5 Ways To Streamline Your AP Processes

Every company and organization has to deal with accounts, receivables, suppliers, procurement and invoicing. It’s just an essential part of running a business. But sometimes the process can be streamlined or made easier by introducing automation. Automation can free up your staff to handle other essential parts of the operation and make their jobs much easier while eventually saving you money, improving supplier relationships, and empowering your company to succeed. Making your accounts payable process easier is better for everyone. Here are a few ways to streamline your organization’s AP processes.

Go Paperless

In the modern business world, having excessive amounts of paperwork seems counterintuitive at best. But there’s more to it than that. Paper invoicing doesn’t just generate more work for your AP department, it can cost more money to process invoices in general. That’s because paperwork and paper invoicing in general is kind of pricey. The average cost of processing a paper invoice is around $12 to $30. Conversely, e-invoicing will cost almost nothing at all. Depending on the complexity and size of your AP department and the quantity of the invoices you are processing, it can be as high as $40 or more to process them with paper. If that weren’t bad enough, maintaining paper files can really start taking up a lot of space. If you decide to use automation you’ll achieve a paperless AP process. This will not only free up space but also end up saving significant amounts of money for your organization. 

Improve Your Workflow

The suggestion to “improve your workflow” can be pretty abstract. How exactly are you supposed to do that? It comes down to implementing methods to make everything flow more smoothly. 

If you’re manually inputting the data for invoices, then manually checking and approving them, it’s going to take a lot more time than simply automating the process. Using a software solution, you can match your workflow to the capabilities of the program so that you’re not wasting time or generating errors within your invoicing. Improving your workflow is going to work wonders for your department’s productivity in the long term and have the added benefit of reducing spend risk and making suppliers happy through prompt invoice payments.

Use AP Automation

Improving your workflow is important, but a surefire way to increase productivity and optimize resources is to use accounts payable automation. Just like the name implies, AP Automation is a valuable way to streamline your operations. One of the biggest problems in most AP departments is that much of the work is performed manually by several people. Unauthorized spending or payments, duplicate invoices, matching errors, inaccurate data entry, and wasted time are all problems inherent to the manual AP process. By introducing ideas like multi-level validation and the ability to approve invoices from anywhere such as a mobile phone, you can increase the department’s productivity while maintaining its integrity.

Use Cloud-based Automated Invoicing

One of the best things you can do for your organization is to introduce automated cloud invoicing into your AP workflow. This has significant advantages over manual processing and established AP protocols. To begin with, you can automatically input data as invoices are prepared making it easier to ensure the accuracy of the invoice itself. Furthermore, you can use automated software to set parameters for each invoice that will automatically pay certain approved invoices out and flag invoices that don’t match your criteria so they can be checked out manually by your AP department. This cuts back on duplicate invoices and helps your organization reveal any potentially fraudulent transactions while also safeguarding the integrity of your invoicing process. E-invoicing gives your suppliers plenty of options as well they decide to adopt it for any of their PO’s and invoices. And on top of all of the other amazing benefits of automating things with the cloud, many of these services have built in compliance protocols that let you remain compliant and avoid breaking any tax related rules.

Look For Early Payment Discount Opportunities

One of the best parts about paying out invoices early is that some vendors may offer you a discount for doing so! An early payment discount is a great incentive for paying invoices early. If you work out an arrangement to pay an invoice early with a vendor (typically a lengthy time before the due date), they may offer you a discount for doing so. If you’re regularly doing this, you can reap the benefits of early payment discounts often. An early payment discount is usually calculated as a percentage of the cost of goods or services. If you’re using a software suite or automation in your AP department, you can have it search for these opportunities and track invoice payment times to help you find these types of opportunities across all your suppliers.