Watching your business grow is one of the most satisfying things you can ever experience. Nothing beats witnessing all your best-laid plans coming to fruition as the company cements its position in the market.
But, growth is not without its challenges. As the business expands, so too does the paperwork. Soon, you must deal with a mountain of invoices, receipts, and client payments. The only way to keep up-to-date would be to hire an army of accountants.
You will likely need to assemble an accounts payable department to keep your cash flow in check. The accounts payable (AP) department will be in charge of cash outflow to creditors.
The AP department is crucial to any business but can be challenging to manage. They often have to handle the manual processing of accounts payable, which involves a ton of paperwork.
However, manual AP is inefficient due to the inevitable backlog, human error, and complexity of approval. Manual AP processes also limit staff to bill payments and tracking overdue invoices rather than focusing on high-value tasks.
And in a world with an industry shortage of about 136,400 yearly, hiring enough competent accountants and auditors may not always be possible.
Thankfully, there’s a solution—accounts payable automation software. Although most accounting software has automation capabilities, they are often rudimentary solutions. These only automate a few tasks and certainly don’t do enough to handle the large volumes of accounting paperwork large companies handle frequently.
Automating accounts payable is more than simply a convenience when protecting a business’s integrity. It changes the role of accounts payable from a drain on company resources to one that enhances cash flow, reduces paperwork, and provides vital financial data for strategic decision-making.
There’s a growing need for it, which explains why experts expect the market segment to have a CAGR of 10.8%, growing to $5.8 billion by 2029. However, choosing the best accounts payable software is not a simple process.
Here’s a look at what accounts payable automation is, its benefits, key features, and how to choose one.
What is Accounts Payable Process Automation?
If you run a medium or big business, then you understand how managing accounting books is hectic. Handling tasks like procurement and vendor invoices involves a load of bookkeeping, which invariably leads to manual data entry.
All this leads to inaccurate and incomplete data, as it is an overwhelming process. That’s why an accounts payable software solution is all the more critical.
Accounts payable automation uses technology to automate and streamline the accounts payable process, eliminating the need for repetitive and error-prone manual tasks.
With capable AP automation software, you can automate tasks and provide touchless data entry, invoice approval, and check writing while improving access to, and management of, critical financial data.
Big and small businesses can use accounts payable automation tools providing a centralized digital hub for scrutinizing bills, tracking approvals, and handling payments. AP automation also helps companies reduce or eliminate the need for manual intervention in processes like approvals, which can drag on unnecessarily if not monitored closely.
Why accounts payable automation software is important for business
Manual processes usually make status information on invoices and payments challenging for businesses. Manually processing invoices, entering data, and reconciling them consume much time and energy, slowing down your accounts payable process.
And that’s not even mentioning entering stock-keeping units (SKUs), verifying them, and coding them in the CoA. All these minimize your AP team’s productivity and may cause late payments.
Accounts payable automation eliminates manual processes, which can cause errors and slow down payment processing. It also allows your staff to focus instead on high-value activities that contribute to the growth of the business. Here’s what you can gain from AP workflows:
- Faster processing time
- Invoice automation
- Capture and provide alerts for vital information like pricing and early payment discounts.
When you streamline and simplify business processes, you boost productivity and gain valuable insight into spending and cash flow management.
Enhanced financial accuracy
Manual processes are prone to human error, which can be costly when processing invoices. These errors can come from foreign sources and other departments within your organization.
However, automation allows for the timely detection of such errors. You can also filter and automatically move between platform items, such as invoice labels, transaction information, and line-item data. Most AP automation tools use optical character recognition (OCR) to read invoices and translate their characters without any human intervention, reducing errors.
You can eliminate duplicate payments by automating financial transactions. AP automation also has security features to protect your business from data loss, phony data entry, fraud, and manipulation.
Streamlines approval processes
Manual methods might cause delays in the approval process and even introduce costly inaccuracies. Manual processes frequently force your AP finance team into spending long hours processing invoices, collecting and filing documentation to check invoice accuracy, acquiring proper approval, writing checks, and following up on payments.
However, accounts payable invoicing automation helps streamline the approval process from beginning to end. That involves processing invoices until complete payment, eliminating paper invoices and time spent keying in data manually.
Streamlining your approvals increases your company’s output and satisfies your creditors. You can set up AP automation to provide timely data to managers or supervisors as and when needed, and they can approve payments with a single finger tap.
