The 2020 pandemic created an unprecedented push for companies to adopt automation software to better adapt their people and systems to remote work.
However, what is clear is that the benefits gained from automation software through operational efficiency and the most productive teams go beyond simply enabling remote work. Automation of functions in areas such as finance, marketing and project management creates stronger and more sustainable companies.
Perhaps in no other business function is this more true than in finance.
Automating financial management processes, such as accounts payable and invoicing, plays a critical role, and not just in overall efficiency. It also helps in key areas of business continuity, such as fraud prevention and cash flow management.
There are countless solutions available to automate any number of financial processes or develop a complete stack of automation tools. For financial leaders looking for where to start, one of the critical questions to begin with is exactly what they want to automate. For example, there are tools to simply automate your organization’s payments each month. There are also more sophisticated platforms to automate your entire accounts payable system.
Payment automation is a tool for making electronic payments to suppliers by ACH transfer, virtual card, bank transfer or check. Streamline payments by removing some of the most labor-intensive tasks from human hands and moving them into the realm of artificial intelligence (AI).
Payment automation can process some functions, such as invoice reconciliation, transfer verification, and automatic approval and submission of payments.
Invoice processing is possibly the most powerful feature of payment automation systems. This process accepts invoices from multiple vendors in all different formats. It then decrypts and stores all the information, after which it sets up a review cycle for automatic approval or human review.
The most significant benefit of payment automation software, naturally, is the time it saves.
Time is as important a commodity as any other business asset. Automating payments avoids the excesses that come from manual processes. It also reduces the chance of human error or late payments. Automation even makes vendors pay faster, which is a great way to improve any business relationship.
Invoice automation or AP takes the concept one step further. In addition to issuing payments to vendors, AP automation software can electronically approve and publish invoices for all relevant parties and the general ledger.
AP automation involves more work for integration as it touches every step of the billing cycle. For example, it automatically submits electronic invoices to the payment queue and scans paper invoices for efficient routing.
Staff members of the AP chain approve the invoice. After that, the automation issues the payment and posts it to the general ledger. This creates an easy to navigate paper trail, minus the paper.
The benefits of AP automation are primarily the same as those of payment automation, only multiplied.
With all the outdated manual functions, including sending paper copies, encoding invoices, and reconciling bank accounts by hand, AP automation helps companies save a significant amount of time. They free themselves to focus on more pressing matters.
Which automation system is best for you?
AP automation software may seem like a clear choice. For companies prepared to take it, it could be.
However, according to Nasser Chanda, CEO of Paymerang, the leading payment automation platform, payment automation may be better for businesses at first.
“Invoice automation and payment automation are two good candidates for automation because they are full of manual processes,” says Chanda. “We suggest starting with payment automation because it can be implemented in a matter of days and generates revenue for the business. It also boosts efficiency and safety automatically. Then we suggest using that revenue to pay for invoice automation, which involves a little more integration work. “
However, offices that have been affected by the pandemic may well consider the benefits of a full AP automation system. This is because the work-from-home policies that many companies have adopted have created the need for integrated systems. This, in turn, has resulted in a massive push toward automation at the network level.
“AP automation is a healthy part of a business continuity plan,” says Chanda. “Electronic flows work well in remote work scenarios and because finance team workloads are drastically reduced. We have seen our business explode during the pandemic. “
Proactively automate for efficiency gains
Whether payment automation or all-inclusive AP automation is right for your business, the time to implement it is usually now.
What is stopping some companies from making the switch? “Thinking they are too busy to automate,” says Chanda.
But that point may already be moot. “We have had clients who were closing their books, recruiting for open positions and preparing for audits by implementing our solution without problems. Software workflows and AI are perfect tools to enable a complete and secure AP automation program. “