Traditionally, the primary responsibility of the account payable (AP) team has been to enter invoice data, ensure approvals are routed to the appropriate individual, and close the approvals. However, with the evolution of automation in the AP process, the role of the AP team has evolved beyond pushing papers and data entry. The automated accounts payable process has enabled the AP team to become more strategic, efficient, and data driven. This shift offers advantages to both the organization and the accounts payable department.
Accounts payable Automation uses technology to streamline the tasks associated with managing and paying suppliers. This process involves automating invoice capture, approval routing, payment processing, and supplier management, among other things. AP automation benefits businesses beyond just payment issuance. Here are some ways AP automation adds an advantage to your business.
- Increased efficiency: Manual accounts payable processes are often slow, error-prone, and require significant time and effort. AP automation can streamline the process, eliminating manual tasks in managing supplier invoices and payments. Automation can also reduce the risk of errors, delays, and duplicity ensuring that payments are processed accurately and on time.
- Improved cash flow management: AP automation can help businesses manage their cash flow more effectively. By automating invoice receipt and processing, businesses get better visibility into their financial obligations and make more informed decisions about when to pay suppliers. This can help businesses optimize their payment schedules, ensuring the effective cash flow that’s needed to pay suppliers without compromising financial stability.
- Enhanced supplier relationships: AP automation can help businesses build stronger relationships with their suppliers. By automating the payment process, businesses can ensure that suppliers are paid on time, every time, which can help build trust and confidence in the business relationship. Additionally, automation can free up time for AP staff to focus on building stronger relationships with suppliers, negotiating better terms, resolving issues, and enhancing service experience.
- Increased data accuracy: Manual AP processes are often prone to errors, such as inputting incorrect data or misreading invoices. AP automation can help eliminate these errors by automatically capturing and validating data from invoices, reducing the risk of human error. This can help businesses avoid costly mistakes and reduce the need for manual data entry and reconciliation.
- Improved compliance: AP automation can help businesses ensure compliance with regulatory requirements, such as tax laws and accounting standards. By automating the payment process, businesses can ensure that payments processed match criteria with all relevant regulations and that all necessary documentation is stored appropriately. This helps businesses avoid penalties and fines and reduce the risk of non-compliance.
Aeries’ Role in Accounts Payable Process Automation
If you’re a portfolio company of a private equity firm looking to outsource your Finance & Accounting process to a reliable partner, then Aeries can help. Aeries brings over 15 years of experience in the Private Equity PortCo domain, making it well-versed in the transactions that occur in the PE industry.
Aeries provides Finance & accounting consulting, evaluation, and implementation of finance functions. These functions can help you automate your mundane and time-consuming F&A functions and ensure a successful outcome. With Aeries’ expertise, you will have a valued partner to guide and support you throughout your F&A concerns.
In conclusion, accounts payable automation is a powerful tool that can help businesses streamline their payment processes, increase efficiency, and save time and money. AP automation also enables finance teams to focus on strategic tasks that can drive growth and profitability. With these advantages, businesses can gain a competitive edge in today’s fast-paced and ever-changing business environment.