Cloud accounting systems and Accounts Payable automation allow us to streamline and automate accounts payable workflows, eliminating manual processes and providing better company-wide visibility and control over financial data. Accounts payable plays a critical role in the operation of an organization, but it has always been a fairly manual process.
What is AP Automation?
Accounts Payable automation is a tool that has been around for a number of years and is gaining traction with customers as they start to realize the benefits of adding this type of system to their portfolio.
AP Automation is typically a 3rd party solution that integrates with your accounting system. Most of the large AP Automation providers have provided some level of integration with the most popular accounting systems today.
How does AP Automation work?
Accounts Payable automation can work in a couple of different ways. One is that vendors send bills directly to the 3rd party automation service. They enter bills into their portal, which you can then approve and schedule payments, and make any necessary adjustments. They then create a virtual payment or send a check to the vendor on your behalf. Bill and payment information is then automatically or manually imported into your accounting system for record-keeping and general ledger posting.
Other companies choose to enter the bills in their accounting system and then push the payment information to the AP automation company for payment. This tends to be a more affordable option but requires more data entry for the customer.
Some AP automation services also provide corporate credit card services where users can log in and identify what their expenses are. Then that information can be posted into the accounting system for expense tracking.
Eliminating Manual Processes
The idea behind Accounts Payable automation is that it eliminates manual processes, streamlines AP operations, and reduces fraud. Typically, smaller organizations with less than 100 bills per month are not taking advantage of this type of service, but it can add value to larger organizations.
We have worked with multiple organizations that have implemented AP automation in some form. One casino client utilizes it for their alcohol purchases, so the AP processor works with them to automatically pay bills via ACH, then submits the data to the accounting system for general ledger posting. Since they have several restaurants and bars across their casino and lodge, we have developed a way for the system to recognize which location the purchase was made to track departmental purchases accurately.
AP Automation and Corporate Credit Cards
We have another client who is implementing an AP Automation service that also integrates with their corporate credit cards. We are using APIs to integrate with the web-based system to push payments to the 3rd party integrator and pull corporate credit card expenses into the accounting system.
Modern Accounting System- Built in Approvals and Notifications.
Many modern accounting systems allow us to scan paper bills and create a file attachment to the transaction. We can then setup approval workflows with notifications to managers for invoice and payment approval.
So you can see that Accounts Payable automation is not a one size fits all tool; there are many different ways that organizations can implement it.
Check out more of our blogs How to Plan for New ERP Accounting Software or New Cloud Accounting Software - What Should I Budget For. If you have more questions on Accounts Payable Automation or would like a Free Acumatica Cloud ERP demo. Contact us Today.