What is AP automation software and why do you need it?
Every organization has
its fair share of suppliers and the bills these suppliers raise are
recorded as accounts payables. The software that helps the Accounts
Payable (AP) division of an organization manage their operations is
known as AP automation software.
As the name implies, the
software automates the accounts payable business function and makes
it easy for AP professionals to keep a track of all the invoices that
the organization receives. It helps with receiving, approving,
processing, and paying invoices from suppliers. Instead of manually
processing the invoices, which can be tedious and error-prone, the
software automates many of the steps and ensures an efficient and
accurate process. This can be invaluable in a business process that
deals with cash.
So, why do you need it?
Workflow management: The
AP division, as with other business functions, has its own workflow
to process invoices. From receiving them from suppliers to sending
them out to their respective cost centers and business functions for
approval to payment, invoices go through a step-by-step process. With
manual practices, there could be bottlenecks formed at several
stages. Automation makes the process optimal.
Accuracy: It is not
uncommon for AP professionals to process invoices that have mistakes
or invoices that are duplicated. In either case, the organization
loses. To ensure complete accuracy, every detail in the invoice has
to be verified and every invoice has to be checked for duplicates.
This task when done by hand will take a lot of time and will not
guarantee results. But with AP automation, these instances do not
Speed: As mentioned
earlier, invoice processing is fraught with bottlenecks and obstacles
that cause delays. In some cases, when invoices are paid early,
organizations get discounts. However, if the process is such that
speed can’t be maintained, they lose out on these.