Account payable is defined as the sum which is to be paid by a specific business organization after it has purchased the goods from a vendor. Account payable records and monitors when the company purchased a commodity and has not yet paid.
The expenses incurred under the Accounts Payable section are reflected in the current liability section of the company’s balance sheet. The account is closed when the company finally settles the payment from whom it has purchased the product. Therefore, it is imperative that every registered business firm avail specialized accounts payable services to maintain their financial books effectively.
NetSuite AP Automation
Maintaining a manual record of all liabilities is difficult as it utilizes time and energy. It is also a labor-intensive, error-prone process that sometimes becomes hard to manage. Thus, to overcome this issue of manual management, the process of accounts payable is now automated.
NetSuite AP Automation makes managing the accounts payable process easier, faster, and errorless. Since everything is automated, the software manages all the processes without human intervention. The entire process of invoice-to-pay becomes easier. The risk of fraud also reduces significantly, making the process safe and secure.
How NetSuite AP Automation Simplifies Account Payable?
Invoice capture
You can drag and drop the digital invoices to NetSuite or capture them via email. After the invoice has been dropped here, NetSuite scans it and notes all the relevant details like the vendor’s name, PO number, items ordered, etc.
Based on this information, it creates a bill using Artificial Intelligence. It also takes help from the previous bills to pre-populate the other credentials. You get both the invoice and the bill on the screen, enabling the staff to make any changes wherever required.
Invoice matching and approvals
After the system has captured the invoice data, then the system automatically compares and matches the invoice with the purchase order and delivery receipts to avoid any confusion. This also confirms the alignment of items ordered against the items received by the firm. After this process, only the correct invoice is forwarded.
Approval workflow
The AP automation system then forwards the invoice to the relevant department for checking. The invoices are made and forwarded according to the rules set by the organization for the AP automation system. The invoices are sent for approval. Alerts and reminders are also set to fasten the approval process. This ensures timely checking, prevents invoice overlooking, and makes the payment process smoother and faster.
Payment execution
After the system receives approval from the concerned department, it moves toward the payment process. The system schedules the payment to optimize cash flow, chooses the payment method preferred by the firm and the vendor, and executes the payment.
The main benefit of such automated payment is humans’ negligible intervention, which prevents any discrepancies. Automated payments also ensure time payments, help to avail maximum discounts and offers by making early payments, and maintain amicable relationships with the vendors.
Reconciliation and reporting
After the payment, the system aligns the payment transactions with the bank statement to verify the amount. This is done by carrying out the process of automated reconciliation by the system.
Automated reconciliation reduces errors and manual cross-checking. The automated system also generates a detailed report of the spending pattern, vendor performances, cost-saving techniques, etc., whose deep analysis can be done to make strategic investments by the financial team of the firm.
Benefits of AP Automation
AP Automation is one of the most important technologies business owners should include. The following are some benefits of the AP Automated system:
Enhanced efficiency
AP Automation streamlines the payment process and ensures timely payment by the firm. It leads to the creation of meticulous invoices, fastens the approval process, and increases the speed of payment. This makes the work easier and more systematic.
Improved financial accuracy
In the case of AP Automation, the finances are continuously checked and rechecked to eliminate any chances of fraud and errors. This leads to accurate payment, and that too within the given time.
Improved financial visibility
AP Automation system records and saves all the transaction details and aligns every payment with the bank statement, which leads to transparency in the payment process. This transparency enables the firm to make wise financial decisions in the future while spending strategically.
All business firms must use the AP Automated system to simplify accounting practices. Some firms, like Back Office Accountants, can single-handedly manage this department efficiently for the client firm. Collaborate with the professionals at Back Office Accountants and resolve all your bookkeeping issues.
