Accounts payable process is digitized in organizations. Multiple invoices, bulk payments can be processed with the help of AP automation software. With an integrated policy engine businesses can ensure not to get over-budgeted.
Choosing the right accounts payable software depends upon your organizational requirement. It would be best if you considered multiple parameters like your accounts payable workflow, approval process, payments, number of invoices received and processed monthly. Check out our previous blog on accounts payable to know more.
How to choose an Accounts Payable automation software?
Let’s look at some of the points which helps you to choose the accounts payable software.
Define your AP structure – Before choosing the AP automation software, it is essential to understand the process involved.
- Invoice Receival – The actual processing of the invoice includes various tasks depending on the types of invoice received. This means that you need to analyze how many invoices are received in the form of soft & hard copies. PO & Invoices are to be matched accordingly and needs to be approved. How are these data being updated and how often is it done — the number of working hours and the resources required to process these documents.
- Approval Workflow – One of the critical aspect while processing the invoice is to get the approval from the approval manager. It would help if you considered the time taken for each successful approval. In case any invoice approval is rejected, what would be the time taken to review again and get it approved successfully. Moreover, how is the approval process done? Is it through emails, internal chat systems, or paper-based documents?
Mapping the current AP Invoice Process – Processing PO based invoices are different from processing the non-PO invoices. There has to be a thorough workflow established, and you need to identify the pain points involved while processing them.
Here’s a list of commonly faced AP invoice processing challenges.
- Lack of a centralized system for receiving vendor invoices
- Paper-based storage leading to loss of valuable information
- Delayed approvals due to unclear process and too many involvements
- Human errors due to the manual process
Centralize your AP – It becomes too difficult for finance teams to track and manage invoices at a time. An AP automation software will ensure that all the invoices are tracked & stored from a centralized location including receival of invoices, extraction of data, approval notifications, processing payments, etc. By using the AP software, invoice, procurement, and accounting data can be exchanged seamlessly between the business systems to facilitate the matching of invoice data with purchase orders, goods receipts, and contracts at line level detail.
Evaluation of AP software – It is advisable to evaluate the AP automation software thoroughly so that they don’t create any chaos after implementing them into your system. Since your entire accounts payable process is dependent on the finance automation tool, it is better to check whether they sustain your AP criteria.
Some of the criteria for evaluating AP automation software are:
- Can the AP software be customized such that it fits my business needs?
- Is the data uploaded is secured, and what is the frequency of data back-up?
- What type of security certificate the software has such that my customer’s data is safe?
- Is the software accessible from any device at any time?
- Is the software highly secured so that it doesn’t get compromised to any cyber-attacks?
AP Infrastructure – It is always advisable to go with a cloud-based AP automation software. They offer higher flexibility when compared to an on-premise solution. Choosing a cloud-based AP software helps you in building a strong internal AP network. They can be configured according to your existing process and can scale on an as-needed basis.
Pricing – AP automation software comes with various costs involved. The cost of finance automation software is directly dependent on the type of requirements you have. The pricing of a cloud-based AP software is highly flexible and offered on per user basis. However, there will be a specific fixed cost for setting up & configuring the system according to your requirements. These are way too cost-effective when compared to an on-premise solution which goes on a licensing basis, and you need to have your infrastructure & maintenance for that which comes at an additional cost.
Usability – With a cloud-based AP solution, you can access the software at any point of time from any device with internet access, helping you to run the business smoothly even when you’re at home or on vacation. With the help of mobile apps, you can accomplish critical tasks and monitor information on the go. You can make these apps as a preferred platform to work, and with a single-click, all invoices can be approved, leaving a digital trail behind. Access any of the information with the help of an in-built smart search feature.
Accounting software Integrations – Integrations are one of the most important things to look for in an AP automation software. It should automate the manual method of data-entry, making it easy to accomplish routine AP tasks. The software should be flexible enough to integrate with other accounting software so that there is no mismatch or duplicated entry is accounted in the accounting software helping you to achieve month-end book closures quickly.
Which is the best AP automation tool?
Finly is a machine-learning powered finance management and governance suite that seamlessly automates all your accounts payable.
►The cloud-based system, coupled with the mobile application, allows you to capture all of your expenses on the go by just taking a snapshot of expense vouchers.
►Any purchase order raised through Finly’s automated E-Procurement system automatically maps against the invoice received. Multiple other data points such as the delivery of the product, payments & E-Way Bill automapping against the purchase order.
►Through robust API banking, you can also schedule these payments. Set automated reminder notification through email / SMS to notify employees or vendors or critical activities.
►The user access controls can be mapped based on roles or responsibility of the user. Access can be revoked at any given point of time by the authorized administrator.