What is AP automation?
AP automation is enterprise software that streamlines supplier invoice processing, eliminates the potential for human error due to paper processes, and provides both visibility and control over invoice approval business processes.
What are the functions of AP automation?
The most common AP automation solutions include functionality such as invoice data capture (also known as OCR or digital invoice scanning), invoice processing, approval workflow, PO matching, a system for auditing and archiving, detailed reporting, and cost analysis.
Does AP Automation software connect to an organization’s ERP?
AP automation software has to seamlessly integrate with an organization’s ERP. Data is passed back and forth between the two systems, and invoices are sent to the ERP for payment once they have been approved.
What is invoice data capture?
Invoices received by mail or email are scanned by the software and sent to the ERP and AP Automation function. Paper invoices are scanned with 95% accuracy rates, and email invoices that are in electronic format such as PDF, EDI, XML, CSV, Word and Excel are scanned with 100% accuracy.
What is invoice processing?
Supplier invoices are visible in a central dashboard showing invoice status in real time. Predefined business rules dictate where invoices are sent for employee/manager approval.
What is 3 way PO matching?
Intelligent AP automation platforms address PO and Non-PO matching, where the software automatically matches an invoice to the PO and/or goods receipt. Matched invoices are sent to the ERP for recording after being matched by the software.
How does AP automation manage exceptions?
Exceptions are flagged and sent to the people in charge of the order. In place of phone calls, emails and spreadsheets, the exception is automatically sent to approvers by email and on mobile. Approvers get all of the information they need to review the invoice along with notes from team members.
How does AP automation help with audits?
An archive and audit function keeps a record of every transaction, including communications.
AP Automation has 3 key benefits for businesses and organizations:
> Reduces the cost of invoice processing, PO matching, and other outdated manual business processes.
A company’s relationship with suppliers is important. An essential aspect of managing that relationship is the timely payment of accounts. Factors such as human error during data entry, lost and duplicate invoices and the unavoidable slowdowns due to processing are avoidable with this technology in place.
> Reduces the risk of fraud by providing visibility into the status, approval, and transactions around supplier invoices.
For companies still committed to paper processes there are many moving parts with all of the paperwork and paper processes. This is very difficult to track and is prone to abuse.
> Reduces the time involved in approval cycles and payment times, reducing late payment penalties as well as taking advantage of early payment discounts.
Issuance of payments can be dragged out for weeks when it’s possible to have payments approved in one or two days. Automating the process increases operational efficiency.
Compliance and Security
Compliance and security are major considerations when making technology investments in finance operations. Organizations choose to consider AP automation software platforms that are accredited or compliant with HIPAA, SOC1, SOC2, GDPR, ISO 29001, ITAR, and PEPPOL.
For more information about Palette AP Automation, visit our solution page here.