Top Reasons Why You Need Automation in Your Accounting Department

    In the last decade, the concept of accounts payable automation has become muddled as a variety of software providers have attempted to enter the game.

    It's easy to tell right away that the concepts are getting lost - look at the definition offered by online encyclopedia Wikipedia:

    Accounts payable automation or AP automation is a term used to describe the ongoing effort of many companies to streamline the business process of their accounts payable departments. The accounts payable department's main responsibility is to process and review transactions between the company and its suppliers. In other words, it is the accounts payable department's job to make sure all outstanding invoices from their suppliers are approved, processed, and paid. Processing an invoice includes recording important data from the invoice and inputting it into the company’s financial, or bookkeeping, system. After this is accomplished, the invoices must go through the company’s respective business process in order to be paid.

    After looking at this description, it's clear where the focus lies: processing. So we can start with our reasons and our clarifying quest there.

    Improve Invoice Processing Without Adding Resources

    The clearest and often most easily seen reason for why to implement AP Automation is to improve the processing of invoices, both in quantity and quality.

    Processing more invoices in less time, and processing them with a higher degree of accuracy is of clear importance to a controller or CFO.

    These are also easily measured metrics, that help guides the improvement efforts in accounting and can help determine if the automation is actually improving the department.

    Looking past the actual processing though, what about the payment? What about how how the process closed out and becomes finished?

    The Biggest Benefits are in Total Streamlining

    These things need to be taken into consideration - for example, automating invoicing might help the problem, but it doesn't create accountability and strategic improvement throughout the entire Accounts Payable department.

    Why would you avoid something that consists of a total solution? Cost?

    Stop thinking about cost, and worry about return-on-investment. If in 6 months the solution has already paid itself thanks to saved labor hours, better time spent on other value adding tasks, and increased likelihood of receiving discounts for paying early or on-time - why worry about the up front cost?

    The ROI for a software in an accounting department can also only truly be achieved if implemented strategically across an entire process - speeding up invoice processing does no good without accurate and prompt payment and approval throughout the accounting department.

    Subscribe to Our Blog

    Related posts

    7 Advantages of Using Electronic Forms
    5 Ways to Improve Your Workplace in the New Year
    The Future of Banking and Credit Unions: Enhancing Member Services with Self-Service Portals, Automated Filing, and Data Sync
    3 Must-Have Traits for Accounting Firms of the Future
        

     

    Comments