Each enterprise should take care of buy orders, payments, invoices, and funds to an array of distributors, who present every little thing from primary provides to high-value tools and companies wanted for all of the operations of the corporate. The Accounts Payable (AP) division is liable for the procure-to-pay means of any well-organized firm and offers with your entire buying workflow, ranging from Buy Order (PO) processing to remaining fee to distributors.
Guide AP administration is laborious and time-consuming, particularly as an organization expands and offers with a number of suppliers and purchases. The method of sifting by way of stacks of paper invoices, individually reaching out to approvers, and sending out bodily checks is cumbersome and error-prone. Guide AP processing can lead to delayed funds and, in sure situations, even expose the enterprise to potential vendor fraud.
Accounts Payable Automation is the answer to the issues of handbook AP administration and may optimize the procure-to-pay workflow for monetary groups. By eliminating the sluggishness of handbook procedures and their inherent errors, AP automation not solely enhances partnerships with associates and suppliers but additionally yields substantial time and value financial savings.
In line with IOFM’s Fall 2020 report titled “Measuring Your AP Efficiency: Effectivity Benchmarks,” 42% of PO invoices are paid punctually by way of automation, whereas the determine stands at 25% within the absence of automation. Within the 2021 World Class AP Efficiency: Effectivity Benchmarking Metrics report, IOFM discovered that corporations with out Accounts Payable automation paid the very best common value per bill of $1.83 per bill for the very best course of maturity degree. In distinction, corporations with end-to-end AP automation and the very best degree of course of maturity paid solely $1.45 per bill.
In line with a 2018 Goldman Sachs report, North American B2B companies spend round $187 billion yearly on AP processing, with labor alone accounting for over 90% of direct prices. Nonetheless, automated AP processing prices are simply 33% of handbook prices, leading to important annual financial savings of $62 billion for AP departments.
Information to implementing AP Automation
Accounts payable operations have the potential to affect money circulation dynamics and have an effect on the enterprise’s credit score rating. Moreover, persistently monitoring accounts payable throughout time gives invaluable insights into expenditure patterns and their correlation with enterprise development. Nonetheless, these insights can solely be gleaned from well-maintained AP data gathered over years of operation.
The transfer in direction of AP automation requires cautious planning and execution. Earlier than embarking on AP automation, it’s important to have a transparent understanding of what’s anticipated to be completed by way of automation – be it decreasing the associated fee per bill, trimming full-time equivalents (FTEs), shortening days payable excellent (DPO), or securing early fee reductions. Defining these goals aids in drawing a transparent framework for assessing Accounts Payable automation software program that aligns along with your requisites. Establishing objectives on the outset additionally serves as a benchmark towards which you’ll gauge the efficacy of your AP automation implementation because it unfolds.
Whereas the specifics of implementation may fluctuate based mostly on particular person enterprise wants and industries, a normal roadmap may be outlined to information the method.
Step 1: Planning and evaluation
The trail to attaining AP automation commences by assessing the present strategies in use, whether or not they contain handbook procedures or partial automation. An important step is to establish present challenges and discover how automation might provide options. Defining clear and measurable targets is crucial. Key elements to judge embody the length taken to course of invoices, the associated fee per bill, and the utilization of early fee incentives.
You will need to acknowledge the classes of paperwork that might require processing—corresponding to invoices, receipts, and buy orders. Potential variations in codecs, languages, or different distinctive options have to be thought-about. Many companies incorporate 2-way or 3-way matching inside their AP processes, necessitating a exact willpower of the required matching sort. Sure paperwork may necessitate knowledge manipulation, corresponding to refining dates or including forex symbols. The automation device ought to possess the potential to execute such operations.
Partaking all customers and stakeholders in crafting a complete plan for the automation journey is pivotal. This plan ought to delineate the timeline, concerned events, monetary necessities, and principal milestones.
Step 2: The number of vendor and product
Deciding on the fitting accounts payable automation software program supplier is pivotal. Intensive analysis and analysis of assorted choices are essential. Parameters like performance, scalability, integration capabilities, user-friendliness, vendor repute, and buyer opinions ought to information the choice.
The subsequent step would sometimes contain issuing Requests for Proposals (RFPs) to or buying product specs from shortlisted distributors. A great Accounts Payable automation system should be capable to join with completely different accounting techniques utilizing strategies like APIs or middleware. This enables them to simply share knowledge between techniques. The AP automation software program should be capable to extract invoices and buy orders from one accounting system, course of them, and replace the data in one other accounting platform. This integration lets companies use the options of AP automation software program whereas sticking to their acquainted accounting software program. For instance, Nanonets’ AP automation software program can work with different accounting techniques like QuickBooks and Sage.
