Table of Contents
- What is accounts payable?
- How does AP automation work?
- Why should I use AP automation?
- How can automated claims processing reduce errors?
- Why is AP automation software becoming more popular?
- What are the 10 advantages of automating accounts payable?
- What’s the best way to choose an accounts payable automation solution?
- What automated invoice processing software should you use?
- What accounts payable software can you use in your business?
- Which AP software company is the best fit for you?
- Frequently Asked Questions
For businesses of all sizes and industries, suppliers are an essential part of everyday operations. Without these suppliers or manufacturers, many companies would struggle to keep up with the demand for the products or services they offer to their customers.
It is therefore paramount that businesses show their vendors the respect and appreciation they deserve, making sure to pay them promptly and accurately every time. After all, these vendors are a crucial part of keeping your business running smoothly and sustainably.
As society continues to evolve and push toward electronic commerce, it has become more important than ever for businesses to use software solutions when dealing with their suppliers. These tools make it easier than ever to streamline payments, track transactions, and maintain records of goods and services.
By relying on modern tools and technologies in our increasingly digitized world, companies can ensure they are creating the best possible relationship with their valued suppliers. In this way, businesses can demonstrate their commitment to success by prioritizing key relationships like those with their suppliers through the adoption of cutting-edge solutions.
In today’s fast-paced business environment, companies need to be able to effectively manage their accounts payable (AP). This involves making sure all the necessary information is organized and stored accurately while being able to easily access that information when needed.
As a result, accounts payable automation software is now an essential tool for businesses looking to streamline their accounts payable processes and improve overall efficiency. This software uses robust algorithms and advanced technology to help companies quickly scan and digitize invoices, enabling faster data extraction and increased accuracy.
You can simplify your AP process and automate many manual processes that take a lot of time and can be prone to errors, such as manual data entry and traditional optical character recognition (OCR) solutions.
In addition, accounts payable automation software also incorporates many other features designed to streamline the accounts payable process, including automated invoice processing workflows and customizable approval chains.
Rather than relying on your AP team to manually transfer and record your important data — especially when most payments, invoices, and purchase orders are made electronically — it can be beneficial to use a software solution like Rossum. Providing unique computer vision technology to process thousands of invoices in minutes, Rossum helps you to reduce your accounting costs and increase productivity.
What is accounts payable?
Accounts payable, or AP, is a term used to describe a company’s obligation to pay off goods purchased on credit. The accounts payable department within a business is responsible for:
- Paying incoming invoices, subscriptions, and other business expenses
- Keeping supplier details on file
- Communicating with suppliers
- Processing invoices
- Handling invoice queries and disputes
Other tasks vary depending on the size of the company, but you might find that the accounts payable department handles internal payments (i.e., petty cash, receipt reimbursements, business travel expenses). Other important tasks might include end-of-month aging analysis reports for upper management and cost-saving strategies (i.e., early payment to receive discounts).
How does AP automation work?
Whether you’re new to accounts payable automation, or simply unsure of how to approach adopting an automation solution like many on the market today, one thing is clear: automation is definitely not something to fear.
There are many different services and software solutions in today’s society that offer automation, and these solutions come in all shapes and sizes. From accounts payable processing automation to invoice automation solutions, there are countless options available to businesses looking to streamline their processes and become more efficient.
How exactly does automating your accounts payable work?
An AP automation API (application program interface) helps you to more easily and efficiently process your accounts payable documents (i.e., invoices, payment receipts, purchase orders) by connecting two applications. This connection enables better communication with each other to more effectively help you view and manage your information.
The idea of automating your accounts payable system can be boiled down to using a solution that allows you to more quickly and accurately process your AP documents.
Traditional accounts payable processes include manual data entry and traditional OCR solutions, which can be very time-consuming and expensive — not to mention prone to errors. Because of this, many businesses find that using an automated system, especially ones that use advanced invoice OCR API technology, can be much more efficient in the long run.
These advanced systems are much faster to integrate and require less effort to operate. Vendors will usually have integrations with the common systems and offer services to integrate with them, so having an advanced system can also make your relationship with other vendors easier.
