January 17, 2024 |
Accounts Payable (AP) is a critical and highly precise business process that comes with numerous challenges. One of these is manual invoice handling, a time-consuming activity that can significantly impact the integrity of your accounts. Manual invoice handling impedes operational efficiency and jeopardizes the accuracy of financial records.
Overcoming these challenges is essential to avoid delayed payments, an increased risk of errors, and strains on supplier relationships. Fortunately, there’s a solution: automation.
AP automation uses technology to capture invoice data and process orders efficiently. It expedites processing timelines and ensures the precision of your financial data. Automated payables can bring a transformative shift to your workflows. Read on as we explore the efficiencies and insights gained when you automate accounts payable.
The Benefits of AP Automation
The myriad advantages that arise when you automate accounts payable can propel your business into a new world of enhanced efficiency.
Let’s look at some of the key advantages of AP automation.
One primary benefit of automated payables is the process cost per invoice. Automation reduces this by an average of 49%, from $12 to an average of about $6, which is $2 under the typical target cost of $8.
Payment error percentages are reduced by half, and duplicate payments are completely eliminated.
Days payable outstanding are slashed by 44%, strengthening vendor relationships and fostering a smoother transaction experience. The unparalleled speed lets your organization capture 100% of early payment discounts.
Among the other incredible benefits of AP automation:
- Improves accuracy,
- Turns short-staffed AP teams into efficiency heroes,
- Lowers the cost of headcount and frees up revenue,
- Protects against fraud,
- Improves data analytics,
- Accelerates financial reporting,
- Improves business relationships,
- Reduces data re-entry with automated integrations.
Conexiom’s AP invoice automation optimizes payment times and allows users to take advantage of every early payment discount. It reduces the cost of processing invoices by as much as 80%, all while increasing working capital.
The Current Challenges in Traditional AP Processes
Manual AP processes introduce significant business pain points. Traditional AP methods may lead to:
- Processing delays,
- Slow settlement of payments,
- Strained relationships with suppliers,
- Inaccurate financial records,
- Compliance issues,
- Time lost to repetitive tasks,
- Poor operational efficiency,
- Missed opportunities for cost savings.
It’s just not worth maintaining traditional AP processes. The digital transformation’s ability to automate accounts payable turns these invoicing issues into a thing of the past.
Key Components of AP Automation
AP automation involves several aspects you should know when exploring how to transform your accounting workflow.
Here’s how automated payables work and how these systems replace traditional AP processes.
Electronic invoicing optimizes the traditionally cumbersome invoice submission process by digitizing and automating the entire workflow.
Eliminating the need for manual data entry reduces the risk of errors and accelerates the approval cycle. Electronic invoicing can be submitted, reviewed, and approved in real-time.
The digital nature of electronic invoices allows seamless integration with your accounting systems, provides you with improved visibility into your financial data, and enables more accurate and timely financial reporting.
Woodhill Supply used Conexiom’s solution to automate AP processes, avoiding overpayment and freeing its AP team to focus on value-added tasks.
“Working with Conexiom was a double whammy and a great win on two different fronts for us. Not only were they able to automate the entry of our AP invoices, but they were also able to rectify issues we were experiencing with disparate data between our ERP system, Epicor Eclipse, and our vendor’s product data.”
Josh Laston, Controller
Invoice Data Capture and Extraction
OCR technology converts scanned or photographed images of text into machine-readable data, allowing for the extraction of relevant information from invoices. However, this can require manual validation to ensure the information is correct.
Conexiom does not use OCR for AP documents unless they are sent to your team as images. Our extraction technology is far more accurate and does not require a human to verify what was extracted before validations occur. Our platform streamlines the invoice delivery process and provides clear indicators of where the invoice doesn’t match the PO or where the invoice doesn’t match the receipt.
Conexiom also treats your ERP as the source of truth, allowing automation while maintaining processes like the three-way match, receipt discrepancy review, and original invoice attachments.
Workflow automation speeds up the approval process for invoices by painlessly directing the flow of documents through predefined steps. This eliminates the need for manual routing and tracking as the system automatically assigns tasks, sends notifications, and escalates approvals based on predefined rules.
Overall, automation slashes invoice approval timelines and eliminates manual handling errors, enhancing overall efficiency in AP processes.
Integration with Accounting Systems
Seamless integration with your accounting software and ERP ensures a cohesive and efficient financial ecosystem. Real-time synchronization of accounts payable data with these systems enhances accuracy, provides instant visibility into financial data, and facilitates informed decision-making by aligning all aspects of financial management in a harmonized and up-to-date manner.
How Accounts Payable Automation Works
- The first step in the invoice automation process involves documents being submitted via email.
- The Conexiom Platform for Accounts Payable detects and processes the invoices and immediately extracts the relevant data. Data fields are identified with 100% accuracy.
- Processed data is then pushed to your ERP or other system of record.
- Business rules, logic, and lookups are applied based on your unique needs, and then the data is transformed into a format your ERP or other system can use.
Conexiom’s accounts payable process goes well beyond other AP automation services. Unlike competing solutions, Conexiom is truly an automation tool instead of a workflow tool. Using Machine Learning and AI means there’s no need to waste time with human validation, shifting the labor from employees to software.
What's more, other solutions need access to additional PO and receipt data before invoice delivery to the ERP, meaning additional solutions and effort are required to import those documents daily. Rather than requiring your AP team to move from the ERP to another system, Conexiom uses the ERP as the source of truth.
Automate Accounts Payable with Conexiom
Conexiom’s AP automation system is fast and easy to use. The invoice automation process automates rote tasks with incredible accuracy. It allows your business to save money and time, forge stronger vendor relationships, and boost employee satisfaction.
Learn how to future-proof your finance operations with Conexiom’s AP automation systems.