In today’s fast-paced business environment, efficient accounts payable (AP) processes are crucial for maintaining a healthy cash flow and strong vendor relationships. Cloud based accounts payable automation offers a game-changing solution for organizations seeking to optimize their invoice processing, approvals, and payment cycles. This cutting-edge technology eliminates the bottlenecks and inefficiencies associated with manual processes, empowering accounts payable teams to operate at peak performance.
What is Accounts Payable Automation?
Before delving too far into the advantages of a cloud based accounts payable automation solution, it is important to first understand what is accounts payable automation, and what does accounts payable software do, for that matter. Accounts payable automation is designed to handle every part of the accounts payable workflow with automation and free the accounts payable team from the repetitive manual tasks that prevent them from using their abilities on more critical tasks. An automated system can approve invoices, enter data, manage documents, and more, all with greater efficiency and accuracy than would be possible using a manual system.
The Burden of Manual AP Processes
Traditionally, accounts payable departments have relied on manual processes to manage invoices and payments. This approach often involves time-consuming data entry, physical document routing, and cumbersome approval workflows. Manual tasks not only drain valuable resources but also increase the risk of errors, delays, and miscommunications.
Cloud Based Vs. On-Premises for Accounts Payable
When it comes to accounts payable automation, organizations have the choice between cloud-based and on-premises solutions. While both approaches aim to streamline invoice processing and payment cycles, the deployment models differ significantly.
On-premises accounts payable automation solutions require businesses to host and maintain the software and associated infrastructure within their own data centers or servers. This approach provides organizations with complete control over the system and data, but it also comes with greater upfront costs, ongoing maintenance responsibilities, and the need for dedicated IT resources. Additionally, on-premises solutions may face challenges in terms of scalability and remote accessibility, potentially hindering collaboration and mobility for distributed teams.
In contrast, cloud-based accounts payable automation solutions are hosted and managed by the software provider, eliminating the need for organizations to invest in and maintain physical infrastructure. These solutions are accessed through the internet, offering greater flexibility, scalability, and accessibility. Cloud-based AP automation enables seamless remote access, facilitating collaboration among team members regardless of their physical locations. Furthermore, cloud providers typically handle software updates, security patches, and data backups, reducing the burden on internal IT resources. However, organizations must consider factors such as data privacy, compliance requirements, and potential integration challenges with existing on-premises systems when evaluating cloud-based solutions.
The Transformative Power of Cloud Based AP Automation Solutions
Cloud based accounts payable automation solutions revolutionize the way organizations handle their AP processes. By leveraging advanced technologies such as optical character recognition (OCR), machine learning, and intelligent workflow automation, these systems streamline every step of the invoice lifecycle, from receipt to payment.
Accounts payable automation software can improve an accounts payable team’s productivity by automatically managing their invoicing process. The workflow can be automated from end to end, from the moment the invoice is received to the moment the payment is delivered to the supplier. The best accounts payable automation software can accomplish this without disrupting a business’s existing accounts payable workflows and supplier relationships.
Another feature that can be found in the accounts payable software market is cloud capability. Cloud-based accounts payable software can help accounts payable teams stay organized and in control by making all payment data and the status of every invoice available remotely. Anyone on the accounts payable team can view accounts payable information from any device with an internet connection, no matter where they are.
Automated Data Capture and Entry
One of the primary bottlenecks in manual AP processes is the tedious task of data entry. Cloud based AP automation solutions eliminate this burden by automatically capturing and extracting data from incoming invoices, whether they are in physical or digital form. This intelligent data capture not only saves time but also minimizes the risk of errors associated with manual data entry.
Seamless Invoice Routing and Approval Process
Once invoices are digitized and data is extracted, cloud based AP automation solutions route them through predefined approval workflows. Approvers receive notifications and can review invoices from anywhere, on any device, facilitating a faster and more efficient approval process. This streamlined approach minimizes delays and ensures that invoices are processed promptly, fostering stronger relationships with vendors.
Integration with Accounting Systems and ERP Systems
Cloud based AP automation solutions seamlessly integrate with popular accounting systems and Enterprise Resource Planning (ERP) systems. This integration ensures that approved invoices are automatically synced with the relevant systems, eliminating the need for manual data entry and reducing the risk of errors. AP teams can work within a unified platform, enhancing visibility, control, and collaboration across the organization.
Benefits of AP Automation for the AP Department
By embracing cloud based accounts payable automation, AP departments can realize numerous benefits that translate into increased efficiency, cost savings, and improved vendor relationships.
