Leveraging AP Automation for QuickBooks

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By switching from AP manual entry to best practices, advanced automated procurement to pay (P2P) software, you lower costs. And you improve internal control to reduce paying duplicate or fraudulent vendor invoices. Corporate governance, including over accounts payable and cash, is your responsibility. Use an add-in integrated with Intuit’s QuickBooks Online software. Choose an app that includes self-service vendor onboarding. 

How Valuable is Accounts Payable Automation?

TechValidate issued a research and survey report. The title is Trends in Accounts Payable: Analyzing Finance and AP Operations. The report cites the APQC (American Productivity & Quality Center) metric, Accounts Payable Cost.

In a referenced CFO Magazine article, it’s the “total cost of processing accounts payable per invoice”. In February 2018, the top-ranked 25% of organizations surveyed by APQC had an AP invoice processing cost of $2.07 or less. This benchmark metric was $5.83 for median performers and $10.00 or more for the bottom performers.

The article cautions that the Accounts Payable Cost varies depending on industry and other factors. So, you can see that successful AP automation provides very significant cost savings. 

What is AP Automation with QuickBooks?

Accounts payable automation streamlines the entire payable process from vendor invoicing to payment. QuickBooks is an accounting software system serving the small and medium business market. QuickBooks Online requires some manual data entry, including invoice data and the use of paper invoices. That’s the case if its recurring payments and electronic banking transaction downloads aren’t selected. QuickBooks Online Advanced was released in August 2019. According to the QuickBooks Online Advanced FAQ, it’s designed for growing companies, with the ability to handle up to 25 users. QuickBooks Advanced adds new automation features. These features include automated workflows and advanced batch invoices & expenses processing. QuickBooks Online Advanced is a step up from QuickBooks Online Pro. QBO Advanced users include customers who have used  QuickBooks Desktop Enterprise software. They can use the automation features of QuickBooks Online Advanced to increase productivity. 

QuickBooks offers wholesale discounts to some CPAs and other accountants who are QuickBooks users. These accountants who buy subscriptions in bulk for clients, charge their clients as part of their services bill. Currently, QuickBooks offers wholesale discounts to accountants for QuickBooks Online. QB plans to add wholesale discounts for QuickBooks Online Advanced. CPAs and bookkeepers can be the Accountant User on QBO Online if they don’t use QuickBooks Online Accountant (QBOA). The Accountant User has access to their clients’ QuickBooks Online software via a list of links with each client’s name. 

Adding-in new features to QuickBooks Online (QBO) or QuickBooks Online Advanced (QBO Advanced ) can get your small business to the level of top performer on the Accounts Payable Cost metric. What you need is the seamless API integration of a QuickBooks App that looks and feels like you’re using the QuickBooks Online software. 

AP automation uses data science AI and ML rules or algorithms to validate suppliers and invoices. That reduces fraud. Robotic process automation (RPA) automates routine AP workflow processes.  Automation effectively handles the approval process by approver level and responsibility. AP automation can efficiently code and batch process supplier invoice payments or other business payments. Payment automation also generates employee expense payments and other cash disbursements (bill pay). The best software uses a vendor’s preferred payment type and global currency. Payment types may include credit cards, prepaid cards, PayPal, eCheck, checks, Global ACH payments, U.S.  ACH payments, or electronic fund transfers (EFT). Although the AP automation software vendor may offer wire transfers as a payment method, electronic ACH payments are safer than old-school wire transfers. Fraudsters may use wire transfer information to defraud.

The best AP automation software includes self-service vendor onboarding through a software interface. Suppliers enter contact information. They upload vendor invoices into the system. Suppliers also provide W-9  or other required tax reporting forms. Supplier entry reduces errors and shifts part of the AP workflow to vendors. It reduces your accounts payable processing costs.

Then your company takes over. AP automation software matches paperless invoices with digital purchase orders and receiving documents. It can include optical character recognition scanning (OCR) if the vendor invoices are not uploaded into the software by the vendors. The best AP automation accounting systems use vendor verification databases. Automating AP includes an electronic push approval workflow with PDF documents attached. AP automation software gives only authorized personnel like the CFO and Controller access to cash accounts. You can pay invoices without inefficient and costly paper checks. Use either efficient large batch electronic payments processing or on-demand electronic cash disbursement. That’s called bill pay. The system can handle payment data for independent contractors like freelancers. AP automation produces informative real-time reports for the ap process.

Internal control features that you should seek in accounts payable automation software include:

  •  KPMG-certified FATCA tax compliance
  •  Audit trails
  •  Role-based views

These must-have features mitigate risk and ensure compliance.

How Can I Learn More About Accounts Payable Automation?

MasterCPE is a provider of online CPA continuing professional education (CPE). It offers a course written by Delta Publishing (DeltaCPE, LLC) in July 2019, Accounts Payable: Recent Trends and Best Practices. You can either buy only that course or complete it as part of MasterCPE’s $149 per year CPE subscription plan. The online course covers the benefits of using AP automation, including a section on Modern Accounts Payable in the Digital Age. DeltaCPE’s thought leadership message in the course material highly encourages financial managers to adopt AP automation now: 

“The Accounts Payable department is evolving rapidly as spend analysis is critical for cash forecasts and the ability to evaluate vendors and negotiate payment terms affects a company’s profitability. Companies should take a more strategic approach by deploying technologies that automate the primary accounts payable cycles of receiving, approval, and remittance to pay.  Introducing more automation to accounts payable management is a growing trend to enhance controls and improve spend analysis.”

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