From hours to minutes: Save big with accounts payable automation!
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Accounts payable is one of those time consuming & costly but necessary tasks within the accounting and bookkeeping functions of a business.
But it doesn’t have to be!
Big leaps in software development and cloud computing mean introducing time-saving, repeatable processes can provide real improvements – and have a big impact on your business.
AP automation is an easy way to save time and money and make your accounts staff more efficient and productive – their time could be better spent on tasks that will save (or make!) the business money.
One of the key recommendations we often give our clients is to assess their current processes to see where they can take advantage of automation.
The benefits of accounts payable automation
The flow on effect from utilising accounts payable automation is huge, your business will save in so many ways
- Maintain good relationships with suppliers when bills and invoices are paid on time and the ability to take advantage of early payment discounts.
- Ensure fraud protection by adhering to strict business rules with tight sign off approvals.
- Reducing errors and duplicate payments.
- Save administration time to focus on other accounts functions, reducing the mundane and repetitive aspects of the job role.
- Accountants can focus on more important finance and planning tasks.
- Improving cash flow – by viewing supplier totals before they are posted you can generate forecast reports on committed expenses.
When you assess the accounts payable function, most of your regular creditors will be the same – telecommunications, utilities, insurances, loan repayments, rent.
It is an easy accounts role that can be streamlined and automated using your existing accounting software or you can implement many of the third-party accounts payable automation add-ons available.
Automation options in your accounting software
Most accounting software has functions built-in to automate some of the accounts payable function, although some of the features will vary depending on the software and version you are using.
Both Xero and Quickbooks for instance, have three price plans with different features. If you are looking to purchase accounting software package, we suggest you select the plan which can satisfy your company’s need.
(If this is you, read our Xero versus Quickbooks article for a breakdown on the differences between the two.)
a. Repeating regular bills
The Xero feature ‘repeat regular bills’, eliminates the need to create a new bill every time an invoice is received from a regular supplier.
Users create a template for each of the supplier’s invoices that are received regularly, Xero will then automatically create and save recurring transactions based on this custom template.
Xero also allows you to assign a rule to specific bank transactions during bank reconciliations. The example below shows when money is spent at any of these petrol stations, assign it to ‘automotive expenses’.
Similar to ‘repeating bills’ in Xero, users of Quickbooks can use ‘recurring transactions’ to manage bills that they pay regularly.
b. Schedule payments for accounts payable
The scheduling of payments for accounts payable enables your business to manage cash flow and avoid late charges which can add unforeseen costs. It can also contribute to building better relationships with suppliers by paying bills on time.
For bills other than regular transactions, Xero can also provide a schedule payments service for their users. In this case, payments of accounts payables can be scheduled at a specific day and paid after approval.
Likewise, QuickBooks can manage bill due dates and schedule payments (this is only available in QBO PLUS).
c. Accounts payable document automation
After the payment has been completed, Xero can send relevant documents and copies of invoices to each suppliers’ individual contact record. This enables fast lookup of the invoice if it is needed to be checked or referenced and saves filing time.
Quickbooks has an inbuilt document management tool. You can scan invoices, bills, cheques and attach to the relevant entry. It can be viewed by clicking on the paperclip symbol at the top of every transaction under Names, Account and Items list entries.
Accounts payable automation add-ons
With lots of add-ons for your accounting software, you can further automate the accounts payable function. Here is the run-down of some popular add-ons and how they work in making accounts payable even easier.
Bill.com
Bill.com is a cloud-based cash flow management software that can eliminate the long process associated with bill payments.
It enables your business to pay bills electronically via an Automated Clearing House network (a secure system for clearing payments through the banking system).
The add-on works with leading accounting software Quickbooks, Xero, NetSuite, Intacct, and others.
Bill.com allows for simple, streamlined payments with benefits including avoiding double entry, faster reconciling of accounts, tracking of online payments at any time and across all devices.
- It allows for total payment automation. The Auto Bill Entry feature pulls all the important details from each invoice to create a new bill. There is no more time-consuming data entry.
- Automatic notifications alert approvers when a new bill is ready for review and users can review and approve bills electronically from any device at any time.
Hubdoc
Hubdoc, an automated document collection for Xero and Quickbooks, uses Optical Character Recognition technology to analyse receipts and invoices for useable data.
These documents are stored and organised on a platform that lives in the cloud and integrates with users. It synchronises key financial documents, publishes bills and their data automatically.
It also imports the user’s Chart of Accounts and Vendors and manages how documents are coded using Vendor rules.
By creating accounting entries with the source document attached, it helps automate the process of accounts payable to free up bookkeepers and accountants for high-value work, improve productivity and efficiencies in accuracy and filing.
Receipt bank
This is a receipt processing service that gathers together receipts and invoices, scans them, converts the receipts into useful data and then sends them directly to Xero or Quickbooks.
- Uploading receipts for processing anywhere in the world can be completed by email, the web, or the iPhone app to send receipts on the move.
- All receipts and invoices are published automatically, and matches receipts to the bank feed in Xero or Quickbooks.
Expensemanager
For medium to larger companies that have various departments such as purchasing, stock control and accounts payable, expensemanager is a great accounts payable automation system.
Expensemanager allows data to be shared accurately, securely and effortlessly between departments and has numerous levels of authorisation for expense payments.
The application has seamless integration with ERP systems such as Microsoft Dynamics, Netsuite, SAP, Oracle, Peoplesoft, MYOB and others.
Start saving now with accounts automation!
It’s time to get automation of your accounts payable function off your wish list.
Using the easy features in your accounting software or by installing a feature-rich add-on, accounts payable will become a thing of the past – it will become a quick and easy routine to help you keep on track with your cash flow, take advantage of early payment discounts and have more time to add value to your business.
We can help at Penguin Management – every day we see how our clients use accounts payable automation as a time and money saving function in their business. It is easier when you have someone to help you – call us now on +61 2 8298 5301.
Already saving big time with accounts automation? Tell us how your business is doing it better in our comments section below – we would love to hear your tips!
Further reading
- Accounts payable just got a whole lot better with the New Payments Platform (or NPP for short). Read how the NPP can help you make simple addressed payments 24 hours / 7 days, in near real-time funds availability with richer remittance information.
- Poor cash flow management is not just a problem in the short term, it can also limit your business’ plans and growth. Take control of your cash flow with these simple steps.
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