Using The Right Processes to Drive AP Automation Success

Accounts Payable departments are vital in ensuring timely payments from your business. However, these departments often face challenges such as manual data entry, time-consuming approvals, and a lack of visibility in key details like payment status and early discount deadlines.

Accounts payable automation is a popular way to solve these challenges, but how effective is it? The truth is that it will only be as effective as the processes around it. When correctly implemented with the right processes and strategies in mind, AP automation can drastically improve the efficiency of your payables department, reducing errors, simplifying processes, and enhancing your bottom line. In this blog, we’ll explore the effectiveness of AP automation and the essential processes businesses need to optimize their results.

The Proven ROI of AP Automation

When implemented strategically, AP automation has delivered significant benefits across countless industries. According to Forbes, companies using AP automation can experience 81% lower processing costs and 73% faster processing cycle times.

Additional research showcasing the power of AP automation includes:

• Reduced processing time: AP automation shortens invoice approval cycles from 10+ days to less than 3 (Ardent Partners).
• Fewer errors: Manual AP processing has an average error rate of 3.6%, while automation reduces this significantly (Levvel Research).
• Lower fraud risk: Companies using automated AP systems are 63% less likely to experience payment fraud (AFP Payments Fraud and Control Survey).

Key Processes That Maximize AP Automation Success

Knowing what processes will yield success for your business is essential for leveraging the full benefits of AP automation. Below are some core processes and technologies and the challenges they solve.

Automated Invoice Capture & Data Extraction

Manually processing invoices is time-consuming and prone to errors, but leveraging the information inside these documents allows your business to make valuable decisions while digitally archiving vital transaction information. Document Capture technology enables businesses to automatically extract invoice data, eliminating manual entry and improving accuracy. Artificial intelligence and machine learning technologies take this process a step further, gaining even greater efficiency and accuracy. Find out more about how AI and ML revolutionize document capture in this LinkedIn Article.

Key Benefits:

1. Faster invoice archival, data entry, and processing.
2. Fewer data errors and duplicates.
3. Increased visibility into accounts payables workflows.

Streamlined Approval Workflows

One of the biggest bottlenecks in payables processing is waiting for invoice approvals. Manual invoice approvals result in lost documents and uncertainty about who needs to approve payments and when adding significant additional time to the payables process. Automation eliminates this challenge by creating rule-based approval workflows that route invoices directly to the correct approvers based on predefined criteria, including invoice amount, department, and vendor.

Key Benefits:

1. Faster approvals—reducing cycle times from days to hours.
2. Improved accountability with built-in audit trails.
3. Automatic reminders to approvers to prevent delays.

ERP & Accounting System Integration

To fully leverage your organization’s financial data, AP automation must seamlessly integrate with ERP and accounting systems like Microsoft Dynamics, NetSuite, or QuickBooks. Integration ensures real-time data exchange, eliminating duplicate entries and reconciliation issues. Visit our integrations page to learn more about how integrations streamline payables efficiency.

Key Benefits:

1. Real-time visibility into financial transactions.
2. Data consistency across platforms.
3. Using clean data for new analysis.

Exception Handling & Error Resolution

Even with automation, some invoices may contain discrepancies. A strong AP automation solution should contain strategies to flag issues like mismatched purchase orders or duplicate invoices for review.

Key Benefits:

1. Resolve issues quickly with automated flagging.
2. Eliminate overpayments or duplicate payments.
3, Maintain compliance with financial controls.

Vendor Management & Payment Processing

AP automation enhances vendor relationships by offering self-service portals where suppliers can submit invoices, onboarding information, and track payments. This enhances the vendor experience, bolstering relationships, and captures more data digitally from the start for more effortless automation. 

Key Benefits:

1. Fewer payment delays and disputes.
2. More streamlined data capture and processes.
3. Improved vendor satisfaction and stronger partnerships.

Common Pitfalls & How to Avoid Them

While AP automation delivers extraordinary benefits, many businesses fail to maximize its full potential due to common implementation mistakes. Here’s how to avoid them:

Oversee Change Management & Employee Training

To ensure smooth adoption, your staff should receive hands-on training and support. Square 9 offers complimentary training and industry-leading support for your solution.

Customize Workflows

Tailor automation workflows to fit your company’s unique AP processes. Square 9 makes this easy with a no-code workflow builder and customizable templates.

Ensure Security & Compliance

Implement role-based access controls, multi-factor authentication, and compliance monitoring while ensuring your data is hosted according to best practices.

How Square 9 Can Help

Square 9 is a leading provider of AI-powered intelligent information management solutions that take the paper out of work and make it easier to get things done. With digital workflows that automate many aspects of how you work today, we make it easy by extracting information from scans or PDFs, storing documents in a searchable archive, and building digital twins of your current processes through graphical workflows.