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accountants and bookkeepers

Guide to Automated Accounts Payable

For businesses, efficiency and accuracy in accounting is important for maintaining competitiveness, especially since handling invoices, payments, and financial records properly is integral to their financial health. 

In this guide, we will delve into the world of automated accounts payable (also known as AP automation), exploring how it works, the benefits, and how to implement it into a business. 

What is Accounts Payable Automation?

AP automation works by digitising and streamlining accounts payable using technology. This helps to transform how businesses handle invoices, payments, and financial data. 

The three main features of accounts payable automation are: 

1. Invoices

With accounts payable automation, businesses will receive invoices over digital channels and convert them to electronic form rather than paper. Electronic invoicing methods include Business-to-Business (B2B) and Electronic Data Interchange (EDI) connections, PDF invoicing, or receipt via a supplier portal. These digital methods facilitate the seamless flow of data. 

For paper invoices, technology like Artificial Intelligence (AI) and Optical Character Recognition (OCR) is employed to scan, extract, and store data in the cloud so businesses can access their paper invoices more efficiently. 

2. Matching and Workflow

After capturing invoice data, automation matches them to purchase orders and goods receipts and then sends them for review or approval by the right teams. Once approved, the invoices are sent to the company's accounting system so they can make a payment. 

3. Archive and Audit

All invoices, digital or paper, are stored safely in the business’s digital system. An audit trail is kept for easy access to past records during financial audits carried out by the ATO. This makes finding invoices easy and accessible from anywhere and anytime.

The Benefits of Automated Accounts Payable

AP automation has many advantages that can massively improve a company's financial processes and overall efficiency. Let’s take a look at the main benefits of automating accounts payable: 

  1. Saves Time - AP Automation speeds up invoice processing, reducing the need for manual work. This saves employees a lot of time.
  2. Enhances Efficiency - Automation makes invoicing and payments smoother, reducing approval times and boosting productivity. Integration with existing systems makes everything work seamlessly.
  3. Increases Accuracy - Manual data entry errors are reduced by validating invoice data, preventing payment mistakes like duplicates or fraud.
  4. Cuts Costs - AP automation reduces the expenses from invoice processing, including labour costs, document storage, postage, and the creation of invoices.
  5. Ensures Compliance - Automation systems follow compliance rules, ensuring transparency and helping prevent issues like duplicate invoices or suspicious activity.

Why Automated Accounts Payable Is Great for Your Clients

As a business advisor or accountant, you have a role in helping your clients become more productive when it comes to their accounting practices. Automated accounts payable can make a big difference for your clients. Let’s take a look at the benefits of automated AP:

  • Time Savings - Automation frees up time by handling time-consuming tasks, allowing your clients to focus on core business activities and enjoy work-life balance.
  • Real-time Cash Flow Insights - Automation works seamlessly with accounting software, providing real-time insights into cash flow, enabling clients to track spending, compare cash flow, and address potential issues.

How to Automate Your Accounts Payable

Here’s an easy process you can use to automate your business clients' AP:

  • Receive Invoices - Use automation software to handle invoices, whether they come by mail, email, or online. Digital invoices can be directly added, and paper ones can be scanned using a mobile device.
  • Track Due Dates - The software helps you manage invoice due dates and sends reminders to ensure on-time payments.
  • Approve and Pay - Invoices can be approved and paid within automation software, making the process faster. 
  • Training and Support - If you're helping your business clients make this change, offer training and support to get them started. With the proper guidance, they can quickly adjust and reap the benefits of automated accounting. 

Select the Right AP Software: QuickBooks Online

Selecting the correct AP software is important to ensuring a smooth transition to automation. 

Never Miss a Payment with QuickBooks

QuickBooks provides a centralised platform for tracking, managing, and paying all accounts payable in one place. Advantages include: 

  • Payment Organisation - QuickBooks allows you to easily view and manage all your bills, providing a clear picture of what you owe and when it needs to be paid.
  • Payment Scheduling - You can schedule payments for their due date or pay earlier to benefit from early-payment discounts.
  • Defer Payments - QuickBooks enables you to defer payments or schedule partial bill payments, helping you manage your cash flow effectively.

Centralise Bill Paying with QuickBooks Plus

QuickBooks Plus goes a step further in organising your client’s bills, providing valuable insights into their financial health. Here's what QuickBooks Plus offers: 

  • Bills Overview - QuickBooks Plus offers a comprehensive overview of all your client’s bills in one place, ensuring that they pay on time, every time.
  • Financial Insights - Gain valuable insights into your overall financial health, facilitating informed decision-making.
  • Efficient Management - Review key reports that help you efficiently manage your accounts payable.

Speed Up the Process with Accounts Payable Automation

QuickBooks Plus also automates the billing process, making it efficient and time-saving. Features include:

  • Recurring Bills - Set up recurring bills to be automatically recorded at a specific time.
  • Automatic Bill Tracking - Stay informed with QuickBooks' automatic bill tracking and recording.
  • Paperless Processes - Reduce the need for paper invoicing with scalable online processes, ultimately saving you time and resources.

Summing Up

As an accountant, introducing your clients to automated accounts payable can go a long way in improving their financial operations. By implementing automation for your clients, you can improve the financial health and security of your clients while giving real-time insights into their cash flow.

If you’re looking for AP software, try QuickBooks. QuickBooks can help your clients maximise the benefits of accounts payable by offering a paperless solution to save time and resources. Sign up for QuickBooks Online today to start your clients on their automated AP journey. 

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