on a supplier’s invoice if the customer pays the supplier quickly, as this brings benefits for the supplier such as accelerated cash flow and reduced risk of late payment or non-payment. Traditionally, manual or semi-manually operated AP departments take too long when processing invoices to take advantage of the early payment discounts that many suppliers offer. Invoice approval cycle times can be greatly reduced with AP automation technology, enabling access to such discounts.
Evolving your enterprise with AP automation
It’s clear that AP automation can help organisations to better manage cash and working capital, with the above naming only a few of the many benefits that this technology can bring. Although, AP automation is not a new concept, and many businesses face ongoing challenges such as supplier adoption and queries, invoice exceptions and more.
However, with a blended digital and multi-channel approach, organizations can successfully achieve high degrees of AP automation and fully realize the benefits of automated AP solutions. To find out more about how to evolve your enterprise with AP automation, download the latest Intelligent Insights report from excelerateds2p here: excelerateds2p.com/evolve-ap.