Accounts payable is the financial engine that keeps a company running. The team is responsible for producing and maintaining an accurate balance sheet: a crucial function upon which any successful business is built.
Yet too often, hardworking AP professionals are only thrust into the spotlight when there’s a problem. And for the teams that still rely on manual processes, there are a lot of potential minefields to navigate, including common mistakes like omission errors, transposition mistakes, incorrect data classifications, and more.
Any one of these data entry oversights can lead to late payments, disgruntled vendors and a frustrated boss. But when you’ve been squinting at a spreadsheet for five hours, who can blame you? The tedium of manual data entry is highly prone to errors–and costly ones, at that.
According to Accounting Today findings from last year, “dysfunctional and manual financial reporting processes are expected to cost U.S. businesses $7.8 billion this year.” That kind of financial hit will put even the sharpest AP team into the “problem child” box.
But what if you could ditch the manual processes that cause the most mistakes in the first place?
Automating AP takes human error out of the equation while freeing you up to focus on higher-value tasks that can directly benefit the company. As a result, you'll find yourself in the spotlight for all the right reasons, recognized as the true champion of your finance team.
Shifting to a Strategic Mindset
What if you didn’t have to dig through filing cabinets and email threads, chase down approvals, or cut paper checks? In addition to dramatically speeding up the payment lifecycle, automating AP frees you to focus on critical matters that directly impact your company, like negotiating vendor discounts that can protect your bottom line.
Let’s take a look at some of the ways that AP automation can help you take on a more strategic role and strengthen your professional development.
Save Your Company Money
Escaping the manual grind frees up your bandwidth and brain power to focus on high-value initiatives like saving your company money. In addition to eliminating late-payment fees, you’ll be better positioned to capitalize on incentives like early-pay discounts and volume rebates.
With complete visibility into the payment process, you’ll also be able to analyze and evaluate spending trends. This makes it much easier to pinpoint areas where you can save the company money, like savings from consolidating vendors or negotiating discounts.
These types of money-saving initiatives are guaranteed to get you the kind of attention you deserve — and help you build a case for a promotion.
Ensure Compliance
We all know what a headache compliance can be, especially when your company gets dinged with a nightmarish audit that costs your team time, money and sleepless nights.
But automating AP dramatically reduces the anxiety that surrounds maintaining your company's compliance and audit readiness.
Automation helps you eliminate data entry errors, provides transparency into the full lifecycle of every payment, and puts the data you need at your fingertips.
The best platforms have built-in document management functionality, which allows internal teams or auditors to find all payment-related documents, from invoices to POs and material receipts, instantly.
This provides easy access to the entire paper trail of a payment without the hassle of consolidating records housed across multiple locations.
Leading AP automation software also gives you the option to cloud host your data, which ensures that the latest compliance rules and regulations are applied on your behalf without the need for manual system updates.
Prevent Fraud
Identifying fraud risks is a lot easier with the visibility that AP automation software provides.
Sophisticated platforms use tools like optical character recognition (OCR) for data capture and automated matching to flag exception items like mismatched line items. This alerts AP teams to anything out of the ordinary, including fraud.
For example, if a vendor is sending more invoices than usual in any given month, this activity will be flagged for review. AP teams can then analyze payment records for suspicious activities like kickback schemes or invoice fraud. These tools allow you to be proactive rather than reactive when potential issues arise.
Improve Supplier Relationships
Strained relationships with your vendors can have a snowball effect that impacts everything from cash flow to your company’s reputation in the marketplace.
AP automation solutions help you provide consistency, flexibility and transparency that can bolster these all-important relationships.
And while some vendors are still wary of digitization, the kind of time and attention you’ll have to give to the relationship make it much easier to build and maintain trust.
Communication can bridge any gap of uncertainty, and vendors will appreciate the timely payments and improved visibility that automation provides.
When you adopt a strategic mindset, you can tackle these kinds of high-value (and highly visible) initiatives that will get you noticed, and help your organization grow and compete.
AP Champions in Action
It’s one thing to talk about how accounting automation can free you to focus on efforts that directly impact your company, and another to see those efforts in action.
Here are some examples of businesses that have experienced the strategic advantages of having more empowered AP teams, thanks to the implementation of AP automation.
Truck Country Eliminates Paper
Truck Country, a company with 24 commercial truck sales and maintenance locations, faced growth challenges due to manual paper processes in their AP department.
Beyond the grind of mailing invoices, parts order forms, and service documents to headquarters every week, this manual process was costing the company a small fortune in shipping costs.
Implementing DocuPhase’s document management system eliminated hundreds of thousands of paper documents and gave the AP team instant access to files through an easy-to-search repository.
Truck Country also digitized their accounting processes, streamlining invoicing and saving the company nearly $25,000 in annual shipping costs. This not only garnered recognition for the AP team's valuable contributions but also allowed them to support the company's growth by adding four new locations without increasing their team size.
JetBlue Captures Millions in Discounts
As the sixth largest airline in North America, JetBlue's AP department faced challenges with volume and complexity. To say their workload was "substantial" would be an understatement, given the 51,000 invoices, 4,000 approvers, and 10,000 suppliers they had to coordinate every month.
Enter AP automation, and the seamless efficiency of straight-through processing. With automation in place, nearly 90% of their invoices were processed without the need for any manual intervention, leaving their AP department with the time and bandwidth to focus on more strategic initiatives for the first time.
Among these initiatives was JetBlue's collaboration with DocuPhase to create a dynamic discount program for eligible suppliers. This replaced the fixed 30-day early payment discount with a scaled, rolling discount based on days paid in advance of the due date.
With this program in place, JetBlue’s vendors received faster payments, and JetBlue secured more savings. The AP team played a crucial role in achieving a remarkable $3 million in savings, surpassing their initial goal by $2 million–That’s one way to get the CFO’s attention!
Advocate for AP Automation
In conclusion, accounts payable automation isn't just a tool for efficiency; it's your golden opportunity to revolutionize your role, gain well-deserved acclaim, and drive your career to new heights while making a substantial impact on your company's bottom line.
To learn more about how DocuPhase helps accountants unlock their potential and contribute to organizational excellence, visit us online at www.docuphase.com.