AP, or accounts payable, is the money owed to a business for providing goods or services. Finance departments typically track accounts payable as a liability, and employees go through various processes to ensure the liabilities are paid and accounted for.
Most larger businesses have changed to automated AP services to streamline their processes. However, according to a 2021 State of AP report by Mineral Tree, 45% of small businesses still pay over half of their supplier payments via check. Making manual payments via check is likely due to the upfront costs of automation and the belief that it is unnecessary for small companies.
There are many benefits of automating AP processes, even in small businesses. Here are five ways automation can benefit your small business.
- Reduce workload
Larger businesses utilize AP automation to reduce the need for additional employees. However, for small businesses, it directly impacts the workload and satisfaction of every employee.
When a company is smaller, employees fill multiple roles, which increases their workload. Automating the AP process will reduce the burden for employees who perform sales and customer-facing roles as well as those filling finance roles.
In addition, when employees are relieved of their repetitive duties, they have time to focus on tasks that add value to your company and increase revenue.
- Save Money
AP automation does cost additional money upfront. However, the benefits will save small companies in the long run.
One significant way automation saves money is through the invoicing process;
- During the QTC (Quote to Cash) process, customer information is collected up-front, so invoices can be generated automatically rather than waiting on employees.
- Automated invoices lead to less work creating invoices, reduced errors and rework, and quicker payments. All of which impact company revenue.
- Reduce Errors
Manual data entry, especially along multiple systems, leads to errors. With AP automation, information is seamlessly moved and validated across systems such as ERPs (Enterprise Resource Planning) and CRMs (Customer Resource Management).
Automation reduces errors, allowing employees to focus on things that matter, such as new leads and customer satisfaction, which directly impact and can improve revenue.
- Ease Compliance Burden
Successful compliance is necessary for a successful company. However, the process can be burdensome for small companies, especially those trying to run their business without automation.
Automation helps to secure protected information by storing it in a safe and encrypted location. In addition, there are options for dual-factor identification and alerts that add another layer of detection.
- Improve Employee Satisfaction
There are so many ways that AP automation can increase employee satisfaction. They include;
- Reducing the need for repetitive data entry.
- Automating processes that will allow employees to focus on other, more satisfying work.
- Reducing the number of tasks team members will have to perform within the AP process.
In Summary
AP automation is essential for both small and large businesses. Implementing automation within your business will;
- Reduce the workload for every employee, especially those filling multiple roles and job functions.
- Save money by reducing errors and automating the invoice process to get your company paid faster.
- Reduce the number of errors, allowing your employees to focus on tasks that bring real value to your company.
- Keep your customer data safe and aid in compliance measures.
- Improve employee satisfaction, which will lead to employee retention, which is essential to a small businesses success.