Why accounts payable automation is vital to SME success

Without a doubt, running a business has become more complex when it comes to managing your cash flow and outgoing payments.

Even if you are highly localised and devoted only to serving your community, there is no denying that smart financial management has become increasingly challenging, especially if one of your goals is to maximise the potential of every dollar you spend.

Here’s what you need to know about accounts payable automation and why it’s important for success in 2023.

Challenges of manual accounts payable processes

As SMEs expand into new markets and as they target more customers nationally and abroad, the financial department can start to feel overwhelmed.

Manually managing financial processes is a time-intensive, ineffective task that can lead to human error and financial setbacks.

Bookkeeping in general is a lot more nuanced nowadays than simply tracking how much money is coming in versus how much your business is spending.

If you want to get a firm grasp on your financial processes, especially when you’re handling a lot of invoices through accrual-based accounting and logging numerous bookkeeping entries, it’s important to automate the process to minimise errors.

This method makes invoice tracking and management an easy process with a clean and clear overview of your entire financial operation. 

Benefits of accounts payable automation

Of course, switching from a manual to an automated system is not just about reducing errors; there are many other benefits of automation in this field and the financial department as a whole.

For example, MYOB payroll processing is a great way for SMEs to automate payroll management across their organisation while ensuring employee data security and staying compliant with payroll legislation. 

Consider automating accounts payable processes for the following reasons:

• Improved efficiency. Automation streamlines workflows and reduces manual data entry, which saves time and increases accuracy. 
• Cost savings. Reduce the costs associated with manual processing, such as paper, printing and postage expenses. Likewise, reduce the need for labour-intensive tasks, freeing up employee time for other activities.
• Better visibility and control. Automation provides better visibility into accounts payable processes, including tracking invoices, approvals and payments.
• Improved vendor relationships. Improve vendor relationships by ensuring timely payments, reducing errors and disputes, and providing better communication and transparency.
• Scalability. Growing businesses can easily scale automated systems to meet their needs without additional staff or resources.

Whether you’re handling net 30 payment terms of 60-day invoices, or if your invoices differ month to month, a robust automation system can manage everything efficiently and effectively. 

Features of accounts payable automation software

Now that you’re aware of the benefits of this type of automation, let’s take a look at some of the features you want to have in your accounts payable automation system.

Be sure to look for:

• Invoice processing. Capture and extract invoice data from various sources, including paper, email, and electronic invoices. Make sure they have the right automation for GST compliance.
• Workflow automation. Automate approval workflows, route invoices to the appropriate approvers and get alerts and notifications to ensure timely processing.
• Payment processing. Process payments electronically, including ACH, wire transfers, and virtual credit card payments. 
• Vendor management. Store vendor data and get tools for managing vendor relationships, including communication and dispute resolution.
• Reporting and analytics. Get real-time visibility into invoice and payment processing, including reports and analytics that can help you identify areas for improvement and optimize financial processes.
• Integrations. Integrate with other financial systems, such as accounts receivable automation and your accounting software, or your enterprise resource planning (ERP) tool to streamline data exchange and improve financial control.

Now let’s take a look at how to prepare your team for this change and integrate the software seamlessly in your business.

Implementing accounts payable automation

Implementing this kind of automation in your business goes beyond merely getting the software and notifying your employees of the change. If you want to make the transition as seamless as possible and maximize your investment from day one, implement an onboarding process.

First, notify your employees of the upcoming change, and then schedule onboarding and training for the new system.

Make sure to cover all the nuances of the new software to avoid setbacks and ensure continuity.

For example, if you’re paying internationally, your employees should know how to send money abroad while staying within the legal confines of international money transfers, understanding the fees, and more.

The same goes for managing vendors on a centralised dashboard, handling disputes, and pulling data from all transactions to create detailed reports.

Each of these system nuances requires adequate training before implementation and when the software goes live.

Conclusion

There’s no denying that accounts payable automation is an important part of long-term success in the SMB world, especially if you want to maximise every dollar spent on every investment. 

Consider automating your accounts payable processes in 2023 to streamline your financial and accounting departments and take your business forward as a whole.