Organizations today face unprecedented challenges and opportunities as markets expand, competition intensifies, and customer expectations rise. This dynamic landscape warrants that businesses constantly seek innovative solutions to stay ahead of the curve. In this
context, the strategic importance of Accounts Payable (AP) automation has emerged as a game-changer for companies seeking to streamline their financial operations and optimize efficiency.
Workflow-as-a-Service
As the business world embraces digital transformation, the adoption of AP automation has become not just a competitive advantage but a strategic imperative for those striving to thrive in an ever-evolving economy.
But what does the AP automation process entail? What can be expected by companies seeking to implement this change?
“Don’t mess with your existing ERPs.” warns Beiing Human (BH) co-founder and AI expert, Rishi Srivastava, “The job of AP automation is to boost efficiency and provide value and ease. Changing ERPs means major disruptions and hefty bills for organizations – the exact opposite of what AP automation strives to do.
BH’s AP Automation software integrates with existing ERPs seamlessly. What you might need to change, however, is your workflow. Enhancing workflows by implementing our workflow-as-a-service solution is a further advantage of utilizing BH’s AP automation software.
Workflow-as-a-service means that the solution is going to offer the customers a new way of processing documents.
The current workflow of construction businesses operating manually looks something like this: The company gets, let’s say, 20 vendor invoices, prints them, gets them manually approved by project managers, and after they scan them, a 20-page PDF document is created. Now, the AP clerk enters this data manually into QuickBooks, or whichever ERP the company is using.
The workflow-as-a-service solution we, at BH, are proposing eliminates the whole process of scanning, whereby the project manager has to approve on paper and then the manual data entry that the AP clerk does. This all goes away.
The AP clerk simply uploads the invoices using the BH software, checks and corrects (if needed) the work of the AI, then passes it on to the project manager who assigns the job and cost code. The project manager passes it on to the controller who then assigns the GL code and cost type (if used). Finally, the controller pushes it to QuickBooks or whichever ERP you currently use. The major benefit of this solution is elimination of manual data entry by 80% and streamlining of the approval process.”
The Might of AP Automation with BH’s Workflow-as-a-Service Solution
Implementing BH’s AP automation solutions significantly enhances workflows and streamlines the accounts payable process within organizations. Our AI utilizes technology to digitize and automate manual tasks associated with processing invoices, making payments, and managing vendor relationships. Some ways in which AP automation in combination with our enhanced workflow-as-a-service enhances existing workflows include:
Cost Savings and Enhanced Efficiency
Implementing business process automation, like accounts payable, leads to significant cost savings. Organizations reduce labor expenses, minimize the risk of errors, and mitigate hard costs related to office supplies and interoffice mail postage.
Based on data from APP2P Network, the average monthly cost of manually processing 5,000 invoices amounts to $64,500. In contrast, automating the same volume of invoices would only incur approximately $8,850 in expenses, resulting in savings of around a whopping 85%.
Moreover, the advanced AI of BH’s AP automation software is designed to guard against some of the most common errors. Manual entry of invoice headers and line-item data becomes unnecessary through automation. Additionally, the invoice data undergoes validation against the enterprise resource planning (ERP) information, simplifying the process of identifying and preventing duplicate payments.
Time Savings on Invoice Processing
Traditionally, invoices sit on desks or wait in email inboxes for approval.
However, with the implementation of AP automation and the associated workflow-as-a-service, these delays are effectively eliminated with a streamlined approval process.
AP automation solutions automatically capture invoice data using AI techniques. This eliminates the need for manual data entry, reducing errors and saving time.
Furthermore, by applying specific rules to the workflow, invoices are automatically directed to the appropriate individuals at the right time.
The usage of programmable reminders further advances this process.
Users access high-level, real-time insights through dashboards, significantly reducing the time previously spent searching for the status of invoices. According to the Aberdeen Group, organizations leveraging AP automation experience an average reduction of about 18% in Days Payable Outstanding (DPO), resulting in savings of approximately 5.55 days on average.
Faster and Sustainable Electronic Payments
Instead of relying on traditional paper checks, AP automation enables electronic payment methods like ACH transfers, virtual cards, or electronic funds transfers (EFTs). This speeds up the payment process and improves cash flow management.
By transitioning to digital processes, AP automation helps reduce the reliance on paper, making the workflow more environmentally friendly and cost-effective.
Addressing the construction industry in particular Mr. Srivastava says,
“With the new era of remote work and dispersed teams upon us, the main thing is you don’t want to be paper reliant. A lot of companies in the construction industry are doing things on paper when digitization and remote work is becoming mainstream. This definitely makes workflows inefficient and complicated.
If the AP clerk is passing a piece of paper to the project manager for the job and cost code assignment, that is a bad workflow. It depends upon people being in the same location, the paper moving, instead of a simpler workflow.”
