We go on and on about the benefits of automation. And the concept is pretty simple: you take slow, repetitive processes that normally waste hours or days each month, and let smart software take care of them for you.
We’ve already looked at how accounting automation can help, and expense automation too. Accounting and expenses are both often still stuck using outdated processes and tools, with teams moving slower than they need to.
We can add accounts payable to that list, too. From purchase orders, to supplier invoices, to approvals and accounting, there are so many touchpoints that are still done manually. Which means long wait times to process invoices, and that can mean unhappy suppliers.
So in this post, we’re going to talk about automating much of accounts payable, and getting on with the more complex or important work for finance and purchasing departments.
What is accounts payable automation?
As the name suggests, accounts payable automation refers to tools or processes that eliminate manual aspects of accounts payable, and instead automates them. This usually involves a dedicated software, some examples of which we’ll examine shortly.
Specifically, AP automation lets you submit and approve purchase orders and invoices digitally, rather than dropping them physically in in-trays. Some solutions will read invoices and extract information themselves, which means no data entry for anyone on your team.
The goal for most process automation is to move faster, reduce errors, and help the company scale easily. And in the case of accounts payable, as Purchase Control explains, “this removes manual tasks while also providing improved visibility and control over important financial data.”
On top of those broad objectives, AP automation has several clear benefits.
The big benefits of automating AP
In most cases, automation just makes everyone’s life easier. But it’s still an investment (although one that can often pay for itself), so let’s look at why you look deeper into automation.
Implemented well, accounts payable automation:
- Saves time. What was previously slow and repetitive work - checking purchase order forms and entering data - is now done almost instantly.
- Leads to fewer errors. Whereas humans tend to make mistakes the more manual a task is, computer programs repeat them endlessly without fault.
- Digitizes documents by default. Giant storage rooms and paper filing are out. Rather than filling out paper purchase orders then scanning and emailing them around the office, why not go digital right from the start?
- Increases productivity. The logical upshot of saving time by not doing boring, manual work, is that your teams have more time for the work they should be doing. That starts with finance, of course, but also includes other teams that don’t know how accounts payable works, and waste time figuring it out.
- Makes AP accessible from anywhere. Paper processes usually need to be done in the right place. Documents have to be placed in the right in-tray, and filed in the right cabinet. But digital processes - when they’re cloud-based - can be done from anywhere with an internet connection!
- Gives autonomy to other teams. If you choose a well-made, intuitive AP automation tool, these processes become accessible to everyone - not just finance. Other teams can confidently file purchase orders quickly and efficiently, with a system that walks them through step by step. Which means they need a lot less hand-holding than they used to.
Of course, you’ll find plenty more benefits the longer you stick with a good AP software. Which brings us to the next section.
For those new to accounts payable automation, we present a few good options to help you manage the process easier than you’d previously imagined.
4 interesting automated accounts payable tools
This is by no means an exhaustive list. Rather, we wanted to present a small range of good, different options, to show you the kinds of tools available and the problems they help solve.
Depending on your precise needs, one of these tools will likely solve it better than the others. So read through our list and see which of the following ticks the right boxes for your business.
Spendesk isn’t built just for accounts payable. Rather, it’s a comprehensive spend management solution that automates the worst aspects of expense reports, invoicing, and company credit cards.
The beauty of this is you have one platform for all your operational spending. Employees will quickly learn the right way to claim expenses, to pay for things while traveling, to request new subscription tools, and to pay consultants and freelancers for their services.
Handle all of these processes with essentially the same workflow - and using the same platform.
- Keep all forms of purchasing in one tool, meaning less individual training and fast improvements.
- OCR software to scan invoices automatically and input their data.
- Let individual employees manage their own purchases, rather than coming to the finance or procurement team every time.
- Set specific spending limits per team or user, and track all managerial approvals without effort.
- Automatically verify and store every proof of purchase within the platform, from the moment a transaction is made.
User quote: “I can submit an invoice via email, on the mobile phone or through the web app. This has helped me own my budget with total independence and transparency. When I upload an invoice, Spendesk can read the amount, date, supplier, etc etc so I no longer hate reporting expenses!”
As the name cheekily indicates, Beanworks is an AP automation tool designed for accountants. The tool automates invoicing and reporting, and is very helpful for companies going through an audit (see user quote below).
Of course, the reason it works so well for accountants is that it’s easy to use for employees with all levels of financial knowledge and technical know-how. So the finance team receives well-formatted requests and can push data into accounting tools with minimal manipulation.
- Imports and scans invoices automatically.
- Centrally stores important AP documents, including purchase orders and invoices.
- Matches invoices to purchase orders automatically.
- Includes workflows to require and track approvals from managers.
User quote: “Streamlined our approval process and even allows multiple staff to approve. We use it for 99 percent of invoices. And it really saved a lot of staff time preparing for our annual audit because we just gave the auditors access to the whole AP system. Don't know how I lived without it!”
Gatekeeper describes itself as “the AI driven all-in-one contract management platform” for everyone from operations teams to finance. It’s great for companies dealing with lots of contracts, particularly with regular vendors.
One of the most interesting features is the dedicated Vendor Portal. This lets you give regular vendors access to (a limited version of) the tool, featuring your branding. They can upload invoices and update purchase orders themselves, saving both parties time and effort.
Agile teams will also enjoy the Kanban Workflow Engine, which lets your whole team see who is responsible for each step of the process.
- Vendors can create their own invoices within the system via the Vendor Portal. So no need to scan or forward invoices amongst your team members.
- Additional documents can be attached to contracts, such as images, invoices, and memos.
- Approvals are integrated within the system, which streamlines the process and cuts down on unnecessary communication.
- Gatekeeper integrates with CRM software to link contracts with other customer records.
User quote: “Ideal system with feature set matches our needs. I like workflow flexibility, access control, bulk upload/update, flexible vendor and contract views, user management and dashboards.”
Stampli automates invoice processing similar to Spendesk, but without the other payment tools like company cards and expense automation. Contractors and suppliers send in their invoices, and your team members simply feed them into the system for approval and processing.
This process gets faster and faster thanks to Billy, a bot that reads your invoices and extracts key details. Billy gets learns more as time goes by, which makes coding invoices easier the more you use the tool.
Stampli also has a supplier portal, so trusted vendors can also submit invoices directly into the system. But the most popular aspect of the tool is its approval workflows, which satisfies 96% of reviewers.
- Billy the Bot scans invoices and extracts the data.
- Approvers can see all their outstanding invoices in one place.
- Digitizes invoices from the beginning.
- Integrates well with accounting and other financial software.
User quote: “We have gone from paperclips, mass amounts of paper, and staples to no paper invoices, no filing, and no wasted time with paper, period! Each of the people who handle A/P can work at their own pace and are not dependant on others to get their work done like it was in the past.”
Automate the accounts payable process ASAP
Slow, manual processes should be a thing of the past. Smart businesses already know how much more productive and efficient their teams become once they automate the repetitive, time consuming parts of the day to day.
And accounts payable is a rich hunting ground for processes to upgrade. For decades, companies have relied on paper purchase orders, paper approvals, and paper filing systems to run a working invoicing system. It’s time to move away from all that paper.
Automated systems are almost always:
- Easier to understand
- Less error-prone
- Cheaper in the long run
The only thing left to do is to take a few of these tools for a test run.