The more technology advances, the greater the benefits to mankind. In fact, technology is only penetrating deeper into a wider range of activities, whether it be conducting daily life and waking up to an alarm courtesy of our mobile phone, robots running assembly lines, or even managing the financial processes for businesses.
Not only does intelligent automation and more specifically Accounts Payable automation software serve to facilitate the invoice processing workflow, it also provides additional services to businesses. Indeed, as automation capabilities advance the tools have become easier than ever to use and are even available from a variety of cloud-based SaaS providers, on a pay-per-usage basis. This availability is key as it makes the automation software accessible to all sizes of businesses and able to scale alongside them as they grow. But how does it really work? What do these terms mean? What are we referencing when we talk about AP process automation?
Within the Accounts Payable department, business process automation refers to the replacement of all or part of a given process, one that originally consisted of exchanging paper invoices, with digital processing technology. This process - more commonly known as Accounts Payable (AP) automation, Pay-to-Purchase (P2P) automation, process automation, invoice processing approval, or even payable process - begins with invoices or documents in some form which arrive from various sources.
In some cases, the information needing to be processed already exists in an electronic format, either in a structured file format such as EDI, XML, or CSV, or an unstructured one, such as a PDF file. In other cases, the data must first be transformed into digital image format by scanning the contents of paper documents using scanners in conjunction with automatic document reading (ADR) and optical character recognition (OCR) technologies. Whether it be an invoice, contract, call-for-tenders, or even tax information, the data is extracted for further processing and approval.
In its reference guide to invoice capture and payable automation process practices, the consulting firm Markess International distinguishes three ways of dealing with the invoices:
All three methods of managing invoices are currently in use by organisations today.
Among the processes most frequently automated is the management of incoming and outgoing invoices. These processes involve numerous documents, such as order forms, delivery slips and invoices. Invoice processing involves many data-processing (i.e. entry, reconciliation) and approval steps, which are frequently prone to error when performed manually. Almost all organisations are concerned by invoice processing, not just large companies and government groups.
Several studies have highlighted the challenges faced by accounting departments that have not implemented accounts payable automation software. These include lack of visibility, lost invoices, payment errors, insufficient traceability, absence of a reliable audit trail, delayed approvals and payments and more. In addition, there is also a cost factor to using a manual process.
Consider, for example, the cost of manually processing a paper invoice. This was shown to range from £9.40 to £20.80, with storage estimated at £3.25 per document. Imagine the implications when a business needs to store thousands of documents. The figures for lost or incorrectly classified archives are equally astounding: £110 to search for an archive and £200 to recreate it.
Beyond these direct costs associated with manual invoice processing, you must also consider indirect ones which, while possibly harder to quantify, are just as important and equally detrimental to accounts payable operations and teams:
There is also the unquantifiable cost that a mismanaged process has on the organisation; a late or lost invoice affects approval which then affects payment which will affect the vendor/supplier relationship.
Without requiring any compromise on performance, features or security, cloud-based SaaS process automation represents considerable savings with respect to on-premise invoice process automation software. SaaS does not involve any installation or license fees. With per-use payment, the price matches the company’s actual processing activity. Not only that, but users benefit automatically – and at no charge – from product improvements and upgrades, such as changes made for regulatory reasons.
In addition to this, modern software is typically fast and easy to get the hang of, resulting in improved productivity of accounts payable staff from the very first day. What's more, this type of automation platform facilitates access at any time, from any place and via any device. This streamlines the entire approval process as there are no delays due to out-of-office, multi-location or remote work teams.
As invoice processing and approval has advanced, so too has Accounts Payable automation, offering massive developments over the past few years. Many factors have contributed to this, including solution availability, SaaS offers and use-based pricing models... All of these have helped to bring digitalisation within reach of a broad range of organisations regardless of their size or the volume of documents that they handle. Once implemented, accounts payable offers benefits across teams and departments. In fact, automation offers benefits to the entire company.
Beyond critical basic criteria, such as solution performance, infrastructure security, resulting automation level and scalability, choosing an automated invoice processing solution starts with optimal understanding of the organisation’s current situation, as well as the problems to be solved. The steps are as follows:
Ultimately, however, although all of the research and cost/benefit analysis is important, the key is to start.
Understanding how accounts payable automation works is vital for any business looking to streamline financial operations and improve accuracy. Accounts payable automation refers to the process of converting manual invoice handling tasks into automated workflows. This technology helps reduce human errors, speeds up processing times and frees up staff for more strategic work.
Yooz stands out in this field, offering a solution that automates 80% of invoices without prior setup. Imagine revolutionising your accounts payable process in just one hour, without needing extensive training. Yooz's real-time AI performance, combined with extreme simplicity and maximum business functionality, sets a new standard in automation.
With Yooz’s All-in-One solution, every stage of your P2P cycle, from purchase request to payment, is automated seamlessly. Yooz was born in the Cloud, making it a solid and enduring solution recognised by prestigious awards and trusted globally. The unmatched business expertise and innovative focus on automatic document processing make Yooz a leader in the industry.
For businesses exploring what accounts payable automation is and its potential benefits, Yooz offers a comprehensive and efficient answer. By implementing Yooz, companies can enhance their financial processes, reduce costs and gain a competitive edge in today’s fast-paced business environment.