Integration with ERP Systems
BH AP automation solution seamlessly integrates with organizations’ existing ERP (Enterprise Resource Planning) or accounting systems. A crucial benefit, as selecting the perfect construction ERP for the organization is a very complex procedure in itself.
This integration ensures that data is synchronized across systems, reducing manual data entry and potential discrepancies.
Commenting on this Mr. Srivastava says,
“I think it’s very important to constantly update and customize. We are bringing in more and more integrations as our customer base is expanding.
‘Foundation’ is a new integration that we are going to be adding.
It’s going to save our users a lot of time. They don’t have to provide information manually to the BH system. We can just go and look at Foundation and extract information from tables – like the vendors and the transactions. These look ups enhance the extracted data from the invoices further so the user has to do even less work”
Enhanced Transparency, Insights, and Real-Time Visibility
With AP automation, organizations track the status of invoices, pending approvals, and payment schedules, allowing for better financial planning and decision-making.
Through comprehensive dashboards, BH’s AP automation software offers better insights into the payment cycle. This clear window allows easy tracking of invoice status and identifies the appropriate contact person to address any delays. Real-time data import and export capabilities facilitate seamless reporting and analysis, which is particularly valuable during the end of business cycles. This is particularly useful as efficiently managing financial statements is crucial to organizational success.
There is improved data transparency, as enhanced dashboards facilitate effortless monitoring of employee productivity. This feature proves beneficial during employee reviews, as managers utilize the tool to track both individual and team performance and productivity.
Availing Payment Discounts through Vendor Management
Despite vendors offering early-payment discounts, the Institute of Finance Management (IOFM) reports that a significant majority of businesses, approximately 88%, fail to capture these discounts. The PayStream Advisors’ AP & Working Capital Report cites 31% of respondents decrying manual routing of invoices for payment and approval as a significant obstacle in securing early-payment discounts.
AP automation facilitates better vendor management by centralizing vendor information and communication. This leads to improved vendor relationships and more favorable payment terms.
Easier Audit Trail and Compliance
Automation creates a digital audit trail of all AP activities, making it easier to track and review transactions for auditing purposes. Additionally, automated processes enforce compliance with company policies and regulatory requirements.
The system efficiently connects all relevant documents and messages associated with each transaction, while also ensuring accurate matching of invoices with purchase orders and receipts. This searchable audit trail significantly minimizes the risk of misplacing essential paperwork. Moreover, the software aids in maintaining regulatory compliance during quarterly or annual filings.
Cost-effective Data Storage
The IRS advises retaining records for a duration of up to seven years. Storing all this paperwork results in significant expenses. North Dakota’s Information Technology Department estimates that maintaining a single standard five-drawer file cabinet costs an average of $2,603.64 annually. In contrast, preserving an entire terabyte of data is as affordable as $6.99 per month.
Fraud Protection
An eye-opening 81% of companies experienced payments fraud in 2019 according to the AFP Payments Fraud and Control Survey.
By implementing BH AP automation software, organizations fortify their defenses against fraud by regulating access to invoice approval and payment release. Constructing approval workflows involving multiple individuals enhances the likelihood of detecting fraudulent invoices before processing payments. With this process management system, no single employee has the sole responsibility of approving payments, significantly reducing the risk of fraud. Moreover, the system allows for cross-validation to identify any missing or inaccurate data, providing an additional layer of protection against fraudulent activities.
Automation and Beiing Human
Employing AP automation requires an efficient implementation of a workflow-as-a-service solution. Through the joint capabilities and experience of BH co-founders Rishi Srivastava, as an AI expert, and Luke Nelson, as CFO of major organizations throughout the US, they have created a masterpiece that has helped organizations boost revenue and operations in hard numbers.
At BH we emphasize the importance of careful planning, selecting the right software, implementing our specialized workflow-as-a-service, and ensuring proper training for employees when it comes to AP automation. The benefits it offers in terms of enhanced workflows, increased productivity, and improved financial management make it an investment that pays for itself tenfold.
Counseling entrepreneurs Mr. Srivastava says,
“The main advice I can give is that being willing to change and adapt to new technology is how we as humans have grown so far.
And this is not a huge change. The workflow-as-a-service we offer is all about improving organizations’ existing workflows.
We strongly believe that a simpler and more intuitive interface is the way to go. And workflow-as-a-service, as we are designing it, we are mindful of the usefulness of our UI.
Furthermore, our workflow-as-a-service solution is constantly improving based on user feedback and it’s really user-friendly.”
Overall, the benefits of improving workflows through AP automation are comprehensive, ranging from increased efficiency and cost savings to improved accuracy and enhanced vendor relationships.
By harnessing the power of cutting-edge AI technology, BH’s AP automation revolutionizes traditional accounts payable processes, liberating valuable resources, enhancing accuracy, and providing real-time insights that empower organizations to make data-driven decisions.
