Tools and Software for Accounts Payable (AP) Automation
If you look around most accounts payable departments you will see files, file folders, storage boxes and stacks of invoices in various stages of process. Some AP Departments might be more organized than others, but either way there are myriads of invoices at varying degrees of process and completion.
In today's world there are many challenges hindering the performance of the AP Staff and their ability to effectively process and pay invoices. Most of these challenges are out of the control of the AP Department all together. Since March of 2020, staffing issues have been plaguing business all across the United States, as well as affecting companies internationally.
There has also been a growing trend towards a remote workforce. This in itself creates a major bottleneck for AP Departments at many levels. First, if the AP Staff is working remotely, yet suppliers are sending invoices into the corporate office then this creates an instant challenge. If AP Staff are working remotely and the physical invoices are located elsewhere, what do they do? Let's consider the fact that buyers and invoice approvers, may in fact also be working remotely. This now compounds the problem because now the AP Department has got to track down the approver and somehow get invoices to them in a timely manner.
Assuming this back and forth goes as well as it can possibly go for invoice approvals, the AP Staff still have the time consuming challenges related to matching purchase order (PO) invoices against PO's and Goods Receipts, most companies call this the "3-way match".
One of the last steps to processing accounts payable invoices is entering the relevant invoice data into the ERP financial system to post the invoice for payment.
In today's world there are many challenges hindering the performance of the AP Staff and their ability to effectively process and pay invoices. Most of these challenges are out of the control of the AP Department all together. Since March of 2020, staffing issues have been plaguing business all across the United States, as well as affecting companies internationally.
There has also been a growing trend towards a remote workforce. This in itself creates a major bottleneck for AP Departments at many levels. First, if the AP Staff is working remotely, yet suppliers are sending invoices into the corporate office then this creates an instant challenge. If AP Staff are working remotely and the physical invoices are located elsewhere, what do they do? Let's consider the fact that buyers and invoice approvers, may in fact also be working remotely. This now compounds the problem because now the AP Department has got to track down the approver and somehow get invoices to them in a timely manner.
Assuming this back and forth goes as well as it can possibly go for invoice approvals, the AP Staff still have the time consuming challenges related to matching purchase order (PO) invoices against PO's and Goods Receipts, most companies call this the "3-way match".
One of the last steps to processing accounts payable invoices is entering the relevant invoice data into the ERP financial system to post the invoice for payment.
By using advanced AP Automation Software & Tools, companies are able to more effectively deal with the growing challenges caused by manual accounts payable processing, remote staffing, high cost of manual processes, and tedious error-prone accounts payable processing.
First let's get familiar with some terminology related to accounts payable automation tools and software.
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Accounts Payable Scanning & Invoice Conversion Capture
Nobody likes paper in accounts payable. Paper invoices are slow and tedious to process. By leveraging digital images, scanning accounts payable invoices can quickly become a time saving tool used in processing supplier/vendor invoices. Once invoices are scanned the digital images are easily shared between people and departments who need to access, review and approve invoices.
By scanning paper invoices into a workflow/AP Automation system AP Staff will have complete visibility and control over the accounts payable process.
By scanning paper invoices into a workflow/AP Automation system AP Staff will have complete visibility and control over the accounts payable process.
Accounts Payable OCR & Invoice Data Capture
OCR or Optical Character Recognition as you may know it , is software that has been around for a very long time, OCR in itself is software that converts digital images into textual based documents that become text-searchable. This may sound familiar as you probably remember this in the early days of text searchable PDF files. Now this is where is all began.
I-OCR or Intelligent Optical Character Recognition. Now where getting somewhere, bringing OCR into the 21st century is I-OCR. If you can think of it this way, OCR was the start, applying OCR to a document converted the entire document to searchable text. Now, lets take OCR and add some intelligence to it, I-OCR. By adding intelligence to the OCR software we can now help it to learn and think more like a human, like the way you and I are thinking right now. I-OCR software can look at the data and interpret the data and extract only the text necessary for processing supplier invoices.
RPA or Robotic Process Automation. RPA now takes the process to a new level. Uses a combination of I-OCR along with automated processes that systematically apply business rules to supplier invoices and treat them as an AP Specialist would. Now, error-prone, manual tasks that require human intervention can be completely automated further enhancing the capabilities of your accounts payable process.
I-OCR or Intelligent Optical Character Recognition. Now where getting somewhere, bringing OCR into the 21st century is I-OCR. If you can think of it this way, OCR was the start, applying OCR to a document converted the entire document to searchable text. Now, lets take OCR and add some intelligence to it, I-OCR. By adding intelligence to the OCR software we can now help it to learn and think more like a human, like the way you and I are thinking right now. I-OCR software can look at the data and interpret the data and extract only the text necessary for processing supplier invoices.
RPA or Robotic Process Automation. RPA now takes the process to a new level. Uses a combination of I-OCR along with automated processes that systematically apply business rules to supplier invoices and treat them as an AP Specialist would. Now, error-prone, manual tasks that require human intervention can be completely automated further enhancing the capabilities of your accounts payable process.
Accounts Payable Invoice Workflow
Accounts Payable Workflow is an important and complex tool that relies on business rules related to your financial processes to ensure that supplier invoices are being processed in a timely manner. The complexity of the workflow process will vary company by company and the best workflow system suited for accounts payable processing will have the ability to scale up or scale down based on the business rules and requirements of an organizations financial processes.
Invoice Approval Routing is a subset of the AP Workflow business rules and is a key component to the success of an Accounts Payable Automation project. The approval routing ensures that supplier invoices are systematically directed to the correct approver, the first time, without the need for an AP Specialist to intervene.
Invoice Approval Routing is a subset of the AP Workflow business rules and is a key component to the success of an Accounts Payable Automation project. The approval routing ensures that supplier invoices are systematically directed to the correct approver, the first time, without the need for an AP Specialist to intervene.
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Accounts Payable Automation & PO Matching
Automated Purchase Order Matching or Touchless Processing as this is often times referred to is most often the most complex part of the accounts payable process. Invoices arrive and AP Staff have to verify that the invoice matches the original purchase order (PO) as well as the Goods Receipt or Services have been received. There are common issues related to matching invoices which include pricing issues, receiving issues, as well as dealing with taxes, freights and variances.
When comparing Accounts Payable Automation software, systems, and solutions this is a key area to focus on as PO invoice matching is not handled the same way in all systems, i.e. some systems do not have the ability to apply tax rules or efficiently deal with variances.
When comparing Accounts Payable Automation software, systems, and solutions this is a key area to focus on as PO invoice matching is not handled the same way in all systems, i.e. some systems do not have the ability to apply tax rules or efficiently deal with variances.
Accounts Payable Automation Dashboards
Accounts Payable Dashboards for managing the entire accounts payable process is critical to the success of any AP Automation project. By providing AP Managers with real-time dashboards that provide instant reports, KPI's and analytics will allow them to manage the payables process from anywhere and make the best possible decisions to better manage a businesses cash flow.
Accounts Payable Automation ERP Integration
ERP Integration is a critical step towards the ultimate goal of eliminating manual invoice data entry. By leveraging the investment of an ERP system and connecting the accounts payable process with the ERP system, manual data can be made a thing of the past.
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Integrated Supplier Payments
Supplier Payment Integration. By integrating a supplier payment program companies can further enhance their Accounts Payable (AP) Automation initiative and increase the ROI of an automated AP system and eliminate the need for cutting paper checks or issuing manual payments to suppliers. In many cases, implementing a supplier payment program can actually generate rebates back to you in the form of a cash payment.