Automating digital tasks is the most impactful way to help your team focus on real solutions and spend more effort being impactful problem solvers, as opposed to simply checking tasks off their to-do lists.
Accounts payable teams stand to benefit from automation as much as almost any other corporate function given the chain of command needed for approvals, the repetition of tasks, and the compliance and accuracy needed to fulfill payments correctly, and on time.
Ardent Partners recently reported that 56% of businesses still rely on paper-based processes for AP.
Businesses that adopt automation and do so effectively see immediate impact in productivity and employee and vendor morale, and long term impact in their ability to generate more revenue from their AP processes.
What is accounts payable automation?
Simply put, the accounts payable automation process eliminates the need for manual work across every step of your accounts payable workflow(s).
Workflows for invoicing, receipt verification, expense approvals, manual data entry, compliance and regulation, classification and coding, and more, can all be defined, standardized, and automatically completed via cloud-based software platforms.
AP automation allows for teams to connect disparate tools used across different workflows to minimize the reliance on spreadsheets, while saving time and money, and making life much easier for those involved in manual tasking.
Benefits of automating accounts payable processes
Time savings
The first, and perhaps most obvious benefit of automating your accounts payable workflows is the time you stand to save.
Everything from individual invoices to monthly reporting can be simplified and standardized for your entire accounts payable team — and made more accessible for those outside of the AP team.
Goldman Sachs estimates that AP automation can drive 70-80% time savings for those on staff. Even on the low end of that estimation, the associated effort and cost savings that come from automation can be quite dramatic.
The main impact factors on time savings are improved accuracy and improved productivity throughout your workflows.
Improving accuracy
Automating the accounts payable process is known to reduce errors, first because it eliminates the need for manual data entry where human error is inevitable.
Secondly, AP automation tools can automatically scan, validate, and merge numbers and amounts across sources to ensure that inputs match and are valid.
Not only does this create cleaner processes overall, but it minimizes confusion for vendors and contractors, which improves their experience in working with you.
Improving productivity
Accounts payable automation tools help your team get out of manual work loops.
Many workflows require the same task to be completed time and again, just with new information, or across different accounts.
You can automate repetitive manual tasks (regardless of the level of complexity) so your team can spend more time in the details, identifying possibilities to improve revenue, and working with vendors to build stronger relationships and a better overall experience for them.
Automated workflows also allow you to create Standard Operating Procedures for capturing required payments, approval, matching digital records, and making final payments.
With these practices standardized, the rate at which your team approves and realizes payments will increase, and you’ll be able to create detailed SOPs to make training easier and ensure consistency as your team grows.
Cost savings
According to NextProcess, organizations using fully automated accounts payable processing save an average of $14.93 per invoice processed.
With automated AP processes, you can avoid late fees, which can add up over time.
Having good relationships with all of your vendors can also lead to cost savings. In some cases, you may be rewarded for consistent early payments. In other cases, you may be able to negotiate more favorable terms and deals.
The other major area of cost savings? Resource management.
Each invoice and each workflow requires less effort from staff, so you won’t have to hire additional hands or pay for additional tooling to solve new problems.
For one, time savings allow for team members to be more readily available to tackle untimely problems.
Secondly, accounts payable software tools allow for non-technical members of the team to create and implement new resources without having to do so from scratch or via coding.
More scalable accounts payable processes
The time and effort needed to maintain and improve accounts payable workflows only becomes harder as you scale.
If your AP processes are fully automated and standardized, the only major requirement needed to scale your operations is to add more staff and train them with your SOPs.
Accounts payable automation best practices
1. Align with business objectives
It’s important to keep overall company objectives in mind when setting up the structure of your AP automation.
Automation will play a large role in creating SOPs, setting reporting baselines, and managing and communicating with internal stakeholders.
Aligning your automation efforts to business objectives also ensures accounts payable team needs will remain a priority for the organization at-large.
2. Centralize data and reporting
Use accounts payable automation software to create a central dashboard that can be used both within your AP staff and when communicating with other stakeholders.
For the payables team, centralized reporting will help you set and track KPIs more easily. Everyone on the team can track progress and success and ensure that the team’s efforts are in line with overall company objectives.
Centralized dashboards also make it easier for you to share performance metrics and updates with other stakeholders in the company.
3. Integrate across applications
As is always the case with automation, the more you can work into the fold, the better.
Look for a tool that allows you to connect all of your tools and spreadsheets across planning, forecasting, and auditing, and any other tasking stages.
4. Define and map out your workflow(s)
Map out how your workflows actually operate. This information will be crucial over time so your team knows when and where improvements can and should be made.
It’ll help identify bottlenecks and other inefficiencies in the present and help you keep track of what’s been tried or achieved over time to avoid duplicate efforts.
The right automation tool will let you do this within its platform.
5. Automate in steps and track progress
It’s okay to start more broad and make tweaks to your automations over time. Start with a basic set of standards and focus first on the functionality of your workflows.
After you have a basic structure in place, you can focus more closely on UX and ways to improve your data and reporting.
Focus on one issue at a time, and always keep in mind that the automation process requires continuing improvements.
What to look for in accounts payable automation software
1. Ease of use
The software you adopt should be intuitive to use, and it should align with the specific functional needs of your team.
Trying a demo of a platform will allow you to dissect its ease of use and set proper expectations.
Questions to ask yourself:
- How much training will be required for my team to be comfortable using the software?
- Is the platform easy to navigate? Is it easy for anyone (contractors, etc.) to jump in and understand and use?
- How well do different functionalities perform relative to what your team needs most (i.e. automatic invoicing, expense approvals, reporting, etc.)?
- What level of difficulty is required to create or edit workflows and automations? Is there coding required to do so?
2. Integration capabilities
Not all AP automation tools have “catch all” use cases, so it’s important to find the tool that integrates with (all of the) platforms you need and use, with the syncing capabilities to give you the right data when it’s needed.
Questions to ask yourself:
- How many tools does the software integrate with?
- How easy is it to connect the software to all of those tools?
- How seamlessly does the software monitor and update data?
- Is it real-time data or not?
- What level of action (if any) is required to update your data?
3. Customizability and flexibility
One of the most important factors of an AP automation tool is making sure it caters to your team’s unique order of operations.
Without the ability to define and update specific workflows and templates, your automation software will be capped in its ability to support your team, especially as you scale.
Questions to ask yourself:
- Can the tool segregate tasks/duties to fit your AP team structure?
- Does it allow you to create and share templates?
- Does it include role-based access?
- Are automations and workflows easily able to be edited and updated?
4. Ability to collaborate
Between your AP team, vendors, and other stakeholders, collaboration is key to accelerating review and approval processes.
Questions to ask yourself:
Does the platform:
- Offer the ability to centralize data and communications (for all stakeholders and vendors)?
- Make it easy to review invoices and transactions?
- Track audits and approvals across workflows?
Parabola as an accounts payable automation solution
Parabola is a workflow tool that helps accounts payable teams automate complex workflows across planning, auditing, data entry, and more.
It’s a no-code platform that enables you to pull invoicing and payment data through native integrations, APIs, and files (including PDF parsing).
You can map your entire process via drag-and-drop functionality and centralize all of your workflows and templates across invoicing, audits, and more. Any spreadsheet-based AP process can be automated in Parabola.
To learn more about how to automate your accounts payable processes in Parabola, set up some time with our team:
