The top 14 benefits of AP automation to save time and money

Manual accounts payable (AP) tasks are time-consuming and, in today's fast-paced business environment, take a toll on efficiency and profitability. From manual data entry to invoice approvals that are prone to human errors, you can eliminate many inefficiencies with the latest in automation. There are a slew of AP automation benefits you're missing out on if you're still doing AP tasks manually. 

In this post, we'll go over the many benefits of using an automated accounts payable system and show how you can receive significant cost savings and maximize your cash flow.

What is AP automation?

AP automation refers to the automation of workflows within various accounts payable processes. Using automation software, it assists with AP tasks—everything from processing and approval to invoice verification and issuing payments to different vendors and suppliers. This technology improves accounts payable departments by increasing the efficiency and accuracy of daily duties.

14 AP automation benefits

Implementing AP automation software offers a multitude of benefits for your organization. Below, explore 14 key accounts payable automation benefits, including how it can help detect fraud, integrate with your current ERP systems, reduce costs, and much more.

1. Saves time

By automating repetitive, manual tasks, AP automation software can significantly reduce the time spent on invoice processing, data entry, and approval routing. This allows finance teams to work more efficiently and focus more of their time on complex initiatives.

2. Reduces costs

Accounts payable automation software streamlines the invoice-to-pay cycle, leading to cost reductions. Manual data entry, storage, and postage can be costly, but automation helps reduce these expenses. Automation also helps you make on-time payments, avoiding unnecessary late fees. You can even leverage customizable settings to optimize cost and cash flow management. 

3. Detects fraud

Detecting and preventing fraud is a top priority for any business, and automation software comes with different features that can help. It may be too late by the time you're able to detect suspicious activity on your own, but automation software compares invoices and purchase orders, instantly flagging anything suspicious, including duplicate or fraudulent payments. 

4. Enhances collaboration

With the rise of remote work, it can be difficult to access physical files when employees are based in different locations. AP automation software securely houses data and transactions, giving people access regardless of where they're located. 

The software also allows you to easily connect with suppliers for better communication and payment processes with the help of shared dashboards and a centralized information hub.

5. Increases productivity

When AP departments reduce manual tasks, team members have more time to focus on more important parts of their jobs, naturally increasing productivity and morale. In addition to boosting job satisfaction, team members have more cognitive energy to contribute to problem-solving and innovative ideas to drive organizational success.

6. Improves supplier relationships

Supplier relationship management is key for any accounts payable department. Automation helps you pay vendors on time, improving trust and strengthening your relationships. And with built-in communication features, you can communicate more efficiently and proactively problem-solve should any issues arise.

7. Provides detailed spend analytics

One of the primary benefits of AP automation software is that it also includes detailed insights into spend analytics, allowing you to identify spending trends by department and which vendors you spend the most with. Your team will have access to advanced reporting tools that allow you to see spending trends and find cost-saving opportunities. This data lets you make strategic decisions with your company's finances.

8. Ensures reliable data and accuracy

Manual data entry leaves the task open for human error, but automation software can help reduce these errors significantly. The software checks for data accuracy throughout the full cycle of the accounts payable process, flagging any discrepancies or potential errors, allowing you to catch them sooner rather than later.

9. Streamlines payment processes

Automation streamlines regular AP tasks like generating invoices, making payments, and reconciling transactions. Not only does it make the process more efficient, but you no longer need to manually check for errors, speeding up the payment cycle and potentially giving you access to early payment discounts to help improve cash flow. 

10. Integrates with ERP

The right AP automation software will seamlessly integrate with a wide range of ERP systems like SAP, Oracle, and Sage. With these integrations, you don't have to worry about managing your data across platforms because it'll be centralized in one location. This gives you more visibility and better forecasting and budgeting capabilities. 

11. Increases visibility into spend management

The software lets you have real-time insights into spending trends, and you can easily filter the data to help with spend management. You can track spending by vendor, department, or spending category, helping you identify areas of overspending or where you may want to negotiate with your suppliers. 

12. Ensures compliance

Enforcing consistent approval processes and maintaining an audit trail with AP automation ensures compliance with regulations like SOX and GDPR. It can also check for internal guidelines. A major AP automation benefit is that it can check each invoice quickly to make sure it’s coded and approved according to company policies. This not only helps increase accuracy but simplifies the auditing process and gives a record of each invoice.

13. Tailors workflows with customizable settings

You can easily customize your accounts payable workflows with AP automation software. It allows you to configure rules for invoice routing, approval workflows, and payment schedules, reducing the need for manual checks. You can also set up alerts for invoices that exceed a certain threshold or route invoices from specific vendors to designated approvers.

14. Optimizes cash flow management

AP automation optimizes cash flow by accelerating invoice processing, enabling faster payments, and potentially getting you early payment discounts. Being on top of your payments with suppliers gives you more leverage when negotiating better deals during contract renewals because suppliers know they can rely on you for on-time payments.

What accounts payable tasks can you automate?

Automating key tasks within your accounts payable processes gives your organization the opportunity to significantly improve efficiency and accuracy. Let's go over some of the specific AP tasks automation makes easier.

• Approval routing and workflows: Automation minimizes bottlenecks and delays in the approval process with the help of pre-defined rules. Invoices are automatically routed to the appropriate personnel, and the software also checks for accuracy and compliance. 
• Data entry and invoice capture: AP automation software utilizes AI to capture invoice data swiftly and accurately. It also helps digitize paper documents to keep information in a centralized location for easy access and visibility.
• Payment scheduling and execution: With the help of automation, you can schedule payments based on due dates and available cash flow. It executes on-time payments, reducing processing time and helping you maintain strong supplier relationships.
• Invoice matching and validation: An AP automation system can automatically match invoices to purchase orders and flag any potential discrepancies like missing items or incorrect pricing. This significantly reduces the risk of errors, such as paying for goods not received or paying inflated prices.

Automate your AP and procurement processes with Zip

From streamlined workflows and improved accuracy to cost savings and enhanced cash flow, AP automation can revolutionize the way your accounts payable department manages your organization's finances. With its multitude of benefits, the entire AP team will reap the rewards while improving relationships with your suppliers.

If you're ready to utilize the transformative power of AP automation, look no further than Zip. We offer a robust suite of automation tools within our Procure-to-Pay solution, seamlessly integrating with your current ERP systems. Book a demo today to learn more about how Zip can improve your accounts payable processes.