Digitized accounts payable have become necessary for all growing businesses as it enhances efficiency, cost savings, and transparency. Let’s explore the top reasons for organizations to embrace digitization in accounts payable
Why is it Important to Digitize Accounts Payable?
Eliminate Manual errors
When your AP processes are still manual, the chances of error happening increase manifold. Your team is loaded with invoices, and missing a few steps is normal. Typically, in a manual process, the chances of the invoice getting lost, duplicate payments, or fraud happening increase when the volume of invoices increases. The entire process becomes time-consuming and results in delayed payments. Data verification becomes difficult. This is where AI-led digitized Accounts payable processes help. The AI/ML capability of the software speeds up the invoice-matching process and identifies frauds and duplicate payments. It also reduces the time to process an invoice by more than 50%.
Be more environment-friendly
Global deforestation is a massive problem facing the entire ecosystem, and paper invoices and checks add to the woes. As per Ardent partners report,
- One tree = 8,500 pieces of paper
- 1 million invoices = 118 trees
- 1 million invoices = 36 tons of carbon dioxide (CO2) footprint
- 1 billion invoices = 118,000 trees
Paper invoices produce three times more CO2 than e-invoices, making e-invoices a preferred choice for sustainability.
Digitizing accounts payable reduces the need for paper invoices, checks, and other physical documents and helps make it easier to manage and track financial operations. It also reduces the chances of misplaced documents.
Digitizing the AP process provides more visibility into finance and operations across roles and businesses. Digitized AP automation solutions provide real-time updates and notifications regarding invoices, payments made, and exceptions, which gives you better control and makes informed decisions. The chances of discrepancy and fraud also reduced significantly. The real-time dashboards provide insights into the invoice status, DPO, and discount offers across departments and roles.
AP processes have a significant role in strengthening supplier relationships. Digitized accounts payable enables information about all invoices and payments in one system, and the bot can reply to all the supplier queries, including the status of the payment dues. Suppliers must run pillar-to-post in manual processes to get answers to their queries. Digitized accounts payable reduce the risk of late payments and disputes. Not only that, but digitized accounts payable ensure fewer or no errors and faster payments. This enables the enterprise to foster good supplier relations, enabling better vendor management.
Enterprises operating in multiple geographies must adhere to varied tax and e-invoicing compliance regulations. A digitized AP automation solution helps ensure adherence to