Accounts payable automation software enables as many users as needed to work concurrently on a single automated system dashboard. For instance, all parties involved in a given invoice can access it simultaneously from any location, allowing for easy confirmation of charges, clarification of questions, and explanation of discrepancies.
Most reputable accounting software providers, such as Tipalti, Oracle Netsuite, and Sage Intacct, are cloud-based, so team members can access or route data to the general ledger dashboard wherever they are.
Disputes and frustrations will be minimal when things are running smoothly. Time saved from avoiding manual data entry gives your AP team more flexibility to work with other relevant departments to discuss and resolve discrepancies.
Streamlined compliance and audits
Manual processes may cause added pressure on your payable teams during the audit period because of the time and effort required to gather all the documents and prepare for the audit manually.
Automated AP systems provide a complete audit trail of all correspondence and approvals related to a given invoice, purchase order (PO), or receipt.
These documents can help your teams prepare for quarterly and annual filings. The records also provide a complete and error-free audit trail, ensuring no chance of misfiled paperwork, fraudulent billing in the shuffle, or lost paper approvals.
Improved vendor satisfaction
One common source of supplier dissatisfaction is late payments due to misplaced or forgotten invoices. Therefore, it is crucial that businesses make supplier payments on time and maintain open lines of communication.
Manual accounts payable processes are prone to delays, inaccuracies, and other problems that erode customer satisfaction. An automated AP system may streamline the process, allowing for more efficient operations, lowered processing costs, and better vendor relationships.
AP automation can enhance existing vendor relationships by ensuring suppliers receive timely payments. Automated invoicing and communication eliminate the need for human intervention in the payment processes.
Reduced invoicing costs
Your company can save money and improve its bottom line by automating the billing process. Automating your accounts payable means you may reduce your AP team while still getting the job done efficiently and effectively.
Additionally, automated invoice management makes it easier to spot errors and duplicate payments when you process invoices automatically, which cuts down on costs and inefficiency. That offers an excellent avenue for cost savings, as you save on labor, postage, office supplies, and other charges associated with manual invoicing.
Features of accounts payable automation software?
Automated billing/invoice processing
AP automation software should automatically and accurately extract data from invoices, populate them in your accounting system, and match them to any open PO and delivery receipts.
The automation tool should have document scanning, capture, and extraction functionality to automatically convert paper files into digital ones. It is a feature typically integrated with a scanner and uses optical character recognition to convert scanned documents into data you can send to your ERP system.
Automated approval workflow
One of the most tedious parts of handling accounts payable is getting the necessary payment approvals. It is possible to speed up the approval process with the help of automated solutions, which can automatically forward them to authorized personnel for approval.
Accounts payable automation software should provide adaptable and customizable workflows to meet the specific needs of your business. This may involve matching invoices and purchase orders, generating exception reports, and finding missing paperwork based on predetermined thresholds such as invoice amount, expense type, or vendor name.
The automation software should also allow you to prioritize invoices and select them for payment based on several factors using approval workflows. In addition, you can turn off the automatic handling of any invoice beyond a specific threshold, in which case manual approvals will be necessary.
Payment processing automation and reminders
AP automation can streamline payment processing if the system has established data entry and approval processes. Thanks to software that can automatically generate validation files and set payment dates, you can rest assured that it will handle all your bill payments on time.
A robust system will also provide different payment forms, including ACH, checks, wire transfers, and payments in any currency.
Real-time reporting and analytics
Having real-time reporting and analytics capabilities integrated into your entire AP process is crucial. Detailed expense reports allow you to plan for future expenditures and audit the existing ones. It usually requires time, effort, and human resources to generate expense management reports manually.
You can now do the same in real-time with a few clicks of a button using accounts payable software. Real-time reporting will allow you to reimburse employees for expenses as they occur instantly. It also makes it simple to manage finances, grant access to people who need it, and do away with other time-consuming administrative tasks.
Accounting system/ERP system integration
You need an accounts payable automation service that is not only intuitive, but is compatible with your current accounting and enterprise resource planning (ERP) system. That’s because the AP tool needs to share master data, such as supplier invoices and purchase orders, with your ERP system at every stage to function correctly.
Maintaining and enhancing processes efficiently requires seamless integration. An excellent AP automation solution will unify everything into one place, with functions like pre-built connections to popular ERP software and natively integrated captures for easy invoice administration.
