Is The Accounts Payable Process Slowing You Down?
If you’re anything like the average company today, your AP department is awash in manual processes, whether that means cash management, data entry, dealing with paper invoices or double checking payment due dates.
The AP process is like a clock that relies on many different gears operating seamlessly in tandem in order to function properly. For most small businesses and even many large companies, this goal is never effectively met due to lack of planning, manual bottlenecks and many other factors.
But let’s assume you’re among the lucky few who developed an enterprise resource planning (ERP) system. Here’s a quick breakdown of what the first part of your AP process would look like.
1) The AP process starts when the accounts payable department receives an invoice. Invoices can arrive through a huge variety of different methods, including electronic invoices, physical mail, fax and many other possibilities. This is one of the major challenges presented by following manual processes in your AP department: a lack of streamlined consistency that can result in duplicate payments and many other issues.
2) When invoices come into the receiving department, they’re either physically delivered or digitally forwarded to the AP manager or other staff members for invoice processing.
3) Finally, the invoices are manually entered or digitally scanned to create a record. Manual invoice entry is also another large problem with the accounts payable status quo for many small businesses and large companies alike. Even an incorrect entry of a single field–a phone number, a due date, an invoice amount–can have large consequences, including late fees at the very least.
But you’re not out of the woods yet. In fact, if you’re relying on manual processes in your accounts payable department, you’ve only just begun.
If your company has some sort of payment authorization system or authorization hierarchy set up, then that would be the next step following entry of the invoice. As you might imagine, authorization hierarchies for larger invoice amounts can quickly become
complex webs in which even one missing signature can start the whole process over again and lead to a very irritated receiving department.
Once the invoice gains final approval, even more manual processes are on the horizon, from putting the check in the envelope, obtaining necessary signatures, and sending everything to the mailroom for delivery.
That’s a huge number of convoluted steps, don’t you think? Wouldn’t you rather automate all that away?
Automation: The Answer You’ve Been Looking For
Automating your AP workflow makes every single aspect of the process simpler. Your team will no longer be scrambling for signatures, wasting valuable time with menial data entry tasks, or devoting company money (and intangible human resources like creativity and problem-solving) to largely repetitive, unnecessary processes. You’ll even be helping the environment (and saving money on office supplies), as an automated AP process allows you to go entirely paperless.
When you have an ERP system set up, your entire AP process can be automated. You’ll be able to automatically match invoices to purchase orders and enter them into your system without any human employees devoting a moment of their time to AP tasks.
Invoices can be uploaded directly into the automated system if they’re received via email, or as a PDF, XPS or other file. Invoices that arrive via fax can be read right into your system as well. The most manually taxing scenario you can expect to run into with a well-established ERP and automation in place is taking a moment to scan a physically mailed invoice.
The end result of all of this is that every vendor invoice that comes through your business becomes an electronic invoice. The dependence on physical paper (and many aspects of office supplies) has been eliminated to create a much more lean department with a new surplus of resources to redirect to more profitable areas.
In far too many companies today, AP has become a bottleneck and a drain on valuable time and resources. Automation through Tipalti’s streamlined software makes every invoice an e-invoice through a paperless and largely person-less process.
You’ll be free to take those resources that were trapped in the manual AP nightmare (including vital employee time, productivity and creativity) and invest them in the mission of building a better, more successful company.
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