Accounts payable is the financial engine that keeps a company running. The team is responsible for producing and maintaining an accurate balance sheet: a crucial function upon which any truly successful business is built.
Yet, all too often, hardworking AP professionals are only thrust into the spotlight when there’s a problem. And for the teams that still rely on manual processes, there are a lot of potential minefields to navigate, including common mistakes like:
- Omission errors
- Duplication errors
- Incorrect data classification
- Entry reversal errors
- Transposition errors
- Compensating errors
Any one of these data entry errors can lead to late payments, disgruntled vendors and a frustrated boss. But when you’ve been squinting at a spreadsheet for five hours, who can blame you? The tedium of manual data entry is, by nature, highly prone to errors–and costly ones, at that.
According to Accounting Today, “dysfunctional and manual financial reporting processes are expected to cost U.S. businesses $7.8 billion this year.” That kind of financial hit will put even the sharpest AP team into the “problem child” box. Notably, this information was based on a 2022 report about teams that spent a minimum of two hours on manual work every week.
But what if you could ditch the manual processes that cause the most mistakes in the first place? Automating AP takes human error out of the equation while freeing you up to focus on higher-value tasks that can directly benefit the company. As a result, you'll find yourself in the spotlight for all the right reasons, recognized as the true champion of your finance team.
Shifting to a Strategic Mindset
What if you didn’t have to dig through filing cabinets and email threads, chase down approvals, or cut paper checks? In addition to dramatically speeding up the payment processing timeline, automating AP frees you up to focus on more critical matters that can directly impact your company, such as negotiating vendor discounts.
Save Your Company Money
Escaping the manual grind frees up your bandwidth and brain power to focus on high-value initiatives like saving your company money. In addition to eliminating late-payment fees, you’ll be better positioned to capitalize on incentives like early-pay discounts and volume rebates.
With complete visibility into the payment process, you’ll also be able to analyze and evaluate spending trends. This makes it much easier to pinpoint areas where you can save the company money, like savings from consolidating vendors or negotiating discounts. These types of money-saving initiatives are guaranteed to get you the kind of attention you deserve — and help you build a case for a promotion.
Ensure Compliance
We all know what a headache compliance can be, especially when your company gets dinged with a nightmarish audit that can cost your team time, money and plenty of sleepless nights. But automating AP dramatically reduces the anxiety that surrounds maintaining your company's compliance and audit readiness.
Automation helps you eliminate data entry errors, provides transparency into the full lifecycle of every payment, and puts the data you need at your fingertips. The best platforms have built-in document management functionality that allows internal teams or auditors to find all payment-related documents, from invoices to POs and material receipts, with a few simple clicks. This provides easy access to the entire paper trail of a payment without the hassle of consolidating records housed across multiple locations.
Leading AP automation software also gives you the option of cloud hosting your data, which ensures that the latest compliance rules and regulations are applied automatically. This allows you to maintain compliance without having to manually stay up-to-date with the latest rules and regulations.
Prevent Fraud
Identifying fraud risks is a lot easier with the visibility that AP automation software provides. Sophisticated platforms use tools like optical character recognition (OCR) for data capture and automated matching in order to flag exception items such as mismatched line items. This alerts AP teams to anything out of the ordinary, including fraud.
For example, if a vendor is sending more invoices than usual in any given month, this activity will be flagged for review. AP teams can then investigate for fraudulent activity like kickback schemes and invoice fraud. These tools allow you to be proactive rather than reactive when potential issues arise.
Improve Supplier Relationships
Strained relationships with your vendors can have a snowball effect that impacts everything from cash flow to your company’s reputation in the marketplace. AP automation solutions help you provide consistency, flexibility and transparency that can bolster these all-important relationships.
And while some vendors are still wary of digitization, the kind of time and attention you’ll have to give to the relationship make it much easier to build and maintain trust. Communication can bridge any gap of uncertainty, and vendors will appreciate the timely payments and improved visibility that automation provides.
When you adopt a strategic mindset, you can tackle these kinds of high-value (and highly visible) initiatives that will get you noticed, and help your organization grow and compete.
AP Champions in Action
It’s one thing to talk about how accounting automation can free you up to focus on efforts that directly impact your company, and another to see those efforts in action.
Truck Country Eliminates Paper
In the case of Truck Country, a commercial truck sales and maintenance operation with 24 locations in nine states, manual paper processes were weighing down the AP department and hindering the company’s growth.
Beyond the grind of mailing invoices, parts order forms, and service documents to headquarters every week, this manual process was costing the company a small fortune in shipping costs. Implementing DocuPhase’s document management system eliminated hundreds of thousands of paper documents and gave the AP team instant access to files through an easy-to-search repository.
Truck Country also digitized their accounting processes to streamline invoicing workflows from end-to-end. Not only did these changes shine a spotlight on the AP team for saving the company nearly $25,000 in annual shipping costs, the increased efficiency gave the team more time to support the company’s growth.
Specifically, the AP team was freed up to focus on the company’s mission critical expansion efforts. Thanks to the AP department’s high profile efforts, Truck Country was able to add four new locations — without adding headcount to their team.
JetBlue Captures Millions in Discounts
As the sixth largest airline in North America, Jet Blue’s AP department was faced with the challenges of volume and complexity. With more than 51,000 invoices, 4,000 approvers and 10,000 suppliers to coordinate every month, the AP team’s workload was no joke.
Enter AP automation, and the seamless efficiency of straight-through touchless processing. With automation in place, nearly 90% of invoices were processed automatically without any manual intervention. Needless to say, the AP department found the time and bandwidth to focus on more strategic initiatives for the first time.
One of these initiatives paid off in a particularly big way. Jet Blue’s AP team partnered with DocuPhase to customize a dynamic discount program in which eligible suppliers who offered early payment discounts transitioned to a more flexible model.
Rather than being limited to a fixed timeframe, where a discount was applied if the invoice was paid 30 days early (no less), the dynamic model featured a scaled, rolling discount based on the number of days the payment was made in advance of the due date.
Vendors benefited from getting paid sooner, while JetBlue was able to secure more savings. Jet Blue’s AP team was responsible for capturing a whopping $3M in savings ($2M more than their initial goal). That’s one way to get the CFO’s attention!
Advocate for AP Automation
The truth is, automating accounts payable empowers you to make meaningful contributions that can significantly boost the trajectory of your career, along with your company’s bottom line. Think of it as your secret weapon to finally getting the kind of positive attention and accolades you deserve.
Are you ready to build a case for AP automation in your organization? We’re here to help. Download this workbook and answer some questions that will serve as the foundation for a case for AP automation that you can take to the decision makers in your organization. Then start thinking about where you want to go with your career.
