Sticking to manual AP in 2024 is like trying to balance your books with a calculator and a mountain of receipts—error-prone, inefficient, and a time-drain. While some businesses use partial automation, it’s still not enough due to the manual component, which often cause bottlenecks in the entire process. The only way to reap the full benefits of AP automation is to overhaul the invoice processing with right tools. Unfortunately, most businesses are not yet aware of complete AP automation, and those that are may not be able to afford it.

In this blog, we are going to provide solutions to these problems. In the first part, we will give you a quick and thorough lesson on AP automation—its components, best practices, and benefits. In the next part, we will help you find ways to gain all these benefits without investing in setting up an AP automation software yourself (in fact, you don’t even have to lift a finger). So, let’s dive into the world of AP automation!

Why Automate Invoice Processing?

Automation solves every problem that an accounting department encounters with manual processing or partial-manual AP processes when it comes to invoice processing. “Starting with OCR, an automated invoice processing system accurately captures invoice data, minimizing errors and improving data integrity. This alone solves half the problems of invoice processing,” says our Accounts expert at Back Office Accounting.

Invoice processing automation completely eliminates manual data entry and cuts down approval cycles, speeding up the invoice processing. But the most understated benefit of invoice processing automation is the real-time tracking of invoices and increased visibility it provides into the entire process. This step plugs the gaps and saves hours of time and money spent. In short, AP invoice automation is not an add-on feature but a standard process every business must adopt and adhere to. But what entails this end-to-end invoice processing? Let us find out.

Key Components of End-to-End Invoice Processing

While invoice processing in a particular AP automation software tool may vary based on requirements, here’s what a general process of invoice processing in AP automation looks like:

  • Optical Character Recognition (OCR):Extracts the invoice data from paper receipts or electronic invoices.
  • Invoice Capture:Collects and consolidates invoices from all possible sources, which could be EDI, portals, and emails.
  • Workflow Automation:Routes the complete set of invoices to the appropriate approvals. This process can be customized based on predefined rules and processes according to requirements.
  • Data Validation:Automatically verifies the invoice information against receiving reports and purchase orders to eliminate errors.
  • Payment Automation:Generates electronic payments for the reports and automates transaction reconciliation.
  • Analytics and Reporting:Provides insights into AP performance, identifies gaps, and highlights areas of improvement for further optimization.

How to Automate the Current Invoice Processing?

An AP invoice automation software comes with all the components as an integrated solution. However, what most businesses fail to understand is that it is not a quick magic wand that immediately solves all issues. A business must follow a series of steps to correctly implement and fully leverage the benefits of AP automation software. Here are the best practices or steps for implementing invoice automation:

  1. Assess Your Current AP Process and Requirements:The AP process of every business varies according to their requirements. Each process has specific pain points they wish to alleviate and areas they need to improve. Having them all identified will be helpful when choosing the right AP invoice automation software or while customizing one.
  2. Choose the Right Technology and Involve Stakeholders:Having the right information about the current process will help businesses choose the technology that aligns with their needs and budget. This step also helps secure buy-in from procurement, finance, and IT departments.
  3. Training the Team:Training the AP team about the chosen AP technology is crucial yet often neglected. Training the staff helps accrue the right benefits without wasting time and becomes absolutely essential in the long run.
  4. Monitor and Optimize:Automation of AP is a continuous process where the staff regularly improves the process, and this happens in gradual steps. The only way to enable continuous improvement is to continuously monitor and optimize the process.

For businesses aiming to get the full benefits of the AP process, all the above steps may seem like obstacles. If your business is in the same boat, there is one way to avoid these hurdles and reap the complete benefits of AP automation without shouldering any of the above steps: Outsourcing Accounts Payable Services.

Leverage the Full Benefits of Invoice Processing Automation: Outsource Your Accounts Payable Services

As a trusted back-office accounting firm specializing in AP automation services, we provide comprehensive end-to-end invoice processing and AP automation solutions for businesses across all industries. By partnering with us, businesses can eliminate the burdens of manual processing, training, and monitoring of AP invoice processing, saving time and costs.

Equipped with some of the most advanced automation solutions, we help you fully realize the benefits of AP automation by customizing our services to meet your specific requirements. If you’re looking to resolve the challenges of your current AP process and enjoy the advantages of automation, consider outsourcing your accounts payable services to us. Whether you need complete processing or specific parts, we offer tailored services that address gaps or provide end-to-end AP solutions according to your needs.

For more information on our outsourced accounts payable services, click here.