Accounts Payable (AP) Automation is the act of processing invoices in a digital format and through a touchless process by using an AP automation solution. In an ideal situation, 100% of invoices a company receives can be processed automatically without any human intervention.
AP automation is more than just Optical Character Recognition (OCR). It is automation across the entire AP process, from data capture using OCR or digital invoice formats (such as EDI and e-invoices), through AP workflow, such as routing, coding, reviewing and approving invoices and automatically matching them to Purchase Orders (PO), to the seamless integration with your Enterprise Resource Planning system.
AP automation allows organizations to eliminate paper by introducing modern digital technologies and intelligent automation to the AP process. Automation reduces the amount of manual work, costs and time it takes to process an invoice, and increases efficiency and employee satisfaction.
AP shouldn’t be cumbersome, inefficient and costly. Instead, AP processes should be automated, interesting and rewarding. Well-designed and secure AP automation solutions allow organizations to manage their AP processes efficiently.
AP automation brings in a number of benefits, including:
There are many steps to invoice automation – from receiving invoices and capturing them into your invoicing system – to coding and routing them for approval, reviewing them and then sending them to the ERP system for payment. All of these steps can be automated, and when the full process is addressed, huge benefits can be realized. Benefits include early payment discounts, reduced errors and reduced manual work.
Before automating a process, you need to make decisions on work division between the AP department (or finance team) and the invoice reviewers and approvers in the business units. Bear in mind that the AP process involves many busy people in the business units. In fact, when companies perform efficiency calculations, the time spent on financial management tasks outside the finance team is rarely considered, even if the cost related to it might be significant. Our recommendation, based on hundreds of process development cases, is to centralize as much of the AP-related work as possible. And, here’s why:
1. Digitizing the data
The more you receive invoices in structured and digitized format, the better. Go through your invoice receipt methods, and improve them as much as possible.
2. Developing a matching plan
To optimize invoice automation, also make sure you establish a sound process for purchasing. By establishing effective purchase order practices, accurate invoices can be automatically matched against them, bypassing the approval process. The same method can be used with recurring and contract-based invoices.
3. Considering Robotic Process
RPA can be a good addition to invoice automation. The benefits of RPA are best seen with tasks that require lots of manual input work. RPA is particularly suited for tasks that are too small, irregular or fast changing to be automated using traditional systems, such as invoice entry and posting.
Accounts payable automation provides so many advantages – it’s more efficient, accurate and cost-effective. But before you can automate, it’s important to get your invoicing house in order. Otherwise, you’ll continue dealing with problematic, poor-quality invoices and won’t truly benefit from the productivity gains and cost savings that automation has to offer.
Before we dive into the actual invoices, it’s helpful to consider the two different types of data that are in them – structured and unstructured.
Invoices come in different types and formats. Understanding the differences between them and which is best for your organization is a key first step in improving invoice quality:
The road towards automation and e-invoicing doesn’t usually happen overnight; getting rid of paper invoices takes time. That’s why you’ll need to improve the process and convert your paper and PDF -invoices to a digitized format. The first step is to capture the data through an automated process. There are two main approaches to doing this:
E-invoices are the ideal solution for moving from a paper to digital AP process – it’s as simple as that. Why spend time and money trying to process paper, when you can automatically get the data you need electronically? It opens a whole new world of greater efficiencies, cost savings, increased quality and improved supplier relationships.
We’ve seen the future and it’s digital. Are you ready to join us?
Organizations are quickly embracing the cloud because of the many benefits it offers – it’s flexible, easy to manage, and available from anywhere – and it’s no wonder that AP departments are getting on the
It’s an ideal solution for enabling the mobile workforce to access and approve invoices digitally, anywhere, anytime.
IT has a role to play in ensuring that cloud-based AP solutions and upgrades are aligned with the organization’s technology strategy and existing infrastructure or ecosystem.
Automation can mean a lot of different things to a lot of people, but one thing that’s clear is that when it comes to AP process improvement, the more automation, the better. When you break down the invoice handling process, it is comprised of many steps – from invoice receipt and capture, to PO matching, coding and routing for approval, review and transfer to an ERP for payment and analytics.
It’s never been easier to implement AP automation than in the cloud. It represents a drastic shift in responsibility for system implementation, with AP being responsible for 90% of it, and IT only 10%.
The cloud makes operations easier than ever:
So, you’ve transitioned to AP automation in the cloud and everything is running smoothly, but what happens when it’s time to upgrade your D365/AX system? The good news is that nothing much changes – and IT isn’t required to do much:
AP automation on D365/AX is easy and requires minimal IT involvement. The master files, security, upgrades, and more are all implemented through Microsoft’s LCS in the cloud, so the IT department is freed up to focus on other activities.
The ease and flexibility of the cloud – not to mention easy access to your AP automation solution from anywhere, anytime – makes it an ideal solution for IT and AP departments alike.
Are you ready to make your work easier, more efficient and better? Hop on the cloud with us!
Finally you made the decision to move to invoice automation and benefit from streamlined processes, efficiencies and reduced costs. The next step is figuring out how to successfully make the transition.
The success of invoice automation also depends on how well you are able to get reviewers/approvers to review the invoices on the system in a timely manner. To encourage that, make things as easy and intuitive for them as possible.
While change is something people typically shy away from, it provides a great opportunity for process improvement. And it doesn’t have to be hard as long as you take advantage of key tips and best practices.
The benefits that AP Automation provides to all stakeholders are significant – making their jobs easier, more streamlined and interesting. By having a change management plan in place – and taking advantage of key strategies and best practices – you’ll be well on your way to bringing the value of automation across your
Congratulations! You’ve reached the last chapter on the Road to AP Automation. During this journey, we’ve provided you with insights and key information to consider when implementing AP automation, as well specific practices that can elevate your AP process to the next level – even before you automate. But to reach our final destination, we need to take a look at what the future holds for Accounts Payable to be in a good position to take advantage of it.
This chapter focuses on key trends impacting AP in the future. It provides insights to help key decision-makers, such as CFOs, CIOs, Controllers and AP Managers, stay on top of the key AP developments to leverage the latest technologies and gain critical business benefits.
We’re already well on our way to an efficient, intelligent and mobile invoicing future. Companies that have begun the automation journey are reaping significant benefits today and are first in line to take advantage of the greater functionality and usability that’s down the road – in the not too distant future. Are you ready to join your peers on this journey, create a streamlined, efficient and cost-effective process and take advantage of all the exciting developments that lie ahead?
Accounts Payable Automation involves a lot of different parts, from invoice scanning and data capture to workflows, mobile review and approval, and more.
At Dooap, we've taken the time to make sure our AP Automation solution covers the entire Puchase-to-Pay process from start to finish so that you don't have to worry about any of it.