The pandemic of 2020 created an unprecedented push for companies to embrace automation software to better adapt their people and systems to remote work.
However, what’s become clear is that the advantages gained from automation software through operational efficiencies and more productive teams transcend simply enabling remote work. Automating functions across areas such as finance, marketing, and project management creates more robust, sustainable companies.
Perhaps in no other business function is that more true than finance.
Automating financial management processes such as accounts payables and billing serves a vital 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 myriad solutions available for automating any number of financial processes or developing a comprehensive full-stack of automation tools. For financial leaders who are looking at where to start, one of the critical questions, to begin with, is exactly what you want to automate. For example, there are tools for simply automating your organization’s payments each month. There are also more sophisticated platforms to automate your entire accounts payable system.
Payment Automation
Payment automation is a tool for making electronic payments to vendors via ACH transfer, virtual card, wire, or check. It streamlines payments by taking some of the most time-consuming chores out of human hands and into the realm of artificial intelligence (AI).
Payment automation can process some functions such as matching invoices, verifying transfers, and automatic approval and remittance of payment.
Invoice processing is arguably the most powerful feature of payment automation systems. This process takes in invoices from various vendors in all different formats. It then deciphers and stores all the information, after which it establishes a review cycle for automatic approval or human review.
Payment automation software’s most significant benefit, naturally, is the time it saves.
Time is as much a commodity just like any other business asset. Automating payments prevents overruns that come from manual processes. It also reduces the chance of human error or missed payments. Automation even gets vendors paid more quickly, which is a great way to improve any business relationship.
AP Automation
AP or invoice automation takes the concept a step further. In addition to issuing payments to vendors, AP automation software can electronically approve and post invoices to all relevant parties and the general ledger.
AP automation involves more work for integration as it touches every step in the invoice cycle. For example, it automatically submits electronic invoices to the payment queue and scans paper invoices for efficient routing.
Staff members on the AP chain approve the invoice. After that, the automation issues payment and records it on the general ledger. This creates an easy-to-navigate paper trail — minus the paper.
The benefits of AP automation are principally the same as payment automation, just multiplied.
With all manual functions rendered obsolete — including routing paper copies, keying invoices, and reconciling bank accounts by hand — AP automation helps companies to save a considerable amount of time. They are freed up to focus on more pressing business.
Which Automation System Is Better for You?
It might seem like AP automation software is a clear choice. For companies prepared to take it on, it might be.
However, according to Nasser Chanda, CEO of Paymerang, the leading payment automation platform, payment automation may actually be better for businesses in the beginning.
“Invoice automation and payment automation are both strong candidates for automation because they are filled with manual processes,” Chanda says. “We suggest starting with payment automation because it can be implemented in a matter of days and generates revenue for the enterprise. It also strengthens efficiency and security automatically. Then we suggest using that revenue to pay for invoice automation, which has a bit more integration work involved.”
However, offices that have been affected by the pandemic may well consider the benefits of a fully AP automation system. That’s because the work-from-home policies many companies have adopted have created a need for integrated systems. This, in turn, has resulted in a mass drive toward automation on a network level.
“AP automation is a healthy part of a business continuity plan,” Chanda says. “The electronic flows work well in remote-work scenarios and because finance team workloads are drastically reduced. We’ve seen our business skyrocket during the pandemic.”
Automate Proactively to Realize Gains in Efficiency
Whether payment automation or all-inclusive AP automation is right for your business, the time to implement is often now.
What’s holding back some companies from making the switch? “Thinking they are too busy to automate,” Chanda says.
But that point may be already moot. “We’ve had clients that were in the middle of closing their books, recruiting for open positions, and preparing for audits implement our solution without a hiccup. Software workflows and AI are perfect tools to enable a complete and secure AP automation program.”
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