Accounting automation has been on the agenda for most businesses over the past decade. Even before the pandemic, companies knew that automation, particularly with AI, provided optimized business operations and freed up time for workers to be creative.
In fact, there are many areas of improvement in the actual accounts payable process. We know, for example, that 60% of AP professionals feel that the invoice processing and approvals take too long. But they are also struggling with a high degree of exceptions and lack of status within their organization.
Essential accounting software like a state-of-the-art ERP isn’t enough, however. To really make the most of AP transformation, automation is critical to truly freeing up AP departments.
But what does a best-in-class AP automation software look like?
There are dozens of accounts payable automation software vendors out there. But determining which features will have the most bang for their buck is often a challenge.
5 AP Software Features for the Next Decade
When it comes down to it, there are really five main features that are must-haves for the decades ahead. The last thing any AP team wants is to switch to a new automation software every couple of years, and these features are all based on longevity.
To truly transform an AP workflow, it’s critical for teams to think about more than just faster invoice approvals. The technology and mindset behind the AP automation software are just as important.
1. Built for Remote Work
In 2020, the onset of lockdowns across the globe meant that any AP department might find itself working from home. With around 34% of employees saying they prefer to work remotely, and would leave their job if forced to return to the office, working from home is here to stay.
Therefore, one of the most important aspects of solid accounts payable automation software is the ability to work from anywhere. Cloud-based programs make it easy to sync data across devices worldwide. Furthermore, cloud-based platforms with APIs and integrations can plug into any ERP, making it a cinch to onboard the new solution.
2. Global Compliance for Invoicing Processing
From e-invoicing mandates to VAT and GST, global compliance regulation continues to evolve and grow more complex. Yet in 2018 alone, up to 70% of VAT documents had errors. It’s easy to see why.
Manual processing is prone to error. And even automation tools with low straight-through processing (STP) rates result in a high number of exceptions. Generally, an average automation platform has a 21.2% STP rate, which is abysmal compared to the best accounting software solutions. Best-in-class solutions typically offer a 67.2% rate, meaning that an AP team with this software deals with 3.2x fewer exceptions. For VAt and e-Invoicing compliance, this faster workflow is ideal.
To ensure higher STP rates and lower exceptions, we use technologies like Computer Vision, Artificial Intelligence, and Machine Learning to capture information from any format and reconcile that data with financial transactions.
3. Reduce Paper Invoices
For the accounts payable process, it’s essential to ensure that every step of the invoicing process is auditable. But this is nearly impossible to do with paper invoicing and receipts. That’s why another feature of the ideal AP automation solution is to remove paper entirely. While your AP software should be able to capture invoice data from traditional PDFs or scans, reducing paper invoicing will speed up the approval workflow. It will also reduce the likelihood that your AP team will need to manually review incoming invoices.
Furthermore, paperless AI software provides improved accuracy – in some cases, as high as 99%. This means not only are invoices being processed faster but errors are almost eliminated.
4. End-to-End Workflow
Any accounts payable department has probably experienced a disjointed or confusing workflow. You know the ones – signing in and out of multiple programs, trying to remember shortcuts on each individual software, and then data gets lost in the middle. Invoice approval and processing should be simple, and ideally within one platform.
That is one of the reasons so many financial professionals are zeroing in on end-to-end platforms or platform ecosystems.
Ideally, your AP automation solution should not only plug into your ERP, but it should also extract, verify, reconcile, and analyze data from beginning to end.
5. Automated AP Transformation
Finally, true AP transformation cannot be achieved if the AP team has to monitor the software 24/7. Intelligent automation creates an environment where a platform learns and improves its algorithm over time, with very little human interference. This reduces the number of manual tasks required to maintain the software and ensures that the program becomes more accurate over time. In a sense, not only is the invoice approval workflow automated but so is optimization
The Next Step to Automating Your AP Workflow
Accounts payable is the backbone of the business. It can solidify good relationships with vendors and streamline cash flow. However, to really make a difference, accounting professionals should not be stuck with manual data entry. Investing in a completely digitized, highly accurate and comprehensive AP automation tool can free up time and resources so your finance professionals can focus on high-level tasks.
Itemize is an end-to-end accounts payable automation software that uses intelligent automation to streamline workflows and maintain compliance. Through the use of AI and machine learning, our AP platform has an accuracy rate of up to 99% and completes hours worth of work in minutes.
To learn more about how you can bring long-lasting change to your AP department, book a demo with us today.