AP Automation: Good – Better – Best

adding-machineThere are many ways you can streamline your AP workflow. Learn about the automation tools that are the best fit for your organization. AP automation is a term used to describe a host of options for a company to simplify their internal processes, which encompass anything from digitizing signatures on checks to electronic invoicing solutions. Ultimately, the goal of automating the AP process is to decrease overall payment cycle time, reduce data entry errors, and eliminate lost invoices.

Good: For companies whose AP departments are bogged down with check runs week-in and week-out, there is an alternative to printing checks onto pre-printed check stock. Check printing software can help simplify the process by allowing the user to print checks onto blank check stock. This work-flow has several benefits:

  1. Blank check stock is up to 50% less expensive1 than pre-printed check stock
  2. Digitized signatures can be printed on the checks eliminating manual check signing
  3. Because the check stock is blank, you can print from several different checking accounts, without having to switch out the check stock in the printer
  4. Blank check stock is a non-negotiable document, reducing the risk of fraud

Better: As we continue to migrate to an electronic workforce we are beginning to realize that there are many benefits to creating, storing, and transmitting information electronically and payments are no exception.

Many consumers in the United Stated have transitioned all of their payments to electronic payments. Can you remember the last time you were in a checkout line and the person in front of you paid with a check? Although businesses in the United Stated have been slow to transition, we seemed to have reached a tipping point and electronic payments are now commonplace in the workforce. A few of the benefits of making payments electronically are:

  1. Check payments require physical supplies like a printer, check stock, toner, envelopes, and stamps. Eliminating check payments instantly reduces the cost of making your payments
  2. Payments are settled faster, meaning that you have more control over your cash flow because you have more time to make your payments
  3. Pre-printed check stock is 125% more susceptible2 to fraud than electronic payments
  4. Making payments electronically eliminates the need for babysitting your copier, fixing paper jams, replacing check stock and toner

Best: Electronic invoicing, approvals, and payments are the holy grail of AP automation. Because there is no widely accepted standardization of the invoicing process, a silver bullet solution has been elusive. To-date, the state of the art in automated AP is to streamline the process of transforming the data on a paper invoice to electronic information, so it can be routed through an approval process and paid electronically. This type of solution can be accomplished a variety of ways and has a significant impact on the current AP work-flow.

  1. The process of invoice to payment3 can cost more than $16, while automating the process can cost less than $5
  2. Automating the manual transcription process reduces data entry mistakes, eliminating the need to recertify and resubmit payments
  3. Making the invoice routing and approval electronic, significantly decreases payment cycle times because invoices can be approved and escalated without physically routing the paper from one desk to the next
  4. Reducing your overall AP infrastructure significantly reduces overhead freeing up cash flow for other business activities

Every company is unique and so is every AP department. There is no one size fits all solution for how you should automate your AP processes. Piracle has specialized in AP automation for over 23 years. Let Piracle help you develop the AP automation plan that is right for your organization.

  1. Calculation based on average cost of printer, envelopes, toner, MICR toner, pre-printed check stock, and postage as compared to the cost of an electronic ACH payment
  2. http://www.fiscal.treasury.gov
  3. Aberdeen 2010 e-Payables Report

This post was contributed by Dan Parker Marketing Director www.piracle.com Phone: 800.621.5720 x358

 

photo credit -Liza Lagman Sperl on Flickr