Accounts Payable Automation Right for Your Small Business?

Effective accounts payable management is essential to success in small businesses, where every day brings new challenges and tight deadlines. As an active business, handling vendor payments, employee reimbursements, and other transactions becomes complicated. This is where accounts payable automation can make a significant difference. This article will explore how this technology can benefit small construction companies.

Successful companies do this proactively, streamlining their business processes, implementing innovations that increase efficiency, and improving resource management. According to a 2018 study conducted by McKinsey, 57% of financial activities can be fully automated.

We'll take an in-depth look at the many benefits that accounting automation offers small businesses.

What Is Accounts Payable Automation?

The automation of accounts payable is an initiative to optimize this process. When carried out, this automation increases the efficiency of the CP process, frees up team time, and benefits the company in several ways.

Implementing this automation in your small business is just one step in a more extensive process. First, you need to map out and understand your current accounts payable process. Only then will it be possible to identify the best automation opportunities, implement them, and measure the performance of the automated process.

How Does Accounts Payable Automation Work?

If there’s one process that can benefit from automation, it’s accounts payable. Accounts payable automation systems can dramatically speed up workflow and help reduce the occurrence of significant issues. Automating the accounts payable process results in a simpler and faster cycle:

• An employee submits invoices to an invoicing platform built with accounts payable automation software. Since invoices are submitted using a standardized form, there is no risk of missing information that could delay the process.
• Data processing, approval, and checking occur within the platform.
• The account payable team automatically sends payment to the supplier.

Automation not only increases efficiency but significantly reduces the risk of errors. If they occur, you’re notified and can resolve them faster so payments still meet due dates.

Benefits of Accounts Payable Automation for Small Business

Accounts payable automation software simplifies the entire CP cycle, minimizes errors, and brings many other benefits to companies. If you have questions like “What are the Benefits of Accounts Payable Automation?” The answer is:

• 67% mentioned that process automation improved accuracy and/or reduced errors
• 64% mentioned that automation increased employee productivity

Both statements are factual. Now, let's consider how you can benefit from automating the flow of your accounts payable.

Streamlining The Invoice Process

Often, employees in financial departments waste time researching details about payments, cross-referencing information stored in a disconnected manner, or working with incompatible systems. Automation bypasses unnecessary steps, facilitates data entry, standardizes routine tasks through software, and allows employees to focus on carrying out strategic activities rather than repetitive ones.

When employees can create a purchase order, process a payment, or resolve a problem with just a few shortcut keys, companies save time and reduce the experience required to handle typical payment-handling duties. Automation also helps businesses work more efficiently. After all, the time saved by automating repetitive manual tasks frees staff to focus on more value-adding work.

Optimizing Invoice Processing And Management

Paper invoices are a thing of the past. Today, the most efficient teams work with electronic invoicing. Small business automation software makes storing, finding, and sharing invoices easy. You can also automate the screening phase, creating rules and configuring responsibilities based on the type, quantity, or department that requested the purchase.

The software also allows you to request approval of invoices automatically, send messages to approvers when their action is necessary, and notify service providers, suppliers, or employees after approval. This way, you speed up this chain of actions and improve your team’s productivity.

Elimination Of Costly Errors

Automating your accounts payable process brings accuracy to your financial reporting that manual processes can’t achieve. By automating data entry and request approval, you’ll see fewer errors caused by human error and fewer processing costs.

With this, you will find that duplicate payments and erroneous entries appear much less frequently. This reduces the risk of fines or double payments. As a result, automation software helps you reduce costs and monitor bottlenecks in your CP department.

Improved Collaboration

Centralized automation facilitates collaboration by keeping track of teams' tasks and progress in one place. This allows managers to easily track company projects, prioritize activities, and streamline collaboration.

This centralization also helps eliminate duplicate assignments and opens up new opportunities. For example, it is much easier to identify possible partnerships between employees who work on complementary tasks.

End Of Expired Deadlines

With automated accounts payable, missed deadlines are no longer a problem. You can set up automatic notifications about upcoming deadlines and priority assignments. Thus, obstacles of this type practically disappear. This also benefits relationships with suppliers and other partners. Your small business builds trust with these other parties by providing fast and efficient service with an automated accounts payable system.

Fraud Protection

Unfortunately, fraud is still a very common problem in accounts payable. In many cases, it happens because of employee mistakes.? Automation helps with this by reducing human touchpoints, adding visibility, increasing centralization, and enhancing security. Combined with employee safety training, automation significantly reduces the risk of your company encountering this issue.?

Know about the Most Popular Accounts Payable Software for Small Businesses

Good accounting software for small and medium-sized businesses should combine professional invoicing, simplicity, and a straightforward interface. Fortunately, inexpensive options on the market provide the features you want. One of the best software for small businesses is- QuickBooks. This is particularly suitable for SMEs, VSEs, and the self-employed. Quickbooks automates accounting, commercial, and administrative tasks, including invoicing, unpaid bills, expenses, VAT, reconciliations, and bookkeeping.

With its help, data entry can be automated to reduce the risk of errors and transaction reconciliations performed on an ongoing basis. QuickBooks also provides detailed accounting reports and tools for forecasting cash flow.

Following these tips, you can successfully choose and implement an accounting automation solution that meets your small business's needs.

FAQs

• Why Turn To Accounting Automation For Smes?

With account payable automation, the risk of errors is considerably reduced. No need to spend hours tracking them down in your account lines.

• What Is The Benefit Of Automating The Procurement Workflow?

Workflow automation emerged to address the need to simplify operations and improve decision-making. Automation increases efficiency, reduces errors, and frees human resources for more strategic tasks.

• How To Manage Small Business Accounting?

1. Use a CRM as per your needs.
2. Take care of your quotes and invoices.
3. Choose a payment term.
4. Follow a strict schedule.
5. Have an account dedicated to your activity.
6. Seek advice from an accountant.

• What Are The 3 Types Of Accounting?

The different types of accounting

1. General accounting or financial accounting
2. Analytical accounting or management accounting
3. Cash accounting
4. Accrual accounting