In the fast-paced world of business, efficiency and accuracy are paramount. However, many organisations struggle to maintain these standards in their accounts payable (AP) processes.

Manually handling invoices, approvals, and payments eats up valuable time and disrupts your workflow. Not to mention, it is a breeding ground for costly errors. These bottlenecks can hamper your company's financial flow and operations. This is where accounts payable automation steps in to streamline the process.

By definition, an account payable represents the financial obligation a company has to its vendors or suppliers for goods or services received, while the accounts payable process encompasses the comprehensive management of these outstanding liabilities.

This includes everything from receiving and checking invoices to getting approvals and making payments on time. Now, picture transforming this complex process into a digital workflow — that is the essence of accounts payable automation. By incorporating accounts payable software into your processes, you can automate those tedious tasks, accelerate the process and gain greater control over your company’s finances.

Common AP Challenges and Solutions

Manual AP processes often lead to several challenges that can negatively impact a business, with some common issues that companies face being:

Late Payments: Inconsistent payment practices strain supplier relationships, incur unnecessary late fees, and can even disrupt your supply chain, impacting your ability to meet demand promptly. Such delays can result in reputational damage and a loss of customer trust.
Lost or Missing Invoices: This can create delayed payment cycles for the account payable, operational inefficiencies, and strain relationships with the supplier. More time and resources would also be expended in retrieving these documents as a result, meaning there will be reduced productivity and focus on other value-adding areas.
Manual Data Entry Errors: Manual data entry is prone to costly mistakes, possibly leading to overpayments, underpayments, and even compliance issues. These errors can severely damage your company's financial health and reputation.
Fraudulent Invoices: Falling victim to fraudulent invoices can result in substantial financial losses and expose your company to legal repercussions, regulatory scrutiny, and potential operational disruptions, eroding trust among stakeholders and inflicting damage to your hard-earned reputation in the process.
Lack of Visibility: Without a clear view of your AP process flow, you lack control over critical financial operations. This lack of control can lead to missed opportunities for early payment discounts, as well as challenges with cash flow and inefficient resource allocation, ultimately impacting your bottom line. Automation can provide the transparency needed to optimise these processes and capitalise on cost-saving opportunities.

What are the Benefits of Accounts Payable Automation Software?

There are a number of far-reaching benefits when it comes to the automation of your accounts payable:

Efficiency

Faster Invoice Processing and Payment Cycles: Automated workflows eliminate manual delays, accelerating invoice processing and payment cycles. This enhanced efficiency fosters stronger supplier relationships and unlocks opportunities for early payment discounts, positively impacting your bottom line.
Enhanced Cash Flow Management: Real-time visibility into payables and improved payment predictability enables more effective cash flow management. This allows businesses to make informed financial decisions, optimise working capital, and seize growth opportunities.
Improved Staff Productivity: By automating repetitive and time-consuming AP tasks, employees are freed to focus on more strategic and value-adding activities, driving overall business growth and innovation.

Accuracy

Reduced Manual Data Entry and Errors: Optical character recognition (OCR) and machine learning technologies accurately capture and extract invoice data, minimising manual intervention and virtually eliminating the risk of human errors that can lead to costly errors.
Improved Invoice Matching and Validation: Automated systems intelligently match invoices with purchase orders and receipts, flagging any inconsistencies for review. This proactive approach prevents payment errors and ensures compliance with internal controls.
Reduced Risk of Duplicate Payments and Fraud: Robust built-in controls and checks identify and prevent duplicate payments and fraudulent activities, safeguarding your company's financial assets and protecting its reputation.

Compliance

Enhanced Control and Compliance: Customisable workflows and automated notifications establish a robust framework for invoice approvals, ensuring that every payment is authorised by the appropriate personnel.
Transparent Audit Trails and Visibility: Comprehensive digital records provide a clear and auditable view of all activities, facilitating seamless compliance checks and internal audits.
Regulatory Adherence: AP automation solutions can be tailored to align with industry-specific regulations and standards, ensuring your organisation remains compliant and avoids costly penalties.

Key Features to Look for in Accounts Payable Software

When evaluating accounts payable automation software, it is crucial to consider the following features:

