Accounts Payable on Cloud
Accounts payable (AP) is the total amount a business owes its clients against the invoices received. It appears as the company’s liabilities on its balance sheet. The accounts team needs to ensure that the dues are paid on time as per the agreement. If the payments are not paid on time, it leads to defaults, loss of trust among the parties, and possible litigations. The basic functions of an AP system go beyond paying the vendors and includes a range of tasks and payments, such as:
Business travel expenses:These include payments to travel agents for hotel and transportation as well as any other bookings related to business travel. After the trip is complete, the AP system settles the funds spent and provides reimbursements.
Vendor payments:These involve maintaining and updating vendor information in the system and clearing the invoices as per agreed timelines. Vendors include raw materials suppliers for manufacturing industries, transport companies, security services, office supplies, electrical and plumbing maintenance, etc.
Licenses and leases:These include recurring bills for licenses related to the company’s products and services and leases for the property or the equipment.
Internal payments:Companies provide petty cash to their employees for business expenses. These fall under internal payments and needs to be settled within the AP system.
Whether it is manual or automated, businesses typically follow these steps in their AP processes:
- Receive the bill.
- Review and authorise the bills.
- Update records in the system.
- Pay on time.
Problems with legacy AP management
Companies want to maintain their liabilities to a minimum at all times so that there is more working capital available for day-to-day operations. Because companies still maintain their accounts payable records on paper or in legacy software, with time, this results in cumulative invoicing and payment errors causing compliance risks, late payments to suppliers and employees causing conflicts, and high processing costs. As a result of these problems, businesses are realising the potential of strategic systems for automated AP processes and data-driven insights.
The benefits of Accounts Payable on cloud
AP on cloud (APOC) is a fully automated procure-to-pay technology with the following benefits:
- Artificial intelligence (AI) and machine learning (ML) technologies simplify the process and provide deep insights into the AP processes for strategic business decisions.
- APOC frees up your human resources and engages them in other important tasks that require human intervention.
- APOC provides real-time insights into working capital and AP data for better decision-making.
- Suppliers can directly collaborate with the business using a secure online portal. This reduces manual follow-ups and status updates for invoices.
- APOC accesses intuitive analytics dashboards with all AP-related KPIs and SLAs.
- Cloud infrastructure lets you access the system from any device and location using the internet.
- APOC uses optical character recognition (OCR) and extraction technologies to auto-read paper invoices.