Accounts payable document management in the 21st century is quickly evolving. AP departments that hope to be efficient in the new environment must learn to streamline their operations using the latest in automation solutions. Organizations that don’t adapt or fail to transition risk losing to the competition.
Paper-Based AP Systems Are Inefficient
Accounts payable departments that still use hard-copy documents face a number of risks, not least of which is the sheer difficulty of managing and storing all the paper. Older methods of document management not only require more physical space but they are harsher on the environment too.
Traditional AP processes are also more expensive as departments must spend more time and effort in managing the sheer volume of data. Paper documents are more likely to experience damage and it’s difficult to transport files.
In the face of these disadvantages, solutions for AP departments abound.
Electronic Document Management Offers Numerous Advantages
Modern document management systems offer several benefits over traditional methods, with the primary advantage being the ease of organizing large amounts of data.
Document management software is now able to automate and streamline many important functions in a traditional AP department. This means, transitioning to an all-digital office is of paramount importance to any company that hopes to keep up with its competitors.
Converting to electronic documents offers a wide range of benefits, including:
- More efficient records management. With automation software, AP departments can develop faster approval processes. Additionally, document workflow is faster and better organized.
- Easier data extraction. When documents are stored electronically, retrieving data is much more efficient. Tasks that were unthinkable just a few decades ago, like copying and pasting an entire document, are now possible.
- Document capture and document scanning are quick and easy. Many software and hardware packages are able to help accounts payable offices convert paper documents to e-documents in a cost-efficient manner.
With the right tools, data capture is quick and easy. And with optical character recognition (OCR) software, text in a converted file is searchable.
- Cloud computing. Digital AP tools continue to evolve. Today, departments that don’t have the computer technology or don’t want to invest in it can instead opt for cloud storage of documents using a third party.
When AP documents are in electronic format, accounting departments, payable departments, and other sections of a business can quickly and easily gain access to the documents they need. Long hours of searching through file cabinets are a thing of the past.
Workflow Automation Creates a More Efficient Office
Workflow automation is a business system that uses digital solutions rather than manual or hard-copy processes. By adopting this newer way of performing tasks, an AP office can spend fewer hours on tedious work, as more efficient technologies come to the forefront. In particular, workflow automation produces the following advantages:
- Saves time. Data entry is quicker with automated tools and so is invoice processing. With less time spent on paperwork, an accounts payable department is able to achieve a higher level of efficiency.
- Fewer errors. Software programs commit fewer errors than human workers and this difference means paperless offices have greater accuracy. With a fully digital accounting system in place, a business will not have to correct as many mistakes as it did in the past.
- Faster invoice approval. Using digital business processes, invoices can be approved at a faster rate.
- Off-site work is possible. With mobile tools, employees can now work at home or out of the office, completing tasks with tablets, smartphones, and laptops.
- Multiple users. Several departments and employees can work on a single document simultaneously. It’s also possible to restrict who is able to access a document and to track who is editing or viewing files.
- Easier to manage lifecycles. With the right software, you’ll be able to quickly identify documents that are past their standard lifecycle, which is around 7 years. When documents are electronic, they are easier to archive and dispose of.
In short, accounts payable automation results in an office that is able to do much more than it could in the past.
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Recommendations for Paperless AP Offices
An AP department that adopts, either fully or partially, an electronic platform will find several new predicaments it didn’t have beforehand. In particular, it should try to accomplish the following goals:
- Monitor and enforce security protocols. Servers that don’t need to be connected to the Internet should be taken offline. Unauthorized personnel should not have access to electronic documents. E-documents that need heightened security because of their content should be password protected.
Other security measures, such as two-factor authentication, could also be used. With the right software, it’s possible to track who views or edits documents.
- Convert existing hard copies into digital files. Several tools are available to make this transition fast and easy. Making the move will free up office space and bring existing documents under the purview of new technologies. It will also reduce the time spent by staff searching for documents and filing them.
When you do scan hard-copy files into electronic format, make sure you scan original documents. This ensures the highest quality and accuracy in the output file and prevents errors from creeping in.
- Make e-documents searchable. When scanning old or new documents into electronic format, make sure the outputs are in a searchable format.
- Encourage vendors to submit electronic invoices. The transition to a paperless environment will be smoother if your suppliers are also using the industry’s latest tools. If you receive hard copies, additional labor has to be spent converting the documents into digital files.
- Adhere to government regulations. This means following guidelines delineated in HIPAA, GAAP, and the Sarbanes Oxley Act. Documents that could be subject to an audit in the future should have records of all activity.
- Secure early-pay discounts. Many AP software programs can identify eligible early-pay discounts on invoices. This is another cost-saving measure that today’s technology is able to deliver to accounts payable departments. Paying early also helps to build good relations with vendors.
The ultimate goal of paperless document management is to free up space where employees have more room to innovate. It’s also an environmentally sound and socially conscious way of doing business. In addition to convenience, it’s a modern method that gives your business a competitive edge.