- Reduced Processing Costs– Automating manual tasks and eliminating paper-based processes can significantly reduce the costs associated with invoice processing. AP teams can reallocate resources previously dedicated to mundane tasks, optimizing their workforce and maximizing productivity.
- Improved Accuracy and Compliance– AP automation solutions leverage advanced technologies to ensure accuracy in data capture, invoice coding, and payment processing. This enhanced accuracy minimizes errors and facilitates compliance with industry regulations and internal policies.
- Enhanced Visibility and Control– Cloud based AP automation solutions provide real-time visibility into the entire accounts payable process. AP teams can track invoices, monitor approval statuses, and access comprehensive reporting and analytics, enabling better decision-making and proactive issue resolution.
- Stronger Vendor Relationships– By streamlining invoice processing and ensuring timely payments, organizations can foster stronger relationships with their vendors. Prompt payments and clear communication channels contribute to a positive vendor experience, facilitating long-term collaboration and mutual success.
Case Study: Cloud Based AP Automation eliminates the paper chase
Sorrells & Co., a family-owned construction company in Waco, Texas, faced challenges with managing a multitude of invoices from contractors, subcontractors, and suppliers. Becky Sorrells, the company’s CFO, sought a solution to streamline the invoicing process and eliminate the need for manual distribution of paychecks every other Friday. Intrigued by the concept of a paperless office, Sorrells researched automated accounts payable (AP) solutions that could seamlessly integrate with Sage 100 Contractor, the cloud-based construction management software crucial for the company’s operations.
In 2019, Sorrells implemented TimberScan Titanium, an AvidXchange invoice automation solution tailored for the construction industry. This system streamlined invoice processing, eliminated data entry and approval hassles, and allowed Sorrells to manage invoices and cut checks directly within Sage 100 Contractor. In 2021, Sorrells further enhanced their AP process by implementing AvidPay, AvidXchange’s full-service payment automation solution offering electronic payments. This integration with TimberScan provided a comprehensive purchase-to-pay solution, facilitating faster payments and reducing ACH costs.
The transition to automated AP not only streamlined Sorrells & Co.’s invoicing process but also facilitated the transition of contractors to electronic payments through AvidPay, further reducing costs and increasing efficiency. Sorrells experienced multiple benefits from the automation, including stress-free invoice processing, improved visibility, faster payments, and reduced hiring needs. Cloud-based automation and electronic payments saved the company significant costs, including paper and mailing expenses, and eliminated the need for in-office AP management, allowing Sorrells to delegate these tasks to a remote employee and focus on strategic initiatives for business growth.
Trends Shaping Cloud Based AP Automation
The adoption of cloud based accounts payable automation is being driven by several key trends in the business landscape:
- Digital Transformation– As organizations embrace digital transformation initiatives, the need for efficient, cloud-based solutions has become paramount. Cloud based AP automation aligns perfectly with this trend, enabling organizations to modernize their AP processes while leveraging the scalability, security, and accessibility of the cloud.
- Remote Workforce and Mobility– The rise of remote work and the increasing demand for mobility have accelerated the adoption of cloud based AP automation solutions. These solutions enable AP teams to access invoices, initiate approvals, and monitor processes from anywhere, facilitating seamless collaboration and continuity.
- Artificial Intelligence and Machine Learning– The integration of artificial intelligence (AI) and machine learning technologies into AP automation solutions is revolutionizing invoice processing. These advanced capabilities enable intelligent data capture, automatic coding, and predictive analytics, further streamlining the AP process and enhancing decision-making.
- Business Resilience and Continuity– Cloud based AP automation solutions contribute to business resilience and continuity by minimizing disruptions and ensuring uninterrupted operations. With invoices and processes digitized and accessible from the cloud, organizations can maintain their AP functions even in the face of unexpected events or disruptions.
Choosing the Right AP Automation Solution for Your Business
When selecting a cloud based accounts payable automation solution, it’s essential to consider factors such as scalability, integration capabilities, user-friendliness, and vendor support. Conduct thorough research, evaluate your organization’s specific needs, and prioritize solutions that align with your long-term business objectives.
Embrace the Future of AP with Cloud Based Automation
In the ever-evolving business landscape, embracing cloud based accounts payable automation is no longer an option but a necessity for organizations seeking to remain competitive and efficient. By streamlining invoice processing, enhancing accuracy, and fostering stronger vendor relationships, AP automation solutions empower organizations to optimize their financial operations and unlock new opportunities for growth and success.
