Paying invoices is part of every business and every business needs an effective accounts payable process to do this. Unfortunately however, many put up with an inefficient and unproductive accounts payable process. Why? Because it is not seen as a revenue generating task. For many business owners and managers, they would much rather focus on ways to increase revenue, reduce production costs, or cut operating expenses. They do not see the opportunities for their business in improving and automating their accounts payable processes. Many businesses will think, well we have a good financial accounting system isn’t that enough? Finance managers know that it’s not!
An automated accounts payable process is essential for several reasons:
- To provide visibility, transparency and accountability throughout your accounts payable process.
- To reduce data entry time and improve data accuracy.
- For improved security and auditing capabilities reducing the chances of fraud.
- To provide greater control over cash flow management – visibility and forecasting.
- For improved invoice approval processes.
- To reduce reliance on paper-based documents, which in turn reduces filing and archiving costs, and decreases the number of lost documents.
For many finance managers, investment in accounts payable automation all comes down to the demonstrated return. The good news is this return can easily be quantified and measured in terms of an organisations ability to:
- Reduce invoice processing costs.
- Improve cash flow management.
- Reduce the chance of fraud.
So where should finance managers start? There are a number of standalone or integrated accounts payable automation solutions available today. In many cases the greatest automation efficiency can be found in the initial invoice data capture and invoice processing workflows. Here are five ways businesses can automate their accounts payable process:
- Automated Data Capture & Import
One of the most manual tasks of an accounts payable process is entering the invoice into the financial accounting system. This is time consuming and prone to human error. Businesses can automate this task with business technology that will automatically capture an electronic copy of the creditor invoice (from scanners, email, import folders) and intelligently identify and extract the required data from the invoice (supplier, invoice #, invoice date, invoice amount, purchase order # etc.). An electronic image of the invoice and the data from the invoice can them be automatically imported into the financial accounting system. In turn saving a great deal of time in data entry and filing.
- Intelligent data verification and validation
For many businesses entering a new invoice can be complicated. For example, they might need to validate the invoice details against a purchase order, stock codes, or supplier details. In addition, they might have the task of validating invoices shared or checked amongst several employees. Again this can be a time-consuming manual task for many organisations.
Automated data verification and validation can be carried out through automated business technology. Once the data has been automatically identified and captured from the invoice it can look-up data in the financial accounting system to validate, verify and match this invoice data. If required simple tasks like creating a new supplier if one is not detected in the system can also be achieved. Once the data has been validated and verified the data and images are automatically uploaded into the financial accounting system, without manual data entry.
- Workflow and task management
Often there are certain tasks that key employees need to perform in processing a creditor invoice. These might include having a second staff member verifying the invoice has been entered correctly, filing the invoices each month, or confirming with the warehouse that the items have been received. Again for most businesses this is a manual or paper-based process.
However, businesses can also automate these work tasks and processing stages. In other words, the various stages an invoice needs to go through can be automated and employees will receive notifications when they have new tasks to perform based on a pre-defined set of tailored rules and conditions. This provides complete transparency and audit capabilities on all invoice processing tasks.
- Automated approval process
Generally, the single biggest headache in creditor invoice processing is invoice approvals. Businesses are always dealing with slow approval times and lost documents by employees. As a consequence these inefficiencies can be costly. Businesses looking to automate their accounts payable processing should be looking at how they can automate the invoice approval process.
Using the automated workflow and task management solution, businesses can establish automated rules and conditions that ensure digital invoices are sent to the right employee for approval and prompt them to review and approve invoices in a timely manner before automatically notifying accounts payable staff when invoices are approved and ready for payment.
- Digital archiving
As finance managers know copies of creditor invoices must be kept for up to seven years. However, paper-based creditor invoices have a tendency to get lost, can be damaged by fire or water, and take valuable office space for filing.
The benefit of an automated accounts payable process is creditor invoices are captured as digital copies and processed digitally throughout the entire process. Therefore, it makes sense to also file and archive these documents electronically. This ensures documents can still be found if misfiled through open text searches, there is a lower risk of documents getting lost or damaged, and electronic storage means less overflowing filing cabinets.
Finance managers know the value of an efficient and effective accounts payable process for their business. The argument for automating your accounts payable process is sound. And the returns available are tangible and measurable.
Colourworks Australia has been providing leading business technology services for over 30 years. Through our product Autofile™, we provide businesses of all sizes, in all industries with a complete business technology service in automating your ‘Purchase to Pay’ process. And as integration partners with MYOB, Reckon and Xero, Autofile™ you can be assured of a seamless improvement in your accounts payable productivity.
Contact Colourworks Australia today on 1300 351 594 to learn more about our Autofile™ ‘Purchase to Pay’ business technology service.