It’s time to talk about optimizing one of the least-sexy business processes out there: invoice approval.
When invoices are processed effectively, it directly yields a positive impact on turnaround time, operational efficiency, and your overall bottom line.
Traditionally, invoices are processed and approved manually, but it’s important to understand that there’s a better way to do this in the 21st century and it’s automation.
Appropriate automation of your accounts payable workflows saves you time and effort that can be channeled into more important areas of running your business.
If you depend upon an accounts payable (AP) professional to manage invoices by hand — filing documents, capturing data, matching numbers, making records in ledgers, and following up to ensure payment — then your method is tedious and outdated. And such a method often leads to human error, and you won’t necessarily have all the oversight you might want in order to keep an eye on the process.
We live in the age of the smartphone, yet many businesses still cling to these practices of yesteryear. We live in a time when technology has made work and communication ridiculously easier, and your accounts payable workflow ought to reflect that. This means you should strive to automate it.
Don’t cleave to the 1820s ways of working. Here are 15 reasons why accounts payable workflow automation is a no-brainer in the 21st century.
1. It increases productivity and efficiency
An automated invoice processing system allows accounts payable staff to get more done in less time. It’s the classic “work smarter, not harder” paradigm made real and relevant.
Repetitive, wasteful tasks are gone; they have been automated, or even better, put to death!
It’s automation time. This means your team can focus on more important tasks and get other valuable work done.
2. It means fewer mistakes
Humans make mistakes; it’s one of the primary problems associated with AP teams.
But with built-in error-checking functionality, a reliable accounts payable workflow automation software can significantly reduce (or completely eliminate) such errors.
Software doesn’t get tired, grumpy, or lose sight of the goal.
3. It’s environmentally friendly
Invoices can arrive at your office in a variety of different ways — email, fax, or even postal mail. But all of these invoices are printed on paper.
Though you might not be able to control how your invoices arrive, you surely have a say in how much extra paper you generate to deal with them.
Manual invoice processing is paper-intensive. An automated solution, taking place entirely within a piece of software, requires no extra paper.
4. It reduces costs
Sure, paper costs some money, but there are also significant costs associated with everything else: you need ink, file folders, filing cabinets, staplers, binders, hole-punchers, paper clips, and all the outdated office supplies that paper requires.
An automated solution needs none of these materials in order to work effectively. It is its own top-to-bottom solution, generating significant savings that add up over time.
5. You have increased visibility, control, and accountability
Unlike manual processing, an automated accounts payable workflow gives you the ability to instantly know how close a given process is to completion, who is doing what at that specific moment, how they are doing it, how long they’ve been doing it, and when they’re expected to complete their task.
You maintain total control of the workflow, monitoring progress from start to finish and ensuring that everyone completes their tasks on time. And if a task slips through the cracks, the responsible person can be automatically notified that they have a responsibility to tend to. How cool is that?
6. Instant access, anytime, anyplace
Gone are the days of sifting through piles of paperwork to find exactly the document you need.
An automated invoice processing solution makes it a snap to dredge up exactly the invoice you’re looking for, even if it’s very old.
All your invoice information is at your fingertips, including vendor data, payment details, workflow status, line item information, the audit trail, and tax data.
Want to look at these details on your smartphone? No problem — this is basic stuff for an automated system to take care of. Your accountant will thank you.
7. Nothing will ever be lost again
An automated system stores its data in the cloud.
This means everything is safe, securely backed up, and your files are completely protected in case of disasters like fire or theft.
8. It integrates seamlessly with other services
You likely use a variety of platforms to facilitate your regular business operations, like your regular email program, a cloud storage service, or a CRM solution like Salesforce.
With intelligent integrations to services like these, an automated accounts payable workflow can accomplish more without requiring you to switch back and forth from one solution to another.
9. Accurate financial reports
A hypothetical question for those of you still processing invoices manually: If you were asked to provide a financial report for a particular transaction, could you do so with a few clicks of the mouse?
Since an automated system maintains all the requisite financial data, it’s rather effortless to systematically generate whichever kind of report you might need.
You have easy access to data like transaction dates, lead time, purchases, amounts paid, discounts, and whatever other stats you might require.
10. It reduces the workforce
Most workflow automation software comes with optical character recognition (OCR) capabilities, a feature that electronically converts typed or handwritten text into something that a computer can understand.
This eliminates the need for manual keying — and nearly any other repetitive task — meaning you can maintain a slimmer, more efficient workforce.
11. It helps you avoid late payment fees
When you reduce the cycle time of your invoices, you easily avoid the late payment fees you may be vulnerable to.
Automated systems do this on their own, but manual systems, prone to human clerical error, may not be totally reliable in this department.
12. You’re easily eligible for early payment discounts
Avoiding late payment penalties is great, but what about scoring a discount for settling invoices ahead of time?
If your vendors offer this, then you’ll qualify for it far more often, and you’ll do so without having to manually strategize for it.
If you don’t already have such an arrangement with your vendor, then you can confidently negotiate these terms knowing that you have a powerful asset on your side.
13. It prevents fraud
Good AP automation technology checks all incoming invoice data against your existing records to stop fraudulent or erroneous entries coming from suppliers.
Overpayments and duplicate payments become a thing of the past with no extra effort required.
14. It makes it easier to forecast your cashflow
When you can easily generate any report you need, ensure timely invoice payment, stop paying late fees and fraudulent charges, and get early payment discounts, you have a much clearer picture of the financial health of your business.
You might consider automated AP software to be like the windshield wipers of your car — it makes it easy to see where you’re going.
15. It improves your bottom line
When all the benefits of an automated AP software solution come together in concert, improvements in your bottom line are inevitable.
The combined benefits are simply too significant.
It’s up to you to decide how you want things to go.
Do you want your work to be exciting and your workflow processes to feel effortless? Or do you want to feel bogged down by paper and outdated business practices?
Automation saves time and frees up human brainpower.
Shouldn’t that be a goal that every business aims for? With professional tedium well-handled by software, you and your employees are suddenly free to do more meaningful, valuable work that carries your venture forward.
With that tedium handled by slow, error-prone humans, mistakes of time and money are simply bound to happen.
So consider the type of business you want to be a part of.
Workflow automation can touch and improve nearly every sphere of your work. There are too many advantages to ignore.
Why not start with Pyrus? It’s the #1 accounts payable workflow automation tool, built with people like you and your team in mind. It’s free to try.