Tips, trends, and best practices: a crash course in getting your Accounts Payable department up to speed
Transforming your accounts payable system from a manual, time-consuming task to an automated, touchless system is one of the best things you can do for your company. And while it may seem like a daunting task at first, it’s actually fairly straightforward, as long as you bear a few important things in mind. Read on for our tips and advice on things to learn and best practices to consider as you get familiar with the world of accounts payable automation.
Learn the lingo
Before diving too deeply into accounts payable trends and best practices, however, make sure that you’re up to speed on the talk of the trade; getting familiar with AP-related vocabulary is the first step toward success. This helpful glossary is one of our most popular articles, and includes specific terminology that every AP professional should know. It’s not just for AP teams, either; the finance team and the C-suite can benefit from gaining a better understanding of the operations and goals of the AP team, as well as the role AP automation solutions play in accomplishing them.
Explore the possibilities
Once you’ve brushed up on your accounts payable vocabulary, it’s time to start thinking about how to maximize your AP team’s potential. And one thing has become abundantly clear in recent years: companies that don’t invest in digital transformation are quickly getting left behind. Automation is here to stay, and its effect on the Accounts Payable department has been nothing short of revolutionary. AP software is highlighted by analysts as a critical player in the market for financial digital transformation, and includes tools ranging from basic bookkeeping to advanced automation. Having an automated system in place helps to strengthen the relationship between AP and procurement by encouraging close collaboration, optimizing cash flow management and enabling better communication with vendors. And with more and more employees choosing to work remotely, there’s never been a better time to switch to a system that provides your team with real-time access to data from anywhere in the world.
Understand key differences
Once you have an automated accounts payable solution in place, you’re ready to start exploring how it can help you manage your supplier invoices - from receipt to coding, approval, and posting. But in order to achieve an efficient automated AP system, you need to understand how the workflow differs for PO and non-PO invoices. Both types benefit from a touchless system, but knowing the differences in the invoice approval process for each can help you develop a system that is smart and streamlined.
Identify your KPIs
An automated accounts payable system enables AP teams to transition from a traditional, back-office function to a more strategic role within your organization. Nearly all business functions use key performance indicators (KPIs) to gauge their performance and contribute to overall business success - and in their new role, Accounts Payable can do the same. AP automation solutions enable a more data-driven approach to accounts payable operations, making process KPIs available in real time. Accounts Payable teams can now track their process performance and compare to industry benchmarks to identify areas of improvement.
Note sure which KPIs to track? We lay out what we believe to be the five most essential indicators for companies looking to quantify their AP team’s overall impact.
Stay on top of the trends
Of course, it’s not enough just to implement an automated accounts payable system. You also need to ensure that you’re keeping up with all of the latest trends regarding AP technology, so that you can continue to fine-tune your business best practices. Artificial intelligence (AI) has generated a lot of buzz in the majority of business sectors for several years. Often used as an umbrella term describing technology that simulates human intelligence. AI has already become readily available in the market for many types of business processes, and its influence is forecasted to grow exponentially; the International Data Corporation (IDC) predicts that worldwide spending on AI systems will increase from $85.3 billion in 2021 to over $204 billion in 2025. For Accounts Payable teams, AI technology can bring impressive benefits such as higher efficiency, more automation, faster processing times, and more powerful data insights.
