Challenges with Manual Accounts Payable
The established traditional methods of handling Accounts Payable (AP) have undoubtedly served their purpose. Yet, with the relentless march of time and the ever-increasing demands of our digital age, it's evident that the manual nature of AP processes is struggling to keep pace with the dynamic needs of contemporary enterprises.
While traditional AP processes have worked for decades, the manual nature of AP isn’t keeping up with the faster pace of modern businesses. We cannot solve our problems with the same thinking we used when we created them. The challenges we face today demand a new approach, and in this case study, we explore how automation emerges as the hero in this narrative, revolutionizing AP processes and catapulting financial operations into the digital age. We will delve into the intricacies of AP automation, examining how advanced technologies like artificial intelligence (AI) and machine learning are being harnessed to streamline and optimize the accounts payable workflow.
Time-consuming manual data input
Accounts Payable departments are among the most burdened, as too much time is spent on manual data entry, where staff members physically key in details from paper invoices into accounting systems. This isn't just time-consuming; it's a drain, especially when there's a mountain of invoices to tackle.
Human error and financial discrepancies
Manual processes are susceptible to human error. This can be as simple as typos, miscalculations, or inputting the same invoice twice. Fixing these mistakes is more manual tasks and can undermine trust with vendors. Over time, these errors can potentially lead to big financial losses, upset vendors, angry clients, and audit challenges.
Delays and inefficiencies
Without automation, the entire AP process – from invoice receipt to approval and payment – can be slow. Papers can get misplaced or someone in your team can be on leave and an approval is pending. Delays can result in missed payment deadlines, incurring late fees or penalties. They can also mean missed early payment discounts.
Difficulty in tracking and managing invoices.
Paper-based AP processes can lead to a lack of transparency in invoice management. Is it approved? Is it still waiting on someone's desk? Has it been paid? This can lead to communication challenges within the organization and with vendors. A lack of an efficient tracking system can make month-end or year-end reconciliations tedious and time-consuming.
While traditional AP processes have worked for decades, the manual nature of AP isn’t keeping up with faster pace of modern businesses.
The Role of Automation in AP
So, what exactly is AP process automation? In essence, it involves using advanced technologies, such as artificial intelligence (AI) and machine learning, to streamline and optimize the accounts payable workflow. By automating repetitive and time-consuming tasks, such as data entry and invoice routing, you can free up valuable resources for more strategic activities.
Finance department manages the transactions from different vendors or supplier by creating separate AP ledgers for them. AP Automation solution like DespaQ offers a supplier management system to keep track of vendors, all their invoices, and ensure timely payment processing for each one of them.
Accounts Payable Automation With DespaQ
DespaQ’s Accounts Payable Solution helps businesses save time, improve control and increase productivity by automating invoice processing and payment. For example, our solution can minimize the time and effort required to process invoices by eliminating manual entry and automatically calculating discounts. It automatically handles exception processing when there are mismatches between invoices and purchase orders. DespaQ also provides real-time insights into the entire accounts payable process to reduce the potential for lost bills or fraudulent invoice payments.