You can turn your AP team into a driving force in your growth and efficiency goals by reducing the overall cost of your AP processes. A solution like Rossum can help you achieve this by eliminating tiresome and inefficient tasks such as manual data entry.
Why should I use AP automation?
Rapidly advancing technology and innovative new software solutions can make it difficult for businesses to know which software solutions may be the most beneficial to their operations.
While many of these tools and platforms can have a significant impact on the efficiency and success of a company, they can also sometimes be expensive or complex to implement, making them seem like more trouble than they’re worth.
One such solution that is an excellent choice for businesses looking to optimize their accounts payable processes is AP automation. This technology uses cutting-edge software tools to manage key aspects of your accounts payable information, such as tracking payments made to vendors, maintaining strong supplier relationships, and more.
Providing numerous benefits for businesses, including increased efficiency and more accurate record keeping, AP automation should be a top consideration for any business looking to streamline its back-office operations.
Because of this, an automated AP system can turn your AP team into a driver of growth rather than the slow, expensive, and error-prone process that it may be right now.
Accounts payable solutions can come in many forms and offer different features. Overall, adopting and implementing a consistent and effective AP automation workflow can help your business:
- Reduce time to process your accounts payable information
- Improve the accuracy of the AP information
- Lower the overall cost of your AP process
- Automate manual tasks to enable focus on value-added tasks
- Better share important information throughout the organization
- Gather more actionable insights to keep improving your AP processes
AP automation can help save both time and money and increase your value generation, enabling you to share information with anyone who needs access to it — even if they aren’t a part of your team.
Additionally, AP automation can help you gain more actionable insights that can make it possible for your company to improve far easier and more effectively than a template-based or manual solution would give you.
Using an effective accounts payable solution can help you scale your AP process and optimize your operations. Rossum, for example, has proven to reduce manual data entry amounts by up to 90% and drastically cut the overall cost of accounting processes.
How can automated claims processing reduce errors?
To determine whether the tools and strategies you have are improving your accounts payable process, it’s crucial to understand the KPIs of AP efficiency. These are the quantitative metrics to making improvements and investments in the workflow:
- Cost per invoice
- Keystrokes per invoice
- Seconds per invoice
- Percentage of invoices needing rework
- Number of invoices per month FTE
- Minutes to rework each invoice
Automating your AP department, however, doesn’t mean you have to compromise quality. With an automated AP process, you can dramatically reduce:
- Errors in manual data entry errors
- Lost or late invoices
- Invoices without the right purchase order number
- Difficulty retrieving invoice information for reporting purposes
With a solution like Rossum, you can avoid these time-consuming errors, ensure fast and accurate invoice data capturing, and reduce your overall AP processing time and costs.
Why is AP automation software becoming more popular?
When it comes to adopting an AP automation solution for your business, the range of options can feel quite intimidating. After all, there is such a diverse selection of software solutions available, from accounts payable software for small business to those that cater to larger companies or businesses in the middle market.
But rather than view this variety as an unbeatable challenge, you can look at it as a positive thing. After all, with so many options available, it means you have the ability to choose a solution that meets the unique needs and requirements of your business.
When choosing an AP automation solution, focus on the features and tools that will best support and benefit your business. This may involve doing some research into different solutions and exploring how they can meet your specific needs in terms of efficiency, speed, accuracy, and so on.
Ultimately, adopting an AP automation solution should be a collaborative process between you and your team – one that ensures your company gets the most out of this valuable investment.
What are the 10 advantages of automating accounts payable?
AP automation has many benefits for businesses. Below is a list of 10 of the top advantages to use professional software rather than a manual approach to invoice payment.
1) Time and cost savings
AP automation doesn’t cost as much as you might think, and certainly not compared to the savings you can make. It costs far less to implement accounts automation software than it does to hire more employees to keep up with manual data entry as you scale.
You can reduce the total cost of ownership (TCO) when processing your invoices after introducing professional software. You can even start saving within hours or days of implementing this software.
