The AP handbook: A guide to accounts payable automation
Ask any F&A leader and they will tell you that accounts payable (AP) is at the core of their day-to-day functions. It is a no-brainer that the various vulnerabilities attached to manual or paper-based processes and the fact that AP is more than just ‘paying the bills’ demand a digital-first approach to the function.*
There is constant pressure on the AP function to ensure that overheads are reduced and that the process becomes more efficient to tackle payment issues and delays. Problems related to payment errors, security breaches, low cash flow visibility, and valuable human resources dedicated to redundant processes have further highlighted the importance of automation in this space.
AP automation is no longer considered a luxury that only industry leaders could afford in the recent past. Today, AP function is in demand across all scales and sizes of businesses. Here’s discussing what AP automation is as well as its key benefits and how you can choose the right solution (or a partner) to take care of end-to-end AP automation.
What is accounts payable automation?
For the uninitiated, AP automation refers to using specialised software solutions to automate routine, repetitive, and non-essential invoicing tasks (receiving, processing, approving, and matching supplier invoices). It further integrates AP with your enterprise systems to deliver a partially touch-free, paper-free, and error-free process.
Five key benefits of AP automation
Invoice processing and vendor payments are integral aspects that every business needs to improve, and automating the AP function is a step in the right direction. Today’s digital-driven business landscape has underlined the importance of automation in general, and AP automation has brought about a transformation in the way invoices are processed, payments are handled, volumes are managed, and stakeholders are involved.
- Elimination of manual-intensive tasks
- Reduced error rates
- Streamlining the invoice approval process
- Improved security
- Real-time tracking of cashflow
Automation at its core takes time-consuming, manual-intensive tasks and concludes them at a faster pace, thereby increasing efficiency. When it comes to AP, processing invoices and getting approvals is generally a sluggish process when done manually. However, with a streamlined and accurate process, a major chunk of invoices go straight from capture to payment. According to Infosys BPM, automation opportunities in the AP process have resulted in 45% improvement in efficiency.
Manual entries are susceptible to errors, and errors can be quite costly to your business (in terms of both money and reputation). AP automation eliminates the need for human intervention, capturing data from electronic invoices and thus drastically reducing any possibility of errors.
With AP automation, it is easy to set up a workflow to match invoices to purchase orders, send them to the right approvers, and automate the process without the need for paper-based records.
Fraud prevention, dispute settlement, and compliance become easier with automation since each step in the process is securely recorded for review.
Creating spreadsheets, graphs, and charts manually to understand spending patterns and foreseeing cash flow problems is labour- and time-intensive. AP automation allows you to track cash flow in real time and make better decisions by predicting or pre-empting cashflow-related bottlenecks.
Levels of AP automation
Depending on your organisation’s objectives and AP process maturity, you can choose a level of (or approach towards) automation. While there are certain limitations in the first couple of levels, they may work perfectly well for businesses looking to automate and digitise some part of their AP process:
- Front-end invoice capture:
- Front-end invoice capture + workflow routing:
- Front-end invoice capture + workflow routing + ERP integration:
- Front-end invoice capture + workflow routing + purchase order matching + ERP integration:
Converting paper invoices into digital files.
Using a workflow tool to enable efficient invoice routing and approvals.
Using a mix of these technologies to eliminate paper-based manual invoice entries.
How Infosys BPM can help with AP automation?
The Infosys BPM Accounts Payable on Cloud (APOC) platform has been designed from our rich experience of providing AP services to 75+ clients worldwide and handling over 22 million invoices annually, as well as combining the best-in-class technologies and AI/ML.
Experience increased control, 360-degree visibility, and a unified AP process with our offerings and Infosys Live Enterprise - a scaffolding designed to help you become a truly digital and sentient organisation. Learn more.
*For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.