How to choose the best accounts payable automation solution
Businesses should evaluate their options thoroughly to find the best fit when automating accounts payable. Here are some tips to help you choose the best accounts payable automation solution:
- Understand your current accounting system: Gaining the most benefit from AP automation necessitates first having a deep familiarity with the current procedure and some thoughts on enhancing it. The process entails receiving, recording, approvals, and payment of invoices.
- Get buy-in from your trusted advisors: Consulting accountants and other financial experts to oversee the strategy and goals of your accounts payable are essential to ensuring AP contributes to the success and growth of your businesses.
- Identify your use cases: For full automation of AP processing, settling on a solution that can accommodate all of the business’s invoice processing use cases is essential. It enables you to set goals for your accounts payable automation solution.
- Get input from your team: When choosing any automated solution, getting buy-in from the entire AP department is best. That will promote a more seamless transfer to the new system, ensuring all your staff is on the same page.
Why you should choose MakersHub AP automation software
Made for industrial businesses
Unlike other businesses, industrial businesses have their own specific accounts payable needs. To maintain control of your supply chain, you need adaptable account payable software to bend to your specific workflows and processes. Many businesses spend hours manually entering incoming bill data. MakersHub eliminates this manual data entry.
Although numerous options exist for automating accounts payable for business, not all will be suitable due to factors such as the capacity to match receipts with various purchase orders and the need for close supplier communication.
Moreover, most process automation tools are horizontal, trying to be a jack of trades but ending up a master of none. These try to be all things to all customers, only succeeding in being woefully inadequate in most use cases.
MakersHub automation software embraces vertical SaaS. We have deep industry knowledge, so we understand clients’ pain points. That gives us the platform to create AP digitization solutions tailor-made for industrial businesses.
Seamless accounting integrations to QuickBooks Desktop and QuickBooks Online
QuickBooks is a popular accounting tool for small and medium-sized businesses. To use QuickBooks Desktop and QuickBooks Online, you may need to enter some data manually, such as invoice data and paper invoices, that is, if you don’t have an automatic payments system.
MakersHub AP automation software integrates seamlessly with QuickBooks to streamline accounts payable automation. That makes it possible for businesses to adopt a new method of handling invoices and payments that is simpler, quicker, and more secure.
The MakersHub AP automation software and QuickBooks Desktop and QuickBooks Online integration provide businesses with a centralized accounting system that harnesses the power of machine learning to sync big data, vendor lists, invoices, and facilitate payments in real-time.
Recommended by QuickBooks ProAdvisors
Businesses know the value of having access to a reliable and trustworthy account payable solution, and that’s why MakersHub makes the list of AP software recommended by QuickBooks ProAdvisors.
Certified QuickBooks ProAdvisors are business experts who know the ins and outs of the popular financial software. By recommending MakersHub accounts payable software, they ratify that it is an efficient and trustworthy tool for handling payables.
Smart Data Reader technology
MakersHub AP automation software allows the electronic capturing of invoices through OCR technology to correctly connect the PO with its corresponding invoice. The tool can capture more data accurately than any other AP tool since you can sync its 39 data fields to Intuit QuickBooks.
Enhancing real-life workflows
It can be time-consuming to switch back and forth between programs to enter the same information. MakersHub automation software will work seamlessly with ERPs and other financial platforms.
That will improve the AP team’s workflow efficiency, as they won’t have to switch between platforms to enter data and process invoices manually. Further, you won’t have to change processes dramatically since it only improves your accounts payable workflow by eliminating manual processes.
Key features of MakersHub automation software
MakersHub is an all-inclusive AP automation software that centralizes all your AP automation needs. Here are some of its key features:
- Bills inbox
- Smart bills reader
- Data entry automation
- Bills approval
- Payment processing
The core function of AP automation is to convert data into a standardized digital format to eliminate manual data entry. That means automation processes can help your business save time and money and streamline approval processes.
Automated accounts payable solutions free your team from repetitive tasks, allowing them to concentrate on higher-value tasks. Choosing the right automation tool may depend on factors such as the solution’s ability to integrate with your processes, policies, and automation level.
MakersHub is an OCR solution powered by machine learning. You can harness it to automatically extract data from invoices and put it to use in a fully automated accounts payable process. It is an excellent option as an accounting automation tool for businesses, thanks to its wide selection of features.