Another way to save is by reducing or even eliminating the risk of late payment fees and interest. And you can take advantage of early payment discounts from your suppliers. Automated processing keeps you on schedule without even needing to think about deadlines.
2) Increase your reputation
You should be aware of qualitative measures, such as the complexity of your process and the relationship between you and your vendors. Many smaller suppliers and vendors have actually been bankrupted by corporate clients failing to remember to pay invoices due to them.
If you’re known for paying early or on time, you’ll have an excellent relationship with your suppliers. This gives your suppliers peace of mind and also allows you to have uninterrupted supplies to keep your business running smoothly.
Some suppliers may also extend a larger line of credit to you, allowing you to take advantage of sales and special offers. If an unexpected occurrence arises, such as a larger order than expected, you will still be able to get what you need from your suppliers on time. An excellent reputation may also allow you to take advantage of staggered payments.
3) Do more with less
The right software can reduce your invoice processing time by more than a quarter, sometimes even by more than that. If your invoices are processed faster and more efficiently, you have vital data available to you sooner. You can look at cash flow and other important financial information, and your staff can spend time on more value-added tasks.
While it’s never nice to think about, if you do need to make any staff reductions for any reason, your automated AP software can help you smoothly continue to process your invoices.
4) Increased accuracy
With the best will in the world, no human can be 100% accurate with data entry. It’s simply not possible. However, with Rossum’s AI-powered engine, your invoice processing will be very accurate. You will also get increasingly more accurate data as the system learns.
The system can also help retrieve vital invoice data for reports and tracking KPIs. You can prevent lost paper invoices, forgotten invoices, paying late, and incorrect data entry.
5) Free up your employees for other things
Far from dreading AI or worrying about it, employees are keen to embrace, reduce, or eliminate repetitive tasks. Over 50% of workers believe that automation tools would save more than five hours a week of work time.
Your accounts payable team would no doubt be delighted to have those five hours each week to work on jobs that really move the needle. Rather than rote tasks that can be automated, you team can focus on fraud prevention, process improvement, spend management, and more.
6) Better information sharing and insights
When all your invoicing data is stored securely in the cloud, there’s no need to spend time looking through files or trying to find digital copies. Everything you need is right at your fingertips.
With the Rossum Usage Reporting Dashboard, you can track every aspect of your business’s automation usage and performance. With this in mind, company leaders can more easily view what processes can be improved to set and meet business goals.
This isn’t just convenient for the accounts payable teams, but it also means that other departments can quickly gain access to the data they need, too.
- Finance can quickly get a complete picture of the business and audit reports
- Customer service can look up information to process refunds
- Leadership can quickly run reports and provide information to board members and stakeholders
- Any department can have access to their numbers to help plan budgets
As well as quick access to data, there are far better insights available into how your company is doing. You don’t have to manually add countless paper invoices. Just open up your software and get any data needed for exceptionally clear and valuable analytics.
It’s impossible to scale efficiently with paper files and manual processes. Invoicing automation can replace paper filing systems and huge storage rooms full of filing cabinets. Cloud-based software can grow with you no matter how far your business expands in the future.
8) Integrates with your existing systems
The best AP automation software can be easily integrated into your favorite system. Whether you would prefer a pre-built integration ready to plug and play or a custom-built integration, the flexibility of Rossum’s software can match your unique needs. The Rossum system can be quickly migrated seamlessly into your existing workflows and legacy systems.
9) Environmentally friendly
You no longer need to use paper, printer ink, or cartridges. Not only is this more cost-effective for your business, but it’s also better for the environment. Paper production adds to deforestation, among other problems, and it’s far better to ditch it in place of easy access to everything in the Cloud.
With the advancement of technology, new security issues have arisen. Outdated AP processes can be exploited by bad actors. For example, the tech giants Google and Facebook were duped into forking well over $100 million over a two-year period to con artists who emailed them fake invoices.
Rossum’s cloud-based system is highly secure and can go above and beyond what an IT department might have implemented for a company server. With continuous patches and updates while regularly backing up your data, you can rest assured your data is fully protected.
AP software can provide you with a range of options for processing your invoices. You don’t have to worry about security or fraud. The Rossum system ensures every invoice is efficiently processed and paid on time.
