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The concept behind account payable (AP) automation refers to a technology designed to streamline the account payable process. It takes one of the simplest but still important aspects of your company’s financial responsibilities and makes them automated.
AP automation tools and platforms are not meant to replace your accountant/accounting department, but they can make their jobs substantially easier. Moreover, since they’re fully automated and reliable, the likelihood of a human error is nearly eliminated.
According to conservative estimates, you may be able to automate as much as 95% of all your account payable obligations this way.
There are a lot of scenarios in which AP automation is the only sensible solution. To back up this claim, we want to mention that the estimated growth of the global accounts payable software market will be a staggering 3.1.billion in 2024.
Some companies have a huge number of account payable obligations each month, and handling this might require hiring an entire accounting department. It may also require expanding with additional Full-Time Employees (FTE) or increased overtime for the current department members.
Even then, these specialists would be overworked and put mostly on menial, payment-related tasks. With AP automation, manual tasks are removed (for the most part), and there’s better visibility and control over some of the most important financial data.
Even though AP automation is an ever-growing market, about 90% of all invoices worldwide are still processed manually. This is a massive waste of work hours within any enterprise that can be avoided with a reliable AP automation tool and a thorough AP automation guide.
Taking full advantage of this opportunity would allow you to redirect your workforce to core tasks.
From the environmental standpoint, about 62% of all SMB/SME invoices are paper-based. The whole world is going paperless, and AP automation might just be another step in the right direction. With more and more companies going green every day, this may soon no longer be optional. Digital invoices also have increased visibility when compared to their paper-based counterparts.
An investment in AP automation, and robotic process automation (RPA) in general, come with a serious ROI. You save labor, which allows your employees to focus on something else. RPA takes over the majority of these repetitive tasks that no longer require the attention of your human workforce. Even costs of maintenance for these RPA systems are far from what you would have to pay in wages. Apart from this, you also get to save a fortune on avoidable fees (because of an invoice that missed its due date), or even capitalize on early payment discounts.
AP automation can also help improve the overall financial security of a business. First, paper checks can be stolen or misplaced, yet they contain sensitive banking information. Second, even handling this in a digital environment, malware and ransomware are serious threats that cannot be underestimated. Lastly, can the people in your employ really be trusted, and to what degree? Truth is that insider fraud is a real threat.
Companies and individuals that use this tech trend should no longer worry about missing a payment or making a mistake while filling in payment info. In other words, the entire process becomes simpler and more reliable.
This also allows you to unburden your staff by reducing the number of financial processes that are their personal responsibility. Therefore, this acts as both a financial and administrative boost.
Check out our infographic and learn more about Taming the Payable Chaos.