The Most Common Accounts Payable Technologies

Let's Know Common Accounts Payable Technologies

Technology makes the lives of human beings easier by bringing knowledge, techniques, tools, and skills together. Accounts technology has made careers in bookkeeping, auditing, tax preparation, payroll, accounts receivable, and accounts payable easier, more effective, and more efficient. Accounts payable processes are multi-tiered, multi-departmental, and complicated. AP automation, also known as accounts payable automation, is how accounts payable processes are handled digitally using automation or accounts payable technology rather than manually.

The accounts payable process comprises invoice data capture, coding invoices, cost centre approval, matching invoices to purchase orders, and posting them for payments. The accounts payable cycle is the process of placing orders to suppliers, purchasing goods, and making final payments to the suppliers. An electronic accounts payable system pays the debt of an organization in a coordinated manner. When we talk about the types of AP technologies that most enterprises choose to install for the smooth running of the invoice approval process, three main solutions or technologies are chosen widely today. These are as follows:

• Document imaging/scanning (72%)
• Automated routing and approval workflow (52%)
• Automated data capture and extension (38%)

However, these three technologies focus on the initial phases of the invoice process, such as invoice receipt and entering data into the accounting system. Document imaging/scanning does exactly what it says: a technology that permits users to scan hard-copy documents into a computer system and keep them in digital format. In other words, it supports digitizing invoices. The digitizing process extracts the relevant data from these invoices and produces a digitized invoice.

Independently, document imaging/scanning solution does not add much usefulness to the process as a scanned invoice still requires to be entered into the accounting system for approval. Automated data capture and extraction tools, such as OCR and ICR,  help organizations streamline processes through accounts payable processing automation, improving accuracy and cutting costs by reducing employees performing manual data entry.

ICR services upgrade the performance of OCR technologies by translating diverse handwriting styles to extract data from both structured and unstructured texts. Automated routing and approval workflow tools then allow the AP team members to proceed with the digital invoice along a directed pathway to final approval. Workflow automation standardizes how the task gets done and provides accountability, thus increasing efficiency. In reality, many organizations already have the tools required to scan paper invoices into a digital system, such as all-in-one printers, and may not need special tools for the scan and capture part of the process.

But, this does not mean that these three technologies, when used together, are not powerful or effective. Rather, when these three systems are chained together, they can bring a significant difference in several invoices per full-time employee and tremendously speed up invoice processing. For many organizations, financial results get a boost as a result of efficiencies gained from the scan and capture solutions. However, for others, scan and capture solutions are merely the first step on the road to a complete invoicing solution that gives them an idea about how digital technologies work before making a big technology investment. These days, AI software is getting in trend.

One such software is Smart Payables. Smart payables offer a full range of accounts payable payment solutions for businesses. Founded in 2005 in Arizona, with its headquarters in Centennial, Smart Payables is the newest brand. It provides innovative technology through a user-friendly fintech system that enables customers to efficiently outsource their check payments, document printing, and mailing.

With a fully HIPPA, SOC2, and ISO-compliant programme, it can fulfil the needs of all businesses and large organizations. Laser check security decreases the risk of fraud along with MICR. The SMART goals for accounts payable automation technology are related to cutting down costs, reducing the number of data-entry errors, and improving processing times. SMART stands for specific, measurable, achievable, relevant, and time-bound.

Advantages of Accounts Payable Technologies

Here are some advantages of using accounts payable technologies:

• Efficiency: Accounts payable technologies streamline and automate the invoice processing workflow, reducing manual data entry and paperwork. This leads to faster and more accurate invoice processing.
• Cost Savings: Automation reduces the need for manual labour, decreasing operational costs associated with processing invoices, such as printing, mailing, and manual entry.
• Accuracy: Automated systems can reduce human errors often associated with manual data entry, leading to more accurate and consistent financial records.
• Faster Processing: Digital workflows enable faster invoice approvals and payment processing, improving cash flow and vendor relationships.
• Visibility and Transparency: These technologies provide real-time tracking of invoices, approvals, and payments, allowing better visibility into the status of outstanding invoices and payment schedules.
• Reduced Late Payments: Automated reminders and alerts help prevent missed payment deadlines, avoid late fees and preserve vendor relationships.
• Vendor Relations: Quicker processing and payments enhance relationships with suppliers and vendors, potentially leading to more favourable terms and discounts.
• Compliance: Accounts payable technologies often come with built-in compliance features, ensuring adherence to financial regulations and company policies.
• Analytics and Reporting: These tools can generate reports and insights, providing a better understanding of spending patterns and helping to identify areas for cost savings.
• Document Management: Digital storage of invoices and related documents reduces the need for physical storage space and improves accessibility for auditing and record-keeping.
• Remote Access: Cloud-based systems allow authorized personnel to access and manage accounts payable processes from anywhere, facilitating remote work.
• Scalability: As a company grows, accounts payable technologies can easily accommodate increasing invoice volumes without significant changes to the workflow.
• Security: These systems offer better security for sensitive financial information, with user access controls and encryption.
• Environmental Impact: Going paperless reduces the environmental footprint by minimizing the use of paper, ink, and transportation associated with physical documents.
• Integration: Many accounts payable technologies can integrate with other financial and enterprise systems, enhancing overall business efficiency.

Keep in mind that the effectiveness of these advantages depends on the specific technology and how well it's implemented within an organization's processes.

Final Thoughts

The common shortcomings of manual accounts payable processing are missing purchase orders, payment errors, slow processing, double payments, fraud, theft, lack of audit trail, and data entry errors. The top three technologies widely used today: document imaging/scanning, automated routing, and approval workflows, and automated data capture and extension, along with AI software such as smart payables, can prove to be tremendously powerful.

AP automation or accounts payable process automation software empowers businesses by reducing manual tasks and freeing up cash flow, thus improving the accounts payable cycle by reducing processing times, costs, and manual efforts, and avoiding duplicate payments. Further, this software helps businesses manage and pay invoices in an organized, timely manner for precise amounts, while saving vendor fees, human error, and of course, paper. Automation is the best method to combat the high costs of manual processing and improve the accounts payable process.