Invoice Processing with Artificial Intelligence

Multi-channel solution: Optimise invoice management with Esker's AP automation solutions, enabling processing in any format and from any input channel, whether invoices are received by mail, email, fax, or electronic data interchange (EDI). By turning a machine-readable EDI invoice into a human-readable version, you can now apply standard AP processes to EDI invoices as well.
Automated Invoice Capture: The software should seamlessly capture and digitise invoice data from diverse formats (paper, email, PDFs), leveraging advanced OCR and machine learning capabilities.
Data Extraction and Validation: The system should intelligently extract data from invoices, meticulously validate it against purchase orders and receipts, and proactively flag any discrepancies for further review.
Intelligent Invoice Routing and Matching: The software should autonomously route invoices to the appropriate approvers based on predefined rules, and precisely match them with correspo
Synergy AI: optimises invoice data extraction by using machine learning and deep learning to accurately extract and populate into a validation form (or auto-approved when no exception is detected).nding purchase orders and receipts.
Predictive invoice coding: Using AI-based predictive line items to code PO and non-PO invoices (e.g., G/L account, tax code, cost type, cost centre), our AP automation solutions auto-match invoice data with the corresponding orders and goods receipts — enabling staff to quickly review and resolve exceptions from a single, consolidated view.
Touchless processing: Invoices that require payment approvals are automatically routed to the right individual or group in charge. AI technologies are working hand-in-hand to enable touchless AP processing and expedite invoice payment approvals.

Invoice Approvals

Configurable Approval Workflows: The software should empower your organisation to define and configure approval workflows that align with your unique business requirements and internal control policies.
Mobile Approvals: The capability to approve invoices on mobile devices provides approvers with the flexibility to stay connected and make timely decisions, regardless of their location.
Automated Reminders and Escalations: The system should proactively send automatic reminders to approvers and escalate invoices that have exceeded predefined approval thresholds, ensuring timely processing and mitigating the risk of late payments.

Integration with Enterprise Resource Planning (ERP)

Seamless ERP Integration: The software should seamlessly integrate with your existing Enterprise Resource Planning (ERP) system, facilitating frictionless data exchange and eradicating the need for manual data entry.
Real-time Financial Visibility: Robust integration with your ERP system provides immediate and comprehensive insights into your data, giving you the ability to make financial decisions confidently.
Automated Reconciliation: Automated data transfer between AP and ERP systems eliminates the need for manual reconciliation, reducing the risk of errors and freeing up valuable finance resources for higher-value tasks.

Choosing the Right AP Software

Selecting the right APsoftware is crucial for maximising the benefits of automation. Here are some expanded tips to help you make an informed decision:

Assess Your Business Needs and Pain Points: Do not just jump into the software selection process without a clear understanding of your needs. Conduct a thorough assessment of your current AP processes. Identify the bottlenecks, inefficiencies, and pain points that are hindering productivity and causing financial losses.
Consider Scalability and Future Growth: Think strategically about where your business is headed. Will your invoice volume increase? Are you planning to expand into new markets or acquire other businesses? Choose an AP automation solution that is flexible and can grow and adapt to your evolving business needs, ensuring it remains a valuable asset for years to come.
Evaluate Features, Ease of Use and Vendor Support: Compare different AP automationcompanies and their offerings. Look beyond just the feature list. Consider the user-friendliness of the software, ensuring it is intuitive and easy for your team to navigate. Bear in mind that even the most powerful software is irrelevant if it is too complex or lacks proper support.
Request Demos and Compare Solutions: Do not just take the vendor's word for it. Schedule demos with different AP automation companies. Compare different solutions side-by-side to determine which one best fits your organisation's specific needs and workflows.
Read Customer Reviews and Case Studies: Learn from the experiences of others. Read online reviews and case studies from businesses that have already implemented AP automation solutions, and pay attention to both the positive and negative feedback for a balanced perspective.

Accounts Payable Automation From Our Client - Sunway

Sunway Group is one of Southeast Asia’s leading conglomerates, with a primary focus on real estate, construction, education, and healthcare.

With over 50 locations worldwide, it was essential for the group to consider solutions that could reduce inefficiencies and improve business workflows.

They automated their Accounts Payable (AP) processes using Esker’s solution to address high invoice volumes and long processing times.

Starting in 2016, the AP automation now covers 80% of its business units and integrates with Oracle JD Edwards and IFCA ERPs. This transformation has reduced processing times by 50%, improved supplier collaboration, provided 100% visibility into AP processes, and reduced office filing space by 40%, while upskilling staff and enhancing communication.

Learn more about the success story here.

Take the Next Step Towards Accounts Payable Automation

Accounts payable automation offers a powerful way to streamline financial operations, improve efficiency and reduce costs. By embracing technology and choosing the right accounts payable software, your business can free up valuable resources, enhance accuracy and gain better control over your accounts payable processes. It is important to keep in mind that efficient accounts payable management is not just about paying bills; it is about optimising cash flow, strengthening supplier relationships and enabling informed financial decision-making.

Contact Esker today to learn more about our accounts payable software to see how we can help you transform your accounts payable processes. Request a free demo and see first-hand how automation and digital transformation can revolutionise the way you manage your accounts payable. At the same time, do also consider exploring the benefits of our accounts receivable software to further enhance your financial management capabilities.

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What is Accounts Payable Automation?