The global health crisis in 2020 led to a significant rise in the adoption of automation software by companies to facilitate remote work for their employees and enhance operational efficiency.
It has become evident that automation software benefits go beyond just enabling remote work, extending to improving operational processes in various areas such as finances, marketing, and project management, resulting in more resilient and efficient businesses.
One key area where automation plays a crucial role is in financial management processes.
Automating financial tasks like accounts payables and billing is essential not only for operational efficiency but also for factors like fraud prevention and cash flow management, critical for business continuity.
There is a wide range of solutions available for automating different financial processes or implementing comprehensive automation tools. For financial leaders considering where to start, a crucial aspect is determining what tasks to automate, whether it’s streamlining monthly payments or transforming the entire accounts payable system.
Payment Automation
Payment automation involves electronically transferring funds to vendors through methods like ACH transfer, virtual cards, wire, or checks, reducing manual intervention by using artificial intelligence (AI) to streamline payment processes.
This automation can handle tasks like invoice matching, transfer verification, and automatic payment approval and processing.
Invoice processing is a key feature of payment automation systems, efficiently managing invoices from various vendors, decoding information, and setting up automatic approval or human review processes.
The primary benefit of payment automation software is the time saved – preventing delays from manual work, reducing errors, and ensuring quick payments to vendors, enhancing business relationships.
AP Automation
Invoice automation takes payment automation further by not only streamlining vendor payments but also electronically reading invoices, routing them for approval, and updating the general ledger instantly.
AP automation requires more integration work as it covers all steps in the invoice cycle, automating tasks like submitting electronic invoices for payment processing and routing paper invoices efficiently.
AP automation involves approving invoices in the chain, initiating payments, and recording them on the general ledger, creating a detailed digital audit trail.
The benefits of AP automation mirror those of payment automation but on a larger scale, eliminating manual tasks, saving significant time, and allowing staff to focus on crucial business matters.
Which Automation System Is Better for You?
While AP automation software appears to be a popular choice for companies, according to Nasser Chanda, CEO of Paymerang, a leading payment automation platform, starting with payment automation might be more suitable for businesses initially.
Chanda suggests that payment automation, which can be swiftly implemented and generate revenue, is an efficient starting point due to its immediate benefits in efficiency and security. Later on, businesses can transition to invoice automation with the generated revenue for more comprehensive integration.
However, companies affected by remote work policies due to the pandemic might find significant advantages in a complete AP automation system. The shift towards integrated systems and automation at a network level has become crucial for business continuity.
Chanda highlights that AP automation supports business continuity plans, particularly in remote work settings, reducing finance team workloads and enhancing operational efficiency.
Automate Proactively to Realize Gains in Efficiency
Implementing payment automation or comprehensive AP automation promptly can yield significant efficiency gains for your business.
Chanda emphasizes that the reluctance to automate due to perceived busyness might no longer be a valid concern, as software workflows and AI tools can seamlessly enable secure and comprehensive automation processes in accounts payable.
