Accounts payable leaders cite lots of reasons for not automating their invoice processing.
Chief among them is a lack of IT resources.
To be sure, IT departments have their hands full, especially as they try to support the sudden shift to remote working. Most of an IT practitioner’s time is spent supporting existing technology.
But the more that IT practitioners know about AP automation software, the more they like it.
How does AP automation software work?
AP automation software leverages advanced technologies such as a digital mailroom, intelligent data capture, dynamic workflows, a supplier portal, seamless integration to any legacy ERP, and business intelligence to post a high percentage of paper and electronic supplier invoices straight-through.
Accounts payable robots (or “bots”) log into an e-mail box, FTP site or online supplier portal to retrieve invoices for processing. Suppliers also can use an online portal built into an invoice processing platform to submit invoices electronically or to “flip” purchase orders (POs) into electronic invoices. The result is that all invoice processes are centralized onto a single platform.
AP automation software uses a combination of optical character recognition (OCR), e-mail invoice extraction, robotic process automation (RPA), machine learning (MA) and proprietary technology to extract and verify data from each invoice according to pre-defined business rules. Invoice data is guaranteed 99.95 percent accurate and then matched against a PO. Matched invoices are seamlessly uploaded to any ERP application, including SAP, Oracle, PeopleSoft, NetSuite, Sage, Infor, MS Dynamics and many others. The best AP automation solutions also integrate with supplier billing systems to deliver detailed remittance data.
Unmatched invoices, or those without a PO, are digitally routed for approval based on configurable business rules. If any data required for approval is missing from an invoice (such as a PO number), an AP automation solution sends an e-mail to the supplier’s billing department. The supplier then clicks a link, inputs the required information, and re-submits the invoice. The data input by the supplier is validated in real-time, eliminating the possibility of back-and-forth e-mails further relieving AP specialists of the monotonous tasks burdening their day-to-day routines.
The IT benefits of AP automation software
Accounts payable automation benefits IT in five ways:
1. Seamless ERP integration.
IT departments spend a lot of time deploying, customizing and maintaining a company’s ERP. Despite the importance of the ERP to financial operations, and the tremendous upfront and ongoing investments that businesses make in their ERPs, many ERP systems are not fully leveraged because the business processes that touch these expensive systems have not been optimized. The IT departments at some businesses try to use kluge processes as a work-around for this situation. AP automation solutions integrate with any ERP system or accounting system, providing a single platform for managing front- and back-office information and processes. Invoice processing software automatically syncs data between the systems, with no duplication of content. AP automation also connects an organization’s structured data, such as data residing in an ERP system, with unstructured content such as invoices and purchase orders. And an accounts payable system can integrate with the workflows established in a legacy ERP or provide separate digital workflows.
2. Fast, easy implementation.
- The last thing an IT department needs is a complex and resource-intensive system implementation. Cloud-based AP automation solutions can be deployed fast, with minimal IT involvement. The best AP solutions integrate easily with legacy ERPs. And flexible configurations and intuitive user controls streamline deployment and training.
3. Reduced storage costs.
Data and document volumes are exploding across the corporate enterprise. Cloud-based invoice processing software eliminates the need for physical document storage by electronically archiving and managing images and data in a highly secure environment while providing authorized users with instant access to data. And the best AP automation systems can be scaled without burdening IT or requiring more servers.
4. Streamlined compliance.
- Information governance and security is an increasingly big part of IT’s responsibilities. AP automation solutions safeguard sensitive financial information through configurable roles-based access and interface controls. The technology also creates complete audit trails of all system activities and provides administrators with real-time visibility into user activities and the ability to quickly adjust security controls. Automated management of document retention policies, legal holds and disposition workflows ensures that documents are not prematurely discarded or destroyed. And digital approval and exceptions workflows eliminate the chance that documents will be lost, misfiled or stolen. Auditors can even be provided with view-only access to the system, eliminating the need for buyers to physically collect and photocopy invoices and documents requested by auditors.
5. Better audit control.
IT plays a big role in ensuring a business complies with internal and external auditor guidelines. AP automation solutions increase audit controls by restricting the ability to approve invoices and initiate payments to authorized individuals. Invoice processing software also separates operator duties (providing checks and balances) and creates audit trails of all activities within the system, including invoice approval and payment initiation. Unlike paper-based processes, AP automation provides real-time visibility into all processes and prevents unauthorized individuals from accessing sensitive data, such as supplier banking details. Invoice processing software also makes it easy to reconcile transactions frequently, increasing the chances of spotting fraudulent payments quickly.
Emphasizing these benefits of AP automation will help win IT’s support for your project.
If automation is a priority for your accounts payable department, IPS wants to speak with you.
Contact IPS to arrange a time to speak with one of our automation experts about your needs.