Exploring the Present State of Accounts Payable Automation
Automating accounts payable processes can significantly boost efficiency. A recent report by our partner, Yooz , found that companies using automated systems can process invoices up to 27 hours faster.
This increased speed is just one benefit of embracing automation. Businesses are increasingly turning to technology to streamline operations and improve productivity. However, many companies are still in the early stages of this digital transformation.
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Key components of modern accounts payable automation systems
Modern accounts payable (AP) automation systems incorporate several key components capable of streamlining operations, reducing errors, and improving efficiency. These systems have transformed how businesses manage their financial processes.
Invoice capture and data extraction?
A key component of AP automation is the ability to capture and extract data from invoices . This involves converting paper or digital invoices into usable electronic formats. Advanced systems use optical character recognition (OCR) technology (or text recognition) to extract data from the invoice, such as invoice number, date, vendor details, and amounts. This eliminates the time-consuming and error-prone process of manual data entry.
Modern AP automation solutions typically have built-in OCR technology. They can handle various invoice formats, from emails and faxes to physical documents. By adapting to different invoice layouts and styles, these systems ensure efficient processing, regardless of the source.
Workflow automation?
Workflow automation streamlines business processes by creating automated steps for tasks like invoice routing, approvals, and payments. These pre-built workflows can be customised to fit specific needs.
To ensure smooth operations, a workflow engine should integrate seamlessly with your existing accounting and ERP systems. This integration guarantees accurate data transfer and efficient financial management. Built-in approval mechanisms notify the right people at the right time, accelerating the approval process.
By automating routine tasks, workflow automation frees up staff to focus on higher-value activities.
Read more: What to Look For in Workflow Automation Software ?
Payment processing and reconciliation?
Payment processing and reconciliation involve managing and matching payments with bank records. Automated systems can verify account balances, saving time and reducing errors. AP automation handles various payment types, syncing data between systems and flagging potential discrepancies or fraud.
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Accounts payable automation trends in 2024?
AI-driven insights and analytics?
Artificial intelligence (AI) and machine learning (ML) are transforming how businesses handle accounts payable. These technologies teach computers to learn from past data, which helps them automatically match invoices to purchase orders and spot unusual spending patterns.
By automating routine tasks, AI frees up AP teams to focus on more strategic work. Plus, AI can uncover valuable insights hidden in financial data. For example, it can predict cash flow issues or identify opportunities to negotiate better deals.
Integration with ERP systems?
Integrating AP automation with ERP systems can significantly boost efficiency, eliminating double data entry. This integration provides a single source of truth, ensuring financial information is accurate, up-to-date, and accessible to everyone across the organisation.
This unified approach has become a standard practice for many businesses seeking to optimise their AP processes.
Cybersecurity measures
Cybersecurity is a top priority as accounts payable automation progresses. Modern AP automation solutions have advanced encryption, multi-factor authentication, and continuous monitoring.
Additionally, integrating AI also provides an extra layer of protection4. The technology is capable of detecting and preventing fraud as well as suspicious activities like unusual payment requests.
This gives businesses ease of mind.
Regulatory landscape
AP teams must closely monitor AI-related regulations as automation advances. Companies should create internal guidelines for AI use in accounts payable management. Regulatory oversight is intensifying, and companies must adapt to new rules like Vietnam's Decree No. 52/2024/ND-CP on non-cash payments, effective July 1, 2024.
Read more: How to Implement e-Invoicing in 5 Steps Successfully ?
Predictions for the next decade
Having trouble managing your Accounts Payable? Learn how Yooz can elevate your concerns. Download our brochure and learn more in-depth about this comprehensive solution.