Accounts Department holds a key position in an organization, maintaining every day and yearly accounts. This department is also responsible for managing the profitability of an organization. Without this department, all other departments cannot function properly as cash flows through it.
The accounts department manages the credit due to an organization when it procures goods or services from various suppliers. This liability due to an organization is known as accounts payable. Accounts payable creates an obligation on the part of an organization that hampers its credibility in an industry.
Accounts payable process involves invoice data capture, coding invoices with correct account and cost center, approving invoices, matching invoices to purchase orders, and posting for payments. The accounts department in most organizations is responsible for the Accounts payable process.
Most organization’s Accounts department faces a lot of challenges in making the accounts payable process streamlined. Errors in manual data entry, checking the amount, matching invoices with the purchase order, authorizing people and cross-checking items entered in the invoice, and duplicate entries are some of the challenges in making payments to vendors. Paper invoices and handling files amplifies the bottleneck of the accounts payable process.
Due to all these inefficiencies in the accounts payable process, the overhead cost gets increased to remove them. To overcome these challenges and bottlenecks in the accounts payable process, adopting automation becomes a necessary weapon.
Automation not only speeds up the AP process but also streamlines the process.
The five key benefits of automating the accounts payable process are:
- 1. Reduces cost of processing:
Automating reduces the manual cost of data entry of invoices and maintaining files that increases storage cost. By using OCR technology, scanning and processing time gets reduced leading to digitized data entry.
- Error Reduction:
The errors in checking invoices get reduced by implementing automation. Duplicate invoices and checking invoices with PO gets digitized and data gets entered correctly. This helps organizations in making the process faster to make payments.
- Improves vendor relations:
Manual checking of invoices always leads to a slowdown of the AP process. Using OCR and AI improves the time taken to pay and hassle-free workflow. This creates goodwill for the organization and improved vendor relations are vital for success in an industry.
- More control and Transparency:
The manual process also sometimes creates unauthorized purchases made by employees. This creates chaos in organizations and the ordering of duplicate items. Automating the process makes a streamlined workflow that authorizes only some people to make payments. This gives control and transparency over the AP process.
- Improved profitability:
The manual accounts payable process involves greater costs and more time. Automation of the AP process leads to reduced cost as less paperwork is involved, and time gets reduced. Information required to take a decision gets disseminated faster leading, to a more speedy process. Overall efficiency and productivity are enhanced, improving profitability.
Star software offers two automation products to improve the inefficiency in the accounts payable process. One is Star AP 180 automation that speeds up the invoice processing, and Star AP 360 automation which offers the dual benefit of speedy invoice processing to faster payments to vendors error-free.
Check out the automation section on our website to know more about how our products help in improving the profitability of your organization.