Every company needs a reliable method for controlling its cash flow. Your company’s finances may be prone to errors if handled manually. Your liquidity may suffer if the accounting system is uncontrollable. As a result, you might not have enough money for ongoing expenses or working capital for upcoming investments.
Businesses should think about implementing an effective accounts payable (AP) automation solution to reduce these risks. You can implement effective financial controls and report with the aid of automation.
This blog post explains the concept of accounts payable and how the procedure can be automated.
What is Accounts Payable?
The current liabilities or expenses of any business are referred to as accounts payable. These are the sums that your company owes.
How to make accounts payable automated?
Any step of the procedure can be automated, including accounts payable. The main goal is to give access to the necessary stakeholders and lessen the amount of paperwork involved.
Here are 5 techniques for streamlining accounts payable procedures
In the following lines, we are going to cover these aspects in their entirety and learn more about them.
1. E-billing
Receipt and recording of supplier invoices are the first steps in the AP payment process.
Use electronic invoicing as a replacement for compiling and submitting paper invoices to lessen the amount of manual labor required. In this instance, workers merely download a receipt scanner app to their smartphones.
2. Simplify the authorization procedure
Bills may cause delays and bottlenecks in the approval workflows. You have no idea where or why the invoice is stuck in an approval queue if there is no business visibility.
By automating the approval process, you and your staff can access an online dashboard to view the status of the invoice.
3. Do away with manual data entry
AP data is useful for locating wasteful spending and profitable opportunities. It also offers information about the effectiveness of various departments.
An accounts payable automation program’s OCR technology enables effective document digitization.
4. Establish compliance rules
The finance division and the company as a whole need business expense policies. A lack of oversight, however, increases the risk of non-compliance with written business policies and with monetary and legal regulations.
Automation software for accounts payable is used to verify IRS tax compliance and industry regulatory compliance.
5. Automate classification and coding
General ledger coding, which involves categorizing all business expenses, is crucial to AP. It is regrettably one of the most difficult AP department tasks and is rife with human error.
Larger companies are more likely to make errors that go unnoticed until it’s time for an audit because there are so many GL codes. Automated coding and classification utilize AP to categorize and code invoices according to values like:
- Amount
- Vendor
- Department
- Country
- Invoice category
- Product line
- Accounts unit