Imagine an accounting department that runs like a well-oiled machine. Invoices are available via a single, well-organized platform, and are matched automatically to services or products received. Amounts and payees are verified, and the correct payment applied on the desired date. Approval workflows are streamlined, with invoices automatically being sent to the responsible approval administrator and errors are caught immediately, with duplicate invoices discarded.
What CFOs and Controllers don’t often talk about is how the majority of these processes are being automated — where everything is digitized for an entirely paperless accounts payable (AP) system. The secret to their success is intelligent technology, and top finance professionals are harnessing this power to drive more efficient processes and impact profitability.
How Tech is Driving Faster, More Efficient AP
Technologies like artificial intelligence (AI) and machine learning (ML) are increasing efficiencies with how invoices are submitted, received, verified, and paid, in addition to standardizing record-keeping across all vendors. Optical Character Recognition (OCR) can also help by converting different types of documents (PDF files, scanned documents, or digital images) into searchable – and editable – data. However, OCR is typically less user-friendly than its AI/ML counterparts often requiring consultants to ‘teach’ the system.
The Current State of AP: Slow, Outdated and Inefficient
An AP Association study found that 57% of all invoices were still received loosely on paper, making them difficult to track, process, and manage.
Currently, AP can be one of the worst bottlenecks your organization has to face on an ongoing basis. Multiple forms of invoice submission, a mix of paper and electronic supply/work orders and invoices, human error during manual coding and data entry, and deliberate attempts at fraud can all conspire to make AP a thankless task. Add to that the fact that many AP departments are understaffed, and the entire process can break down if one person takes a leave of absence. Outdated accounting systems and legacy payment systems can also add to the disorganization, making it challenging to keep your company in good standing with vendors and suppliers.
The Future of AP: Technology is Transforming Accounts Payable
While AP automation isn’t entirely new, the incorporation of AI/ML into the automation process is. With AI, automation is capable of recognizing and learning patterns more efficiently than humans. But the real advancement in AP Automation innovation is the streamlining of communications. By building communications into the Accounts Payable technology platform and having an easy interface for your approvers (where they can see the invoice, adding anyone to the conversation to get the information necessary to make a decision), chasing down approvals becomes a thing of the past.
With document storage and scanning, file architecture becomes more organized. Incoming invoices can be scanned, sorted, and filed in a way that makes the most sense for your company. At Stampli, we make it easy for clients to attach documents, such as contracts, to invoices. With all contracts and vendors linked, you no longer have to manually sort files in a filing cabinet or search through scattered digital storage of contracts. With centralized contract and invoice management software, you can move towards a completely paperless accounts payable department.
Invoice Lifecycle Management
Workflow automation typically follows document scanning, allowing for the streamlining of invoices with issues, such as increased amounts or duplication. These invoices can be routed directly from the scanning process to the next step in the funnel, matched to the particular work order or packing slips already scanned into the system and verified for payment. The invoice can be processed by the due date and kicked over into the payment approved file. Invoices identified as problematic can be shunted into the appropriate employee’s inbox for manual checking and verification. From there, invoices can be moved to the payment approved file — or sent back to the vendor for rectification. At Stampli, vendors can use the portal to check on the status of an invoice, and instantly see whether it’s been received, is in process or still requires action. These processes not only reduce accounting headaches, but they help build trust and goodwill between your company and your vendors. Automation can also significantly cut down on manual hours required for file management, allowing for more effective allocation of staff resources.
Studies have found that AP automation can save $16 or more for every invoice processed compared to a manual process and the average cost to process an invoice can be as much as 20-times higher for organizations lacking sophisticated AP automation.
Integrating your ERP or financial systems to your other key business applications brings efficiencies to your AP process. By making it even easier to use systems like Sage Intacct, Intuit QuickBooks, or Oracle NetSuite at full functionality, you eliminate the need to retrain staff or completely revamp your AP department. Key invoice coding data from your financial system is automatically available in Stampli — including any updates that have been done. Once an invoice is approved, the invoice is automatically sent into your accounting system to eliminate any manual data entry. Or if your process handles approved invoices differently, we can readily support that. Vendors who use similar systems can be easily on-boarded and assimilated into the AP process without delays or confusion. Being able to improve the functionality of familiar, effective systems through full integration and dashboard consolidation can further add to the improvements you are making to your AP funnel.
Don’t miss out on the leverage gained by using the latest technological advances. Automation is just the start CFOs. Embrace the cloud – it’s the new normal for data storage, transmission, and collaboration. Because the cloud is ‘always on’ you can access invoices anytime, anywhere, and from any device. Take advantage of rapidly advancing artificial intelligence and machine learning. AI and ML will allow your company to crunch data more efficiently, increasing speed and accuracy exponentially. Instead of replacing people, technology will become the most valuable tool you can give your employees, allowing them to increase their productivity and build even stronger relationships with both vendors and customers.
Why Paperless: The Benefits of AP Automation with Stampli
The more digital technologies CFOs and Controllers incorporate into the AP process, the greater staff utilization becomes. Stampli is geared to deliver on all fronts, making your AP department run smoothly.
- Visibility is achieved through a comprehensive dashboard.
- Quicker approvals and a complete audit trail are the results of built-in communication that allows anyone associated with an invoice to be brought into the conversation.
- Full integration with supplier systems is made possible through a vendor portal.
- Machine learning accelerates data entry via an AI assistant; “Billy The Bot” provides coding suggestions to speed the process.
- Sophisticated algorithms spot duplicate invoices and easy to use communications tools invite collaborations between multiple departments and vendors.
The benefits of creating a paperless accounts payable funnel by implementing automated invoice management and integration using Stampli include:
Built-In Communications. With mobile-friendly built-in communications, invoice approvals are no longer bottlenecked by a single approver. Stampli automates reminders if an invoice is outstanding and allows for anyone vital to the approval process to be included in the conversation. You get the information you need to make the right decision on the invoice.
Increased profitability. With fewer demands on your AP staff, they are now able to focus more time identifying which vendors charge late fees, and which ones offer discounts for early payments or specific payment methods. Your AP team can then prioritize those payments for savings and prevent penalties.
Improved vendor relationships. When your accounts payable department provides prompt responses – in addition to timely and accurate payments – vendors will often offer preferential treatment. This can be of vital benefit during times of logistics or supply problems; you’ll stay near the top of their priority list.
Increased accuracy and speed. Removing the human element from the AP process reduces human error, helps eliminate lost invoices and leads to faster approvals and payments.
Improved data security. Digitization allows you to close loopholes in your company’s privacy and data security, eliminating paperwork and encrypting all vendor data.
Standardization of incoming invoices. As electronic invoices become your preferred standard, vendors will organically adapt to your preferences as they see a difference in approvals and payments speed.
Decreased labor and materials costs. Eliminating the multiple facets of a paper-based system can result in significant annual savings – such as printers and printer maintenance; ink; paper; physical checks no longer need printing; automated invoicing no longer requires postage for snail mail payments.
Better visibility across the board. When you can instantly see your entire paperless accounts payable data on a single dashboard, or filtered by vendor, department, or date, you can identify patterns in departmental efficiency and vendor dependability.
Increase AP team productivity with automation. Your AP department becomes more efficient and can handle increased demands without needing to hire additional staff.
Automation and paperless accounts payable systems help make the AP funnel cost less money, use fewer resources, take less time, and cause fewer headaches. CFOs and other accounting executives can update many AP related processes streamlining their entire department, decreasing labor while increasing productivity.