Last Updated on July 18, 2023
Today, we are living in a digital era. Everything is becoming digital. Be it banking, entertainment, and what not? But some businesses are still following the conventional way. They manage the account payables manually. When it can just be entirely automated. Thanks to Account Payable Automation (APA) software. The present system won’t prevail in the future. In short, you can call it a digital transformation in the field.
Want to know more about it? Let’s get going.
What is Account Payable Automation?
Managing accounts payable is more cumbersome than it sounds. A company has to undergo a lengthy procedure to pay the creditors. That is where APA comes into the picture.
Account Payable Automation is a technology that automates the accounts payable process. It frees you from the tedious processes. And eliminates the need to input data manually.
What’s more, it even provides easy-to-understand dashboards and analytical tools. They manage the accounts payable efficiently and error-free.
How does Account Payable Automation work?
The working of APA isn’t rocket science. APA software converts the invoices in a digital format. It is done through Optical Character Recognition (OCR). It helps in extracting the information. You can also customize the rules as per your needs.
Afterwards, the software pushes the invoices through a digital workflow. If the details in the invoice match with the purchase order, it pays the supplier without any human intervention. Also, you can manage the transaction limits. It ensures that manual check is there in significant transactions.
Why Automate Accounts Payable?
Like other technologies, it helps in automating non-core activities. So, you can focus on the core activities. Here are some reasons why people prefer account payable automation.
Time Savings
It is rightly said that time is money. Well, the statement is justified. Earlier, it was time-consuming and complex to approve the payments. It led to a delay in settling payments. By automating the account payable, the process became smooth. And the delays are no longer there. Besides this, the data was available on a real-time basis. So, you can make decisions accordingly.
A study revealed that automating the process reduced the days outstanding by 18%! A very efficient method, indeed.
Cost Savings
Employee Welfare Expenses contribute significantly to the operating costs. After all, employees are the greatest asset of a business. So, it is natural that their expenses will be high.
But APA software takes care of it as well. The manual process was way more expensive due to employee costs. You can’t expect them to work for free, can you?
On the other hand, the automated process is pocket-friendly. You will be amazed to know that a business can save more than 80% of the cost incurred through automating the processes!
Besides the transaction costs, it also helps you to save the storage costs. It may burn a hole in your pocket to preserve the data physically. But digital storage is much more cost-friendly.
Improved accuracy
Nobody is 100% perfect. That is why there were some errors in the manual account payable process. But the software is relatively more accurate. So, it improves accuracy and helps to detect an error ASAP.
Valuable Insights
The APA software does more than just processing the payments. Through a comprehensive dashboard, it gives valuable insights related to the payment status. And that too on a real-time basis.
Protection against Frauds
‘With great power comes great responsibility.’ But what if the power goes into the wrong hands? It will become a disastrous situation for a business.
But APA software acts as a watchdog to prevent fraud. You can control the access over invoice approval and the release of payments. Not only that, but you can also segregate the duties to catch fraud. It helps to check the errors, besides reducing the possibility of fraud.
Auditing made easy
Auditing means examining the financial information independently. It has various benefits to the company under audit. But it is not an easy task.
So, the automated software helps you to make audits easy. And reap its benefits to the fullest. It manages the crucial documents. And links them with transactions. It matches them with purchase orders and invoices as well.
It reduces the chance of losing the documents. What’s more, it even helps in complying with the prevailing laws.
Early Payment Discounts
Businessmen know the importance of collections. That is why they offer a discount on early payment.
But the manual process stood in the way of claiming such discounts. By automating the process, you can pay early. So, you can avail of the discount. It helps to save material costs. Thus increasing overall profits.
How to Choose the Best APA software?
If you have read till here, you will realize the importance of APA software. But it comes down to the software used. Good software can do wonders. On the other hand, good-for-nothing software may create problems instead. That is why you should keep the following in mind while choosing the best APA software:
Planning
The first thing you should do is the type of software. It is of 2 categories: Point solution and accounting suite. The former focuses entirely on automation. While the latter is more comprehensive and a complete package. So, choose the software as per your business needs.
Vendor Evaluation
After choosing the type of software, evaluate the various software by comparing their features, costs, and proposed solutions. To do so, you can check the product reviews. Also, you can consult your peers for valuable insights.
Vendor Selection
After evaluating the pros and cons, choose the vendor with the most suitable software.
That’s it! You are good to go.
Closing Remarks
Account Payable Automation (APA) is an innovative method to manage account payables. It helps to process the transactions seamlessly due to its advanced features. It may not look like a big deal, but it offers various benefits to the business. And bring a significant change in the operations.
Enalo is a neobank that helps you to do so. With the help of Payouts, you can pay your vendors and employees instantly. You can also send refunds to your customers. That too 24*7. And the entire process is no more than a child’s play. You have to add money to your account and the details of the beneficiary. That’s it. You can make payments with one click. Also, you don’t have to wait after adding a new beneficiary.
What’s more, you don’t have to worry about the reconciliation process as well. Through Virtual Accounts, you can reconcile the accounts automatically. They are a secured way of transacting. Also, you can get real-time information and business reports to make better business decisions.
To cut it short, you can consider Enalo a one-stop solution for account payables.