With Rossum, you can streamline your AP processing and receive highly accurate data to provide you with top-quality analysis. AP automation software is the gold standard for accounts payable.
What’s the best way to choose an accounts payable automation solution?
When looking for new accounts automation software, the first step is to analyze your current processes and identify any areas where you need improvement.
Maybe your current software is not handling things as efficiently as it could, resulting in gaps in service or operational inefficiencies. Or perhaps your new software needs to integrate more smoothly with your existing systems and legacy software in order to ensure a smooth transition.
Once you have a clear picture of what you need from your new accounts automation software, the next step is looking for the right features for your team. This includes considering things like ease of use, fast setup, and quick onboarding so that your team can get up and running with the new system right away.
Make sure you also find a solution that can integrate quickly and seamlessly with your existing technology to keep stakeholders happy. Plug-and-play solutions (also called out-of-the-box) are the best for the least amount of workflow downtime.
One of the best ways to compare the different offerings is to look at the AP automation software Gartner report. This comprehensive report describes many of the reasons why businesses are embracing automation solutions and what their recommendations are when it comes to the various products on the market.
What automated invoice processing software should you use?
Most invoices issued around the world are still currently manually processed. This means when invoices arrive at an organization, whether they are in paper or PDF format, they are then handed off to AP team members. These team members then manually capture the data within the invoices in a process called manual data capture.
Manual data capture process:
- Each data point is typed by hand from the invoice into a spreadsheet or other application.
- The data is then often manually matched with the purchase order and any other documents before it is emailed to the appropriate employees for approval and payment, such as 3-way matching in accounts payable.
- The invoices are then filed away on a hard drive or stored in a filing cabinet.
At any point throughout this process, invoices can be and often are misread or lost, creating further issues for the entire workflow. When reports are required as a result of an audit or other financial process, tracking down these invoices on random hard drives or filing cabinets can be a nightmare.
The best automated invoice processing software solves all of these issues within one convenient platform. These software solutions not only facilitate rapid data capture for hundreds of invoices with a few clicks, but they can also make organizing and locating invoices far easier.
Many excellent invoice approval software tools are cloud-based, allowing employees to access them from anywhere and at any time. You no longer have to wait to approve an invoice because a team member is out of the office. Approval can be done remotely through an invoice management app.
Automation software can help you achieve the crucial goals that many AP departments share:
- Improved processing time
- Efficiency managing large invoice volumes
- Cost reduction
- Collecting early payment discounts
- Improving supplier relationships
What accounts payable software can you use in your business?
Many AP automation companies developed solutions using template-based OCR in the early days of computer-aided data entry. It works by scanning documents and then comparing their visual appearance to a template manually created by OCR experts.
Using this template, the computer knows where to look for data and what kind of data to expect during extraction. This all sounds good but has some significant drawbacks. For example, accuracy is limited to only documents that precisely fit the template and do not contain any blurry or fuzzy text.
Template-based OCR is also expensive to maintain and requires programming experts to create new models for each variation of the document. Generally, this kind of solution may work well for an organization like the IRS, which processes thousands of documents that all have exactly the same type and format. However, for most businesses, a different kind of tool is needed.
The second category is cognitive AI-powered OCR. Instead of relying on manually-created templates to analyze invoices, cognitive data capture uses deep neural networks to automatically recognize patterns across a wide range of documents. This type of invoice processing solution is more versatile and accurate than template-based OCR.
Plus, system maintenance is more affordable. A vendor invoice management system like this uses AI to “read” documents much as a human would. This means that it can even recognize handwritten data. For these reasons and more, it is safe to say that cognitive OCR is one of the landmark features of the best AP automation software.
What’s the most useful accounts payable software for large businesses?
One of the key requirements of AP for larger enterprises is volume. Sizeable organizations have to manage many invoices and other documentation associated with the AP process. This requires a large team of employees to manually process.
There is a good chance that small errors can creep into the process and be replicated across thousands of invoices, thereby magnifying those issues into major problems for your enterprise. That’s when you need accounts payable software that can serve large businesses.
