Wondering if you’ve outgrown manual bookkeeping? We've got you covered in the battle of Excel vs. accounting software.
Business Finance Management
August 29, 2022
Automation has become increasingly appealing as businesses continue to look for ways to cut costs and streamline operations. One area where automation can be beneficial is Accounts Payable (AP).
AP automation can save businesses time and money by streamlining the invoicing process and reducing the amount of manual work involved. In this blog post, we will explore how to automate accounts payable and the benefits of doing so.
If you are looking for ways to improve your accounts payable process, this blog post is for you.
Automating accounts payable (AP) means using technology to complete manual tasks and streamline the AP process. By automating AP, businesses can improve efficiency, reduce error rates, and improve cash flow management.
Accounts payable software automates processing supplier invoices, recording payments, and closing completed invoices. Instead of relying on a teammate, or yourself, to complete daily tasks, the automation process lifts the responsibility from the assigned employee and takes on these mundane tasks.
Accounts payable has a multi-step workflow process to ensure invoices are recorded correctly and paid. Automating the entire operation saves time and money with the bonus of lower error percentages. Manual AP workflow requires multiple approvals through different steps meaning the same paper is passed between numerous people.
This can be detrimental to small teams. Startups without bookkeepers spend around 41% of their time doing bookkeeping responsibilities. When the workflow isn’t efficient, the entire company is affected. Hence the popularity of automation.
Some software allows you to implement a digital approval workflow that streamlines all the necessary steps to complete invoices, such as uploading paper invoices directly from vendors and suppliers. Once uploaded, the software can use optical character recognition to pull the needed information off the invoice and record it digitally.
This type of automated invoice processing stores all vendor data allowing you to schedule payments. Bookkeepers record each invoice payment then wait for the vendor to accept it. With automation, you can check where the invoice is in the processing journey. Vital information remains in the software’s cloud for easy access.
Automating matching is a time-consuming task bookkeepers have to complete for each invoice. It’s an essential part of the process, but it's easy to make errors when there is too much on your bookkeeper’s plate.
When the process is automated, the software automatically matches invoices to open orders and records any discrepancies between the two. Computers are built to catch errors by using their advanced algorithm within seconds. As good as someone can be at their job, errors go unseen more often when matching is done manually.
Once approved, the software automatically schedules the payment to be made or pays the invoice. When the vendor accepts the price, the invoice is recorded as closed and added to the total AP amount on your balance sheet.
Accounts payable automation is the new-age solution to different problems founders experience in the first few years. Automating AP reroutes the responsibility of simple but necessary tasks to software. It eliminates the need to hire an entire financial team, thus reducing costs — just hiring a part-time CFO costs at least $300 an hour.
Unsure of how to start the automation process? Below we’ll share our five top ways to automate accounts payable.
2020 showed us that the world we know could change with the snap of a finger. With remote work continuing to rise in popularity, manual payment processing cannot continue to be the only option companies use. Implementing digital payments that can be accessed when needed removes the need to keep track of paper checks and receipts that can get lost in the shuffle.
The exclusive purpose of the AP account and process is to record and complete invoices smoothly, so why use a compilation of different types of invoices? Paper invoices can get lost easily, and other digital invoice (PDFs, JPEGS, DOCxs, etc.) files take different processes to open, record, and close. Accepting e-invoices only simplifies the process and keeps the fluidity in AP workflow.
The accounts payable department, while small, can still clog the approval process when information needs to be bounced from one person to another. Rather than zigzag through the whole AP team, utilize software that sends the required information directly to the person who needs to approve it.
Invoice matching is the tedious process of finding the proper invoice to go with the correct payment and what was received. Then, the company ID and all other information require authentication before closing the invoice. Set up a system that allocates a unique ID to the party needing payment. Then the matching invoice can be paired with both ID and the amount paid.
It’s essential to track when bills are due and which are paid, but it’s tedious work. Automating bill pay ensures invoices are delivered on time and in full. There’s no scrambling to check the ledger when a fee arrives for late payments.
A founder’s time is precious. There’s an endless list of things to do when you’re running a business. Founders and partners take on the responsibility of multiple people all at once and, sometimes, don’t have experience in the area. Finance is a tedious but crucial portion of successfully running a business, but doing your own bookkeeping isn’t always the most beneficial decision.
We want to make automation a breeze for founders looking to save time and money. When you automate the accounts payable process with Zeni, you’re not just getting a seamless AP workflow but the whole bookkeeping package.
All responsibilities of a typical bookkeeper are automated with our AI software. Our clients can view their financial information in real-time. Plus, you’ll get a dedicated team of finance professionals to help you manage your books.
Automation is a technological advantage a business owner should take advantage of. At Zeni, we want to take the burden of bookkeeping off your shoulders so you can focus on other aspects of your business.