How to select accounts payable automation solutions for your business

 Automation in accounts payable has become imperative for any business in the market today. If you want to get ahead, you must get automation. Accounts payable automation solutions are a near fool-proof answer to all the problems that typically plague the accounts payable department. However, despite the number of solutions that are available in the market, not all are at the same level in terms of performance.

You must not only get accounting automation for your business but you must do so after giving all the options out there a good amount of thought.

What is an account payable automation solution?

The accounts payable process typically involves a series of processes that must be carried out in order. These include invoice processing, expense reporting, expense reconciliation, accounting, and integration. Traditionally, these processes were carried out painstakingly through hours of manual labor, with the help of spreadsheets and paper-based mechanisms.

However, in today’s day and age, there are solutions out there that are capable of automating the entire system of accounts payable, including all the individual steps and processes that go into it. These solutions are called accounts payable automation solutions. AP automation solutions are based on software and are, therefore, also called accounts payable automation software.

How do accounts payable automation software work?

Supplier invoices are converted into standard digital versions by AP automation software and then pushed through a digital workflow that results in suppliers getting paid.

The process starts with OCR or Optical Character Recognition being used to extract data from invoices. Some solutions even use ML or machine learning to adapt to patterns or trends over time to further streamline the process. After this expenses are recorded, reported, and reconciled automatically by the system. Finally, once approvals are automatically gathered, the payment is made and expense details are synced with your accounting system.

Key features of accounts payable automation to look for 

• Optical character recognition (OCR): OCR or optical character recognition is the technology that accounts payable automation software use to capture data from invoices and receipts automatically. All that you need is to take a photo of the document, and using OCR the system extracts the required information.

• Automated AP Workflows: AP workflows that are automated create an invoice flow that is fluid and enables a seamless transition from step to step. It enables the automation of coding, routing, and approval of invoices.

• Integration: Integration capabilities include the ability of an AP automation software to sync all your transactions with the accounting system you use. How seamlessly this is done will determine how good the automation software you use is.

• Automated invoice separation: Your software must also be capable of separating invoices automatically. Regardless of how many different invoices or vendors you work with the software you use must be able to seamlessly separate invoices.

• Three-way invoice matching: Three-way matching is the process of comparing the Supplier’s Invoice, Purchase Order (PO), and Goods Receipt Note (GRN) with one another before any payment is made out to the supplier. Your software must be able to do this automatically.

• Batch invoice processing: Processing invoices individually is infamous for being extremely labor and resource intensive, error-prone, and inefficient overall. Instead, your system should be capable of processing them in groups, automatically, with batch invoice processing.

• Vendor document storage: Cloud storage of vendor documents is another key feature to look out for. It can help you keep documents far more secure than manual storage allows.

• Vendor management portal: A vendor management portal is a feature that can go a long way in keeping your vendor relationships healthy. It can help you store vendor details and track payments easily.

• Approval processes for payments and AP transactions: Using software that is able to automate the approval process for payments and AP transactions can save you a lot of time and energy from doing the back-and-forth that is typical of traditional approval processes.

How to gather requirements for AP automation software selection?

• Document the current AP structure: Before you can go about selecting accounts payable automation solutions for your organization you must first document the current AP structure of your business. This can help you locate areas that need special attention and, therefore, automation.

• Map the current AP invoice process: Mapping your current AP invoice process can help you find potential areas of improvement and channels that can benefit the most from automation. For example, if your invoice data entry is suffering you probably need OCR.

• Identify system dependencies: System discrepancies or shortcomings are clear indicators of areas that need automation the most. You can use automation to address and, therefore, fix these discrepancies.

• Consider the current workflow rules: If your current workflow rules are not giving you the results you need or are causing way too much friction in the process you should probably consider addressing them with software.

• Draft problems in the current AP process: Once you have gone through the previous steps you should have a good idea of all the problems your current accounts payable process is suffering from. Draft a document containing the same to get a comprehensive idea of all the areas in your business that are lacking.

• Research, audit, & create the requirements: After you have drafted the problems the next logical step is to draft the requirements. Highlight the areas that are falling short in terms of performance and decide which solutions are best to fix them.

How to shortlist and select an AP automation software?

• Shortlisting AP providers: Create a shortlist of providers that meet your criteria for the features you require, this list should include providers that meet all your requirements.

• Attend product demonstrations: Key stakeholders from your company should attend product demonstrations to understand how well the accounts payable automation software will work for your organization.

• Ask required questions: Ensure when attending the product demos you ask relevant questions that will make it easier for you to use the platform. For example, ask how many systems the platform can integrate with.

• Finalizing the product: Once you have attended product demonstrations of all the shortlisted AP providers you must then make a decision on the same. Make sure you choose the provider that is best suited for your organizational needs.

Benefits of accounts payable automation for businesses

• Lower labor costs and time to process invoices: Automation in accounts payable can take out a lot of the manual labor that would otherwise be required. Not only labour will be eradicated but so will a lot of the time that is spent of accounts payable processing. This is particularly useful for accounts payable automation for small business because it helps save resources.

• Easier data entry: Instead of spending hours of labor manually entering data you can simply outsource the job to an AP automation software. This software can do the same job in half the time and with drastically fewer errors.

• Early payment discounts: The vendor management and auto-payment tools of AP automation software are especially useful in helping businesses gain early payment discounts. They can ensure you never miss a payment date again and at the same time gain access to discounts and offers on early payments.

• Reduction in duplicate payments & errors: The obstacles that come with manual AP management include erroneous recording of data, duplicate payments, and other such discrepancies. All of these can be eradicated with the help of accounts payable automation solutions.

• Improves vendor relationships: Tools like vendor management portals, automated workflows, and automated payments are all going to contribute significantly towards improving and maintaining the relationships you have with your vendors and suppliers. They can not only help you make payments on time but also give vendors greater insight and the ability to track payments.

Why choose Volopay to automate your accounts payable process?

Out of all the options out there in the market, there are many that have a good case for being the ideal accounts payable automation choice for businesses. Volopay is right up there in this conversation and makes a solid option for being one of the best accounts payable automation solutions currently available.

Volopay is expense management and accounts payable automation software that is capable of taking care of all your accounts payable needs. All the features described above – invoice processing, approval workflows, vendor management, auto-payments, cloud storage, integrations, and so on – are all within Volopay’s arsenal of features.

Additionally, you can also use Volopay to issue corporate cards to further streamline and control your AP systems!

FAQ’s

1. Which accounting systems does Volopay integrate with?

The accounts systems Volopay integrates with include Xero, Quickbooks, NetSuite, Deskera, MYOB, Tally, and Zohobooks.

2. Does Volopay support automated data capture?

Yes, Volopay is equipped with OCR (Optical Character Recognition) technology which allows it to capture data automatically.

3. Does Volopay support during the entire vendor lifecycle?

Yes, Volopay supports the entire vendor lifecycle, from invoice receipt to vendor payment.

4. How long does it take for a vendor to receive my payment with Volopay?

Vendor payments with Volopay happen almost instantaneously.