As you get started on your journey to automate your accounts payable processes, you’ll need to consider your current AP workflow. Automating your AP workflow has significant benefits, according to Levvel, an Endava company, with a potential reduction of up to 85% of the cost per invoice.  To realize the benefits of workflow automation, including increased efficiency, cost reduction, and security, you’ll need to map out what parts of your existing workflow can be automated. 

In the simplest sense, the AP workflow includes all components of acquiring goods/services, as well as the processing of such transactions from end to end. Any kinks in this process can lead to costly invoicing down the road, as well as stunted growth, so it’s important to have a smooth process implemented across the board. 

The steps included in the accounts payable workflow are: 

• Invoice capture and approval
• Payment authorization and execution
• Supplier management

Accounts payable approval workflow automation 

To streamline your workflow, you first need to install AP automation software that will digitize all your paper documents (i.e., invoices, payroll info). The software will perform a manual check to ensure all digitized and paper invoices are the same. If it finds errors, these documents are forwarded to administrators for their review. Any issues that need to be corrected are automatically forwarded to the proper parties. 

Advantages of automating the accounts payable process

When it comes to automation of the accounts payable workflow, there are a variety of advantages, including: 

1. Timely payments & reduced late payments: One of the primary benefits of implementing AP approval workflow automation software is that you can ensure all your payments are sent or collected on time. You can also eliminate late payment penalties by completely automating the payment schedule.
2. Reduced fraud risk: Automating the workflow process can help you eliminate the chance of fraud as the software is designed to automatically weed out suspicious vendors and enables added oversight into taxes, and more.
3. Eliminating manual data entry: Manually entering accounts payable data can be time-consuming and, unfortunately, can leave the door open for human errors. However, automating data entry is easy with the right AP workflow software, and your staff can focus on more high-value tasks.
4. Keeping accounts under one umbrella: Having centralized accounts is one of the best ways to avoid issues in the AP department. That’s why automating AP workflows is a popular choice for every type of business, no matter the size. Centralizing your AP department processes electronically means minimal paperwork, and  the ability to handle all financial transactions & approval processes with one software.
5. Added security: When it comes to online payment approvals, invoice approval workflow software provides an added layer of security and makes it much easier for those at the administrative level to identify and reject fraudulent invoices.
6. Improved audit trails: Whenever you want to check on your financial records or someone else does, AP workflow automation makes the process much easier. With an automated system, audit teams can find the information they need without having to sift through a pile of papers and have access to your financial records in their entirety. 

As mentioned briefly above, automating the AP workflow process helps prevent human errors. However, having a clear idea of how human errors can affect your accounting processes is key. Although it may seem errors happen only occasionally, they can be extremely costly both over the short and long-term, resulting in not only erroneous payments but also duplicate payments. Just imagine for a moment that a staff member accidentally sends two $50,000 payments to a vendor that goes unnoticed. (These numbers can add up quickly). 

In addition to the issues above, tax errors can also result in added costs. Not only are there financial implications involved, but compliance and regulatory issues as well. In fact, tax errors can lead to costly audits, fees to your local tax agency, and more. Pricing errors can also be the result of a simple data entry mistake, and depending on the product or service and how long such an issue goes unnoticed, it can cost a company thousands and affect your contracts with vendors. 

The role of finance teams in accounts payables 

When it comes to the role your finance team plays in the AP department, there are some essential functions to keep in mind. Not only are finance teams responsible for preventing financial fraud within your organization, but they also perform essential tasks such as issuing purchase orders, keeping track of vendors, and processing AP reports. 

Some of the other key functions a reliable finance team will play regarding AP workflow processes include: 

• Increasing cash flow through streamlined approval workflows
• Aligning payment cycles with supplier agreements
• Monitoring late payments and internal controls
• Generating financial reports regarding cash flow reimbursements and requirements
• Handling the petty cash fund

We’ve provided a clear breakdown above on how today’s leading AP workflow automation software can benefit you. Here we also wanted to highlight some of the top features offered:

• Optical character recognition (OCR) technology for invoice processing 

This advanced feature enables your invoice processing software to easily capture every aspect of invoice data, from numbers and names to totals, and then convert it all into searchable text. This means you can easily track and pull up any invoices you need with a simple search or a click of a button. 

• Business process integration for scalability & flexibility 

Often today’s more advanced AP workflow automation can provide solutions for automating additional daily processes, enabling companies to scale as they need to and providing the flexibility to scale back when needed. The best software is easily integrated with your ERP system and other platforms to streamline processes via invoice automation. 

• User-friendly interface to increase adoption rates

Advanced AP workflow automation software is also extremely user-friendly, making it easy to train staff and implement the software at every level of your organization.

AP automation workflow solutions can help you streamline your processes, improve oversight in your AP department, and increase security. With features like OCR and AI-assisted data entry, you can boost accuracy and efficiency. Finance teams play a vital role in managing relationships with clients and vendors, and automated workflows enable them to dedicate more time to those relationships.