In 2023, the integration of automation in the field of accounts payable continues to showcase the significant benefits the switch delivers. As the technology gets a stronger foundation – while simultaneously increasing the role of AI – it will be on AP departments to keep pace and steadily evolve.

Achieving the highest levels of operational efficiency for any field requires recognizing and utilizing the most effective tools and resources to guarantee successful, streamlined workflows. This is precisely where AP automation lands, offering the potential for companies to have their AP teams achieve exceptional standards for relevant performance metrics (KPIs). 

Businesses must select the AP automation software and technology that is an ideal fit for their company, meeting its unique needs. Additionally, quality training and oversight during the integration process are essential for maximum return on investment (ROI) in the long term. 

Invoice processing is the crux of accounts payable responsibilities 

To say that manual invoice processing is a time-consuming, error-prone, and inefficient task would undersell the drawbacks to such a degree that charges should be filed. Accounts payable departments have a massive amount of work to accomplish, and the biggest drag on workflow efficiency is invoice processing. 

At its core, invoice processing encompasses the life cycle of an invoice, from receipt of an invoice to its completion and storage. The primary steps of invoice processing are:

1. Capture, code, and match the invoice

2. Receive authorization from appropriate personnel

3. Invoice payment

4. Archival

What is automated invoice processing? 

Accounts payable automation digitally accomplishes a variety of standard AP tasks. Operating with remarkable efficiency, the technology can efficiently tackle the core steps of invoice processing: invoice receipt, matching, workflow, archival, and auditing. Here, we see how establishing workflows via this system is an essential part of effectively utilizing its capabilities. 

1. Invoice Receipt, Data Capture and Extraction
   Invoices are received either electronically or in paper form and converted to digital. Upon the initial receipt of an invoice, the software automatically captures and extracts necessary data before coding the document in line with your unique financial system.

2. Routing and Approval
   The automation platform moves on to the approval stage of the process. The software can obtain approval from the relevant personnel as instructed by the AP team. According to user instructions, approval will be automatically obtained without the need for any human involvement (outside any initial setup, naturally).

3. Three-way Matching
   Three-way matching is conducted with invoice receipt and approval completed as established by the workflow. The software can be wholly responsible for matching invoices with purchase orders and goods receipts. Any exceptions are noted in the system and the AP team is alerted.

4. Archival and Storage
   AP automation will digitally store invoices in the cloud, relegating physical storage to the past. All invoices are archived according to the department’s coding and organization preferences.

In each instance, automation software can step in to tackle the task, freeing up team members without damaging the quality and accuracy of the work.

Advantages of automated invoice processing for AP departments

Automated invoice processing is accomplished swiftly, a task achieved significantly faster than if done by hand. This is possible due in no small part to the benefit of streamlined workflows.

1. Comprehensive Time Savings

2. Broader Efficiency Boost

3. Reduced Human Error 

4. Built-in Compliance and Audit Preparation

Comprehensive Time Savings

Nearly every element of work that AP automation can properly take over experiences noticeable time savings. While there are essential tasks that are impossible to automate, those aspects with manual, repetitive labor are inherently faster when handled by a computer. 

Broader Efficiency Boost

Streamlined invoicing and payment processes are only part of AP automation capabilities. For example, AP automation software is designed to be integrated with existing financial systems, ensuring improved performance on multiple fronts. 

Reduced Human Error

The benefits of reducing human error are clear. When accuracy increases, efficiency improves. As efficiency improves, time is saved. Time saved, in turn, fuels cost savings. 

Eliminating payment errors, and avoiding the additional effort necessary to correct the errors, boost efficiency metrics and strengthens vendor relations.

Built-in Compliance / Audit Preparation

Transparency and security are immediate and long-term benefits of AP automation, with the advanced technology providing enhanced visibility into the overall process. With compliance rules guiding system protocols, teams can be alerted by specific issues, such as suspicious activity and duplicate invoices. As the invoice process is completed and archived, with any potential concern logged and addressed, the system automatically performs audit preparation. 

Best practices to implement with AP automation integration

Expedited, organized, and accurate – automated invoice processing is an exceptional resource for any company. The accounts payable team will have an incredible opportunity to boost their productivity – but embracing the technological shift is only part of the bigger picture.

As with any major technological evolution businesses adopt, adopting AP automation can be complex. It won’t always go smoothly, but the desired result can be achieved with a solid foundation to work off. 

There will be varying levels of hesitation and resentment, eagerness and overexcitement. Preparing your team, company, and partners in advance is essential to streamlining the process and improving individual experiences. Taking steps to ensure communication is figuratively static-free is similarly crucial.

Ultimately, clear communication, a quality plan, and a long-term vision will all make this transformation a productive choice for all parties. 

Plan the Implementation

It is important to have an integration plan in place before beginning the process. Company leadership and AP team members will appreciate a precise vision for the coming experience. Part of that vision involves mapping out a timeline to guide the project (even if things take longer than anticipated). Establishing who is in charge of the process will help alleviate potential crosstalk and wasted effort. Clarifying everyone’s roles and responsibilities at the outset will preemptively help avoid missed steps and miscommunication. 

Phased Integration

Rushing into anything never pays off in business or life. With AP automation, a phased rollout of integration will pay dividends. Ensuring each process is thoroughly understood and the team can achieve it before moving on will provide a firm foundation for any follow-on processes. 

Communication, Communication, Communication

Integrating automation technology is a great step that impacts many individuals before, during, and after. Given that fact, clear communication delivered with foresight must be a priority. 

1. Team communication. While all AP team members directly and indirectly involved or affected by the integration process will need to be kept in the loop. The exact extent to which they are updated will undoubtedly vary as appropriate. Still, clear, consistent messaging and direction will ensure the accounts payable department is on the same page throughout the journey. 

2. Interdepartmental. It can seem impossible for businesses to avoid the dreaded silo-mentality, the territorial possession of knowledge between departments. In truth, interdepartmental cooperation is more vital than ever as technologies evolve at breakneck speeds. Many other departments will be impacted to some degree by integrating and utilizing AP automation and will need to be kept in the loop where and when appropriate.  

3. Vendors. Maintaining positive relationships with your vendors is crucial to smooth company operations. Ensuring your suppliers are aware of the transition, how it impacts them, and what they need to do (or don’t do) is paramount to guaranteeing no hard feelings and avoiding hiccups at all costs. 

Track Progress with KPIs

One of the prime benefits of accounts payable automation is the easy accessibility of performance metrics. AP automation software empowers team leadership with troves of real-time data compiled into actionable information. Perhaps a workflow can be tightened by eliminating redundancy, or certain processes expose the company to unnecessary risk. Whatever the data might say, individuals in leadership and the teams under them can utilize it to improve individual and departmental performance.

Maximize Workflows

As your company adopts AP automation, one thing will become increasingly clear: workflows are everything. AP automation software enables teams to create and implement precise, intentional workflows. These workflows will be able to expose processes that need to be addressed. These efforts will begin to grow exponentially as bottlenecks and breakdowns are resolved. 

Written By: Daniel Redding
Date: February 2023