Automated Invoices for Planning Made Simple

Automated invoices for Planning

Face it: Paying bills as a business can be painful. That fat stack of supplier invoices shows up every month, and going through each one manually is labor-intensive, error-prone, and a contributor to rising operating costs. But it doesn’t have to be that way. With accounts payable – or AP – automation, routine tasks such as invoice processing, matching, approval, payment and reconciliation are all simplified. How? Let’s break it down. An automated AP workflow happens in five steps: First, when an invoice is received, it’s scanned, digitally converted and automatically entered into the accounting system using optical character recognition or OCR – eliminating the need for manual data entry. Second, the AP automation software categorizes the invoice and creates the appropriate general ledger codes. Then, the software performs three-way matching to check the invoice against purchase orders and receipts and ensure all documents match. Any discrepancies will be flagged for manual review. Those without issues will be entered into the general ledger. Fourth, the invoices are routed to the appropriate manager or department for review and approval. Approval workflows can be customized so low risk, low value invoices are automatically paid if the amounts are close to previous payments. Lastly, once invoices are approved, the AP software makes the payment. It will automatically inform vendors when payments are made and by what methods. An automated AP system even facilitates bank reconciliation after the process is complete to ensure that internal payment documentation matches bank records. Automating accounts payable plays a crucial role in increasing the operating efficiency of a business. By eliminating time-intensive, manual tasks, companies boost productivity, reduce costs and increase accuracy.