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What is AP Automation?

Leveraging the time-saving advantages of any ERP system, AP automation is a tool that enables users, managers, financial controllers, and CFOs alike to ensure accuracy and efficiency in their accounts payable process.

Consider the ability to set an auto reply in one’s email inbox…

The convenience and time effectiveness of this tool allows any individual to ensure they don’t miss a message, and essentially acts as an assistant by replying to every single email in real time. AP automation is that same virtual assistant transported to the accounts payable world.

Accounts Payable Automation FAQs

AP automation, or accounts payable automation, is the digitized process by which accounts payable processes are handled using technology, replacing traditional manual processes.

Touchless invoice processing and invoice processing automation are synonymous. Invoice processing technology is used by businesses to pay suppliers efficiently while also streamlining the entire accounts payable process. AP automation eliminates the need to manually input data throughout the process. However approvers may still need to digitally sign off on payments.

AP automation technology automates manual processes within accounts payable, including receiving invoices, coding, routing invoices for approval, payment, and reconciliation. AP automation software typically works by integrating with a company’s accounting software to streamline the invoicing and payments process. AP automation software converts your suppliers’ invoices into a standard digital format and then pushes them through a digital workflow that results in paying suppliers.

At the start of this process, AP automation uses OCR, ML, or AI-based technology to extract information from invoices; using more advanced technology typically helps to improve accuracy over time. In addition, by customizing rules and workflows, such approval hierarchies, companies are able to eliminate the need for manual intervention for the majority of their invoices.

There are several benefits of using AP automation software, including:

  1. Reducing the time and cost associated with processing invoices
  2. Increasing efficiency and accuracy
  3. Improving visibility into spending
  4. Reducing manual processes and paper usage
  5. Streamlining approvals

When considering AP automation software, there are several features you should look for, including:

  1. Support for multiple currencies and languages
  2. Ability to integrate with your accounting software
  3. Electronic invoicing
  4. A payments process that aligns with your needs
  5. Workflow management
  6. Spend analysis and reporting

Not all AP automation software is compatible with ERP systems. In order for the two systems to work together seamlessly, they must be integrated. When an accounts payable automation solution is integrated with an ERP system, it becomes an add-on to the ERP. This means that the AP automation software is connected to the ERP and can be accessed from within the ERP system.

The integration process varies depending on the AP automation software and ERP platforms involved. While there are out-of-the-box offerings, in many cases, the AP automation software is installed on a company’s server and your automation software provider will provide in-depth training and consulting to set your team up for success.

There are many reasons to automate AP. Some involve a tangible and rapid return on investment. By reducing the need for manual effort, AP automation can drive down your processing costs. It can also help you scale AP more easily as your business grows by reducing the need to hire more people.

AP automation also provides tools that can help you manage payments and cash flow more tightly. By making the payment process faster and smoother, AP automation can also increase your ability to capture supplier payment discounts.

Other benefits include less fraud, fewer errors and smoother audits.

The cost of AP automation software varies depending on the features and functionality you need. Some solutions may be offered as a subscription, while others may require a one-time purchase. Basic AP automation software can start as low as $25 per month, while more robust solutions with a dedicated environment can cost $2,500+ per month. When considering the cost of AP automation software, be sure to factor in any additional costs for hardware, support, and training.

While we may be biased, yes, AP automation software is worth it. By automating your Accounts Payable processes, you can save your business time and money. In fact, on average, businesses using AP automation software see a 60% reduction in processing time and a 50% reduction in processing costs. EZ Cloud customers have mentioned seeing a 90% reduction in processing time.

When choosing AP automation software, it’s important to consider your specific business needs. Some things to keep in mind include the size of your business, the number of invoices you process per month, and whether you need features like approvals and workflow management. You should also compare different software options to see which one offers the best value for your money. Our blog, Choosing the Right AP Software for your business, outlines additional points.

When selecting AP automation software, it is important to consider the needs of your business and what type of features would be most beneficial. It is also important to compare different software options and select a solution that is easy to use and has a good reputation. Additionally, it is important to consider the cost of the software and make sure it is within your budget.

While there are many benefits to using AP automation software, there are also some challenges that need to be considered when implementing such a system.

  1. Cost – AP automation software can be costly to implement, especially for small businesses.
  2. Training – Employees will need to be trained on how to use the software, which can take time and resources.
  3. Change management – Implementing AP automation software can require significant changes to current processes and procedures. This can be disruptive for employees and may require additional training.

When considering AP automation software, there are several key features to look for, including:

  1. The ability to capture invoices from multiple channels, such as email, fax, and paper.
  2. Optical character recognition (OCR, machine learning, and/or AI technology that can extract data from invoices automatically.
  3. A workflow engine that can route invoices for approval based on configurable rules.
  4. Integration with your accounting or ERP system.
  5. A vendor portal where suppliers can submit invoices electronically and check the status of payments.

Why Use AP Automation?

By shifting away from manual entry tasks! Simplify, optimize, and modernize processes so efforts can be focused on more business-critical matters throughout the day.
Watch the Manual Processes versus Accounts Payable Automation explainer video to learn more!

Benefits of cloud-based AP automation

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