Cash flow is one of the most important aspects of any business. Without a steady influx of cash, your business will quickly run into trouble. One way to help improve your company’s cash flow is by automating your accounts payable system.
In this blog post, we will discuss five benefits you can expect when you automate your AP process.
What is AP Automation?
AP automation is the process of automating the accounts payable function within your business. This can be done through a variety of methods, but typically involves using software to streamline and automate the tasks involved in AP processing.
There are many benefits that come with automating your accounts payable system beyond just improving your business’s cash flow. For more information on AP automation solutions, check out our blog. We have tons of articles to help you understand the ins and outs of automated AP processing, like The Accounts Payable Glossary: Everything You Need to Know About AP Automation.
Now let’s get into AP automation’s impact on your business’s cash flow.
Payment Processing Made Simpler and More Direct
One of the main advantages of automating your accounts payable process is that it makes payments simpler and more direct. When you automate your AP process, invoices are matched to purchase orders and payment history using Intelligent Data Capture (IDC).
Intelligent Data Capture is much faster and more accurate than manual data inputting. This allows you to make payments electronically with great accuracy and little room for error.
With AP automation, your invoice cycles will be sped up significantly, cutting your processing cost per invoice by 86%.
By processing more invoices per month at a lower cost, your business will also have the opportunity to grow and scale with more vendors and suppliers.
This also gives you the opportunity to take advantage of cash-back rebates and early payment discounts that your vendors may offer. In addition, you can avoid costly late fees and interest by making sure that payments are processed in a timely manner.
Reduce Processing Costs with AP Automation Software
Another way that automating your accounts payable system can improve cash flow is by reducing your processing costs.
In addition, automating your AP process can help you avoid the costs associated with mailing paper checks. Automating your accounts payable process allows you to make electronic payments, which are less expensive than writing and mailing paper checks because fewer supplies and staff time is needed to make a payment.
Try out our ROI calculator see just how much your business can lower costs
Eliminate Data Entry Errors
As we mentioned before, one of the benefits of automating your accounts payable process is that it can help you eliminate data entry errors.
When you automate your AP process, invoices are automatically imported into the system. This means there is no need for manual data entry, which can lead to errors like overpayments, duplicate payments, and late payments.
In addition, automating your AP process can free up your payable department to verify accurate payments were sent on time. This can help you avoid any disputes with your vendors or suppliers.
Improve Your Relationship with Vendors and Suppliers
Another way that automating your AP process can improve cash flow is by improving your relationships with your vendors and suppliers.
When you automate your AP process, you can provide your vendors and suppliers with accurate information about when their invoices will be paid. This can help to build trust and improve communication between you and your vendors.
In addition, by automating your AP process, you can show your vendors that you are committed to timely payments and long-term business relationships. This can lead to early payment discounts or other incentives from your vendors.
Increase Visibility into Your Business’s Cash Flow
Finally, automating your AP process can help you increase visibility into your business’s cash flow.
When you automate your AP process, all invoices and payments are stored in one central location on the cloud with real-time visibility into accounts payable KPIs. This allows you to easily track your spending and compare it to your budget.
In addition, automating your AP process can help you identify opportunities to improve your cash flow. For example, if you see that a particular vendor always pays late, you may want to consider finding a new vendor.
Automating your accounts payable process can help you improve your cash flow in many ways. By making payments simpler and more direct, reducing processing costs, eliminating data entry errors, improving your relationships with vendors and suppliers, and increasing visibility into your business’s cash flow, you can take control of your finances and ensure that your business is running smoothly.
If your business is looking for a solution to your cash flow challenges, then AP automation software should be at the top of your list. Our team of expert digital consultants at Mosaic will work will you to find an all-in-one AP solution tailored to your cash flow management issues.
Contact Us to get started today!
