Posted in:

What is AP Automation? 5 Best Practices to Improve Your Accounts Payable Process in 2023

© by

Technology, especially AP (accounts payable) platforms, has changed the face of the AP industry in recent years. The most important trend in the industry is AP automation. Automated AP systems allow businesses to handle almost all steps of the AP process automatically, though human oversight is still necessary. AP automation is so important that businesses’ improvements to their AP process in 2023 should all be based on this technology. There are several ways to improve performance. These include converting all invoices to a standard format, matching invoices automatically with purchase orders, routing invoices automatically, and eliminating manual data entry.

Read on to learn more about the improvements businesses can make to their AP process in 2023.

AP improvements for 2023

Tracking the performance of each AP staff member

Performance tracking is one of the most important improvements businesses can make to their AP process. It is common for AP departments to track how many invoices each member processes per day. Some departments will also track other basic statistics, such as how much the company costs to process the average invoice. Nevertheless, to track performance accurately, more information is needed.

It is also important for businesses to track how much time each staff member spends on each part of the process. This allows companies to see exactly where the problem lies. This way, the company knows how to help each AP staff member become more productive. They can even have AP professionals who excel at a certain part of the process train staff members struggling with this task.

Converting invoices to a standard digital format

It is common for vendors to send invoices digitally these days. However, some companies still prefer to send paper invoices. Also, even those companies that send digital invoices, format these invoices in various ways. The biggest time-waster in AP departments of many companies is simply converting the invoices received from vendors to the company’s preferred format.

An automated AP platform can convert invoices automatically. Such media often use optical character recognition technology to take information from the vendor’s invoice and convert it to a standard format. The most advanced AP platforms use machine learning to improve character recognition based on the program’s “experience.”

Automating invoice matching

Another time draining activity of many AP departments is manually matching invoices to purchase orders. Not only is this process time-consuming, but it is also error-prone. Thankfully, having AP professionals do this manually is no longer necessary. Automated AP programs can match invoices and purchase orders automatically.

Not only can automated AP services match invoices and purchase orders, but they can also match receiving documents to each item. This is called “three-way matching.” An automated AP program can also match documents to the invoice, such as notes about the vendor’s preferred payment method.

Routing invoices automatically

One of the AP process’s most important and time-consuming parts is invoice approval. Large companies often rely on AP professionals to manually send invoices to the appropriate approvers. It is now possible to automate this process. Not only will this save time, but it will eliminate errors resulting from invoices being sent to the wrong approver. Medium to large AP departments with multiple approvers must implement automatic invoice routing in 2023.

Eliminating manual data entry

Even seasoned AP professionals may need to correct this when entering data manually. These errors are common and can be costly in terms of wasted time and money. Implementing an automated AP system reduces the manual data entry required at all stages of the AP process. A quick error detection and correction process is possible even for those steps still requiring manual data entry.

Finding the right AP automation platform

Some AP platforms may only allow businesses to make some of the improvements listed above. However, the leading platforms in the industry do have this functionality. When looking for an AP automation solution, companies should ensure that the platform they are considering has all these features.

For businesses, it makes sense to let their AP staff try out an AP platform before the company purchases the service. This will allow the company to see how easy the platform is to learn and to identify potential problems in new AP processes. Most automated AP platforms offer free trials so companies can try out their products. These free trials also allow companies to communicate with the software company’s customer service team and see how responsive and helpful they are.