What is accounts payable software? Get the facts about AP automation
- 28 Sep 2020
- Category 1
What is accounts payable software? Simply put, accounts payable software is the system used for financial and accounting processes. Choosing the right accounts payable software solution eliminates manual accounting tasks, streamlines AP operations, improves accuracy, enables control of important financial processes, and automates routine processes. Plus, AP automation provides users with important notifications, which help to avoid penalties associated with late payment or failure to comply with applicable regulations. Best of all, accounts payable software gives the AP team and C-suite greater control over the company’s numbers.
Save time and stay in the game
AP software eliminates the tedious manual processing that overworks your team and reduces their productivity. Tasks performed via AP automation are completed in a fraction of the time it would take to complete them manually, freeing the AP team to work on strategic initiatives. Saving time helps companies save money and stay in the game as companies around the world adopt AP automation solutions with remote work becoming part of the new normal post-pandemic. It is crucial to choose tailored accounts payable software that does exactly what your organization needs in order to ensure the smoothest possible transition from manual processing.
However appealing it may seem, a one-size-fits-all software solution is almost never the right choice for optimum productivity, flexibility, and scalability. Take into consideration all the features the software offers and verify that the problems it solves are matched with your business’ most important needs. In general, accounts payable software batches and sorts invoices based on captured invoice data, generates analysis reports, provides approval workflow, performs document imaging, and manages relevant financial content. AP automation also ensures compliance to avoid fees and fines due to a lack of control over financial data and operations. And AP automation makes auditing a process that once took endless hours and effort to complete, a breeze.
Discover the various types of accounts payable software
Once the AP team and C-suite recognize the need to transition to AP automation, it’s essential to understand the various types of accounts payable software tools currently available, including:
- On-premise software that is hosted on the company’s local server.
- Cloud-based Accounts Payable software that is automatically updated and provides universal access without the need to pay for ongoing maintenance.
- Software-as-a-service (Saas) AP programs that are hosted on the provider’s server and paid for by the company on a monthly, quarterly, or annual basis, which overlaps somewhat with cloud-based AP programs.
- Built-in automation within the ERP (which typically comes out of the box with the ERP for light/minimal efficiency gains - this is not the most accessible or robust solution).
Financial teams around the globe are discovering the benefits of cloud-based accounts payable AP automation - from access to data from anywhere in the world to fast payment approvals, real-time data, and automatic updates so the software is always up-to-date. Using accounts payable software plays a significant role in the necessary digital transformation. As more organizations adopt AP automation, clients, stakeholders, and vendors will expect your organization to use it, too.
Act based on the financial facts
Automation has put an end to the days of estimates and projections. With cloud-based AP automation and customized accounts payable software, the C-suite and financial team have instant access to pertinent financial data in real-time. This level of access makes collaboration easy, regardless of location and time. Having the latest data helps the team make educated decisions based on financial facts rather than speculation.
With the smart use of accounts payable software, companies gain total control over their transactions for optimum accuracy. Everyone on the team can work with timely data to best manage cash flows with immediate access to balances, bills, invoices, and vendor data. Other options that improve financial control include the ability to generate comprehensive reports, manage inventory, and claim expenses. And maximizing the use of all of these features helps companies boost working capital.
Discover the benefits of accounts payable software
Companies are recognizing the benefits of choosing the right accounts payable software. One such benefit is the minimal investment needed to realize a measurable ROI, often within a year. Such a rapid ROI is a direct reflection of a targeted, streamlined solution - a best-of-breed solution that tackles a distinct part of the financial process in accounts payable. Plus, cutting-edge AP automation solutions are quick to deploy and involve a minimal learning curve.
Accounts payable software helps organizations achieve a higher level of efficiency and accountability, while also saving time and human resources. The AP team enjoys a better quality of work, focusing on thoughtful tasks such as finding money-saving opportunities from vendors. Sophisticated software offers a full range of features to maximize an organization’s resources and maintain optimum accuracy in operations. And it reduces or eliminates the errors associated with manual processing.
Companies without accounts payable software will be left behind
Accounts payable software can be classified into two types: the cloud/SaaS/web-based type and the installed type. According to the Digital Journal, the revenue market of cloud/SaaS/web-based accounts payable software comprised over 88% of the global market in 2017. North America and Europe are the two largest consumption regions of accounts payable software in the world in recent years. Experts expect this number will continue to increase, which means failure to adopt automation will leave a company in the dark ages of AP processing.
The global accounts payable software market is expected to reach $1,680 million by the end of 2024. Failure to adopt AP automation now means being left behind in the near future, as other businesses realize the speed, efficiency, and accuracy of using accounts payable software. There’s no better time than the present to shop around for AP automation solutions; there are options to fit into any organization’s operations and budget.
AP automation is here to stay, especially as remote work and collaboration in the cloud become part of the new normal in business. Instead of questioning its value, embrace the possibilities. After a fast learning curve, the advantages of adopting AP automation become evident. And within a year, they will be measurable, making a difference in the profitability of your company. Start planning for the digital transformation now to avoid scrambling to find a solution after your competitors have already found one.