The specs that information the number of an automation answer should embrace not solely the technical capabilities of the software program but additionally price range limitations, and the supposed timeline for implementation. The proposals/specs acquired want thorough evaluation and analysis, encompassing elements corresponding to pricing, implementation assist, customization choices, and ongoing buyer help.
The chosen vendor and product ought to be the one which aligns most successfully with the enterprise’s necessities, adopted by negotiations to determine the contract phrases.
Step 3: Organising and customization
Organising the AP automation software program entails configuring and customizing it to copy most popular bill routing and approval hierarchies of the group. Establishing consumer roles and permissions inside the system ensures applicable entry and segregation of duties. Adapting the system to align with distinct enterprise necessities encompasses adjusting fields, notifications, reminders, and creating pertinent experiences. As an example, companies have the choice to institute hierarchical approval procedures based mostly on bill quantities. This tailor-made method automates repetitive duties and upholds compliance with established protocols.
Step 4: Coaching and testing
A complete Person Acceptance Testing (UAT) earlier than the system’s precise launch entails analyzing a variety of situations, together with bill entry, 2- or 3-way matching, approval workflows, fee processing, and reporting. The target is to confirm that the system operates exactly as supposed, with all components seamlessly interlinked.
Equally vital is the availability of thorough coaching to the Accounts Payable staff and related stakeholders in utilizing the AP automation answer. This coaching ensures a easy transition and efficient adoption of the brand new system. Addressing any issues which will come up, furnishing detailed documentation, and spotlighting the benefits of automation can considerably contribute to fostering consumer acceptance. Clear communication and training concerning the system’s advantages assist in constructing confidence and enthusiasm amongst customers, guaranteeing a profitable integration course of.
Step 6: Implementation and refinement
The implementation of the AP automation system marks the beginning of the usage of the software program. Cautious oversight through the preliminary part is important, because it permits for the immediate identification and determination of any potential points that may floor.
Guaranteeing the system’s effectiveness is an ongoing dedication. Steady analysis and optimization are integral elements of this stage. Frequently scrutinizing key efficiency metrics, gathering insights from consumer suggestions, and introducing vital enhancements are practices that maintain the system in sync with the dynamic evolution of enterprise necessities.
Cultivating a powerful partnership with the automation vendor is vital to make sure ongoing assist, holding the system up-to-date with well timed updates, and promptly addressing any technical challenges that may come up. The automation vendor’s experience and help would assist in sustaining the system’s seamless performance, thus contributing to the sustained success of the automation journey.
Nanonets in your AP automation journey
AP automation instruments like Nanonets provide a mess of advantages. With the ability of AI, these instruments allow the easy creation of AP workflows that mechanically mixture information and paperwork from numerous sources, starting from emails and scanned paperwork to digital information, cloud storage, and ERP techniques.
Past its sensible seize capabilities, efficient AP automation instruments, together with Nanonets, present a complete suite of options. These embody automated and clever knowledge extraction from a wide range of doc varieties, expense matching, and reconciliation, streamlined administration of expense workflows, from producing experiences to securing supervisor approvals, and seamless integration of month-to-month accounting closure with most popular ERPs, accounting software program, or enterprise instruments.
Nanonets excels in knowledge extraction from all kinds of invoices, spanning credit score/debit invoices, proforma invoices, industrial invoices, and extra. Past invoices, Nanonets showcases its proficiency in scanning numerous monetary paperwork like receipts, worth tags, buy orders, debit and bank cards, and numerous others.
Nanonets affords substantial benefits to AP groups, together with a formidable 80% value discount for companies, as much as a tenfold enhance in bill processing velocity, and enhanced optimization of AP days. It successfully eliminates inaccuracies arising from handbook checks and verifications, proficiently addresses exceptions, and intelligently routes them to the related personnel. Moreover, Nanonets can assist in detecting and eliminating fraud, theft, double funds, and different inefficiencies.
Central to Nanonets’ capabilities is its AI-driven platform referred to as Movement. This revolutionary platform redefines the AP course of by seamlessly incorporating essential AI components into the Accounts Processing workflow. Nanonets aids in driving AP automation, establishing end-to-end accounting workflows, and effortlessly integrating with a variety of platforms together with Sage, Xero, Netsuite, Quickbooks, and extra. Moreover, Nanonets helps each home and world fee strategies, encompassing ACH, wire transfers, bank cards, wallets, and neobanks.
Take Away
AP automation can considerably affect a enterprise’s monetary well being, operational effectivity, and general competitiveness. As evident from trade experiences and statistics, the advantages of AP automation are substantial. The implementation of automation results in a exceptional enhance in on-time fee charges, a discount in processing prices, and extra environment friendly bill administration. With companies spending billions on AP processing, the potential for saving substantial sums by way of automation is evident. As expertise continues to evolve, embracing options like Nanonets not solely brings short-term benefits but additionally positions companies for sustained development and success in an more and more digitized enterprise panorama.