These applications have been specifically designed to suit the needs of global enterprises. One of the core features of accounts payable automation software for larger businesses is batch processing.
Instead of processing invoices one at a time, the best AP automation software enables you to import hundreds or even thousands of invoices at once and then process them all with a few clicks.
Rossum is one great example of accounts payable software for banks or any other organization with accounts payable and accounts receivable processes. A cognitive data capture solution that also features batch processing, Rossum enables you to dramatically reduce the time it takes to process each invoice.
Which AP software company is the best fit for you?
There are many review sites and online sources for comparing AP software companies. Not all of these solutions are created equal, so it’s crucial to learn more about the accounts payable solution providers you are considering. Doing your own research when it comes to accounts payable approval software is critical.
Rossum is a provider that offers a number of eBooks and reports statistically demonstrating the validity of the benefits of our software solution. With Rossum, you can extract data from invoices and automatically export that data into another more useful format, such as a spreadsheet.
Rossum is also one of the few AP software companies to provide a straightforward, comprehensive API that makes it easy for your developers to build custom solutions to suit the needs of your business.
Frequently Asked Questions
Who uses AP automation software?
For companies that rely on a manual invoice processing system, AP automation software is an essential tool. Such software streamlines the process, reducing errors and saving time and money in the long run. AP automation software offers automated workflows to handle every step of invoice processing, from data capture to categorization and approval.
Additionally, since AP automation software uses advanced algorithms to identify discrepancies and irregularities in a company’s invoices, businesses can benefit from improved accuracy in their accounts payable.
Overall, AP automation software gives companies a competitive edge by helping them to improve efficiency and reduce costs in their AP processes. So if you’re still using a manual invoice process today, it’s time to explore AP automation software as the next step toward streamlined AP management.
How do I know it’s time to update AP software?
If you are drowning in paper invoices and your team has no time to do any of the other vital tasks they should be doing, it’s time to give AP software a look. A cloud-based system can help to streamline manual data entry and analysis processes, freeing up your staff to focus on the important work that needs to be done.
With an automated system, you can eliminate tedious manual tasks like keying in invoice information and analyzing spending patterns, allowing your team to focus on higher-level activities like workplace strategy and planning. Ultimately, implementing AP software is a smart choice for any business looking to maximize efficiency and minimize time wasted on manual tasks.
What is the accounts payable process?
The accounts payable process is an essential component of any business. This process begins when an invoice is received in the accounts payable system. The invoice is then captured and reviewed to ensure that all relevant information is accurately recorded.
In order to move forward with the accounts payable process, the invoice must be matched to a corresponding purchase order if one exists. Once this step has been completed successfully, the invoice can be approved and coded according to its assigned department for payment purposes.
Throughout every stage of this critical process, careful attention must be paid to detail in order to avoid any errors or missed deadlines, which could have serious consequences for businesses both large and small. Ultimately, ensuring a smooth accounts payable process is key to keeping a business running efficiently and effectively.
What is the difference between accounts payable and accounts receivable?
Accounts payable and accounts receivable are two important concepts in the world of business. While accounts payable refer to a company’s obligations to pay off debt, accounts receivable refer to the money that is owed to a business but has not yet been paid. Both terms represent money that must be paid in the near future.
Due to their importance, it is critical for businesses to keep track of accounts payable and accounts receivable on a regular basis. They need to understand when payments are likely to come due and whether or not their cash flow can support those payments. With careful monitoring and planning, businesses can ensure that both accounts are managed effectively, streamlining their operations and keeping them financially stable.
What is AP automation software?
One important task involved in running a successful company is managing invoices and processing payments. In the past, this process would require a lot of manual work and constant input, with employees needing to scan documents, enter data into spreadsheets, and generally spend a lot of time dealing with paperwork.
However, now there is a new solution that can drastically streamline AP processing: invoice scanning software. This software allows you to quickly scan and process your paper invoices electronically, without the need for manual input or complex processes.
Not only does this software save time and money, but it also provides better insights and analysis into company spending habits – an essential component for making good strategic decisions about the future of your business.