Why Do Businesses Need to Automate AP and AR Now?

accounts payable

By automating AP and AR, the whole process can get faster and less error-prone

Automation in the business system is transforming slow and repetitive processes that normally waste hours or even days. We have been looking for digital solutions to automate accounting for a long time. Now, the time is ripe to adopt technology in the company’s finance department. Automating accounts payable and receivable process is on-line to see greater encroachment soon.

A successful business runs on two grounds- a great team and heavy cash flow. Even though the process to automate human labor is on the primary stage, managing cash flow through digital means has taken off from the ground. Organizations show higher importance to cash flows. Companies often put more employees to manage lengthy finance works, which a machine can do in minutes. Manually managing accounts payable and receivable is hugely draining and takes talent skills away from the most productive tasks. By automating AP and AR, the whole process can get faster and less error-prone. According to a survey named Digital Shift Report conducted by PYMNTS’ in December 2020, 91% of the US financial executives are investing in financial technologies intended to help with new remote operations. The firms were specifically interested in deploying automated and advanced learning technologies. Around 67% of respondents were actively adopting AI and machine learning or considering doing so, and 74.2% were considering or currently spending on AP and AR automation.


What is accounts payable automation?

Accounts payable process refers to tools or processes that eliminate manual aspects of accounts payable and instead automates them. This usually involves dedicated software that transforms the accounts payable process. Remarkably, AP automation lets users submit and approve purchase orders and invoices digitally, rather than dropping them physically in in-trays. It also nullifies the data entry jobs that consume employees’ time.

Automating the invoice approval and PO matching process eliminates the need for human intervention at this step of the process unless it is necessary. Invoices can be automatically routed to the appropriate approver, with automated follow-ups that remind them of upcoming deadlines. By automating the data entry process, the time and cost that comes with getting all the invoice data coded into the user’s system can be minimized. Through AP automation, the execution of payments is also digitized. Approved payments can be scheduled and automatically sent out on the proper date. Companies often seek software providers to help to embrace the process. Some of the top AP software providers are,

  • NetSuite- NetSuite is a cloud ERP solution, providing a unified platform to streamline all back-office processes like accounting, CRM, and eCommerce.
  • Kissflow Procurement Cloud- Kissflow is a flexible procurement solution that has everything from purchasing to vendor management, all in one platform.
  • TYASuite- TYASuite Cloud ERP Solution is a plug and plays platform within integrated modules to help users manage, monitor, and execute their business processes.


What is accounts receivable automation?

Accounts receivable automation is the modernization of accounts through automated electronic systems in order to reduce repetitive and time-consuming tasks. AR automation frees-up time for AR teams to focus on higher-value work such as chasing payments and getting the cash in quickly, and mitigating bad debt, rather than printing and posting paper invoices.

Automating the accounts receivable process gets invoices to your customers quickly, accurately, and efficiently. It lets the AR team focus on more profitable activities, removing the cost of manually creating, sending, or uploading invoices to AP portals. Fortunately, AR teams can also dedicate more time to chasing payments and handling exceptions while automating the AR process. Some of the top AR automation software providers are,

  • com- Bill.com delivers financial process efficiency to small businesses and mid-sized companies through streamlined accounts payable and accounts receivable management.
  • YayPay- YayPay is a cloud-based predictive account receivable automation solution that leverages data and automatic payment communications to accelerate collections.
  • Upflow- Upflow is a simple and powerful SaaS solution to manage business accounts receivables and improve its cash collection.


Why all is not good?

Automating AP and AR is not the end of human surveillance. According to the new Digital Shift Report, ‘many businesses may think that their AP processes, although not perfect, are working fine. This way of thinking can cost the business a lot of money.’ The human-to-human interface and understanding that a business carries are totally jeopardized in the process, leading to suppliers stopping deliveries to buyers on slightly bad payments. It can also kill potential volume discounts, require additional stag and drive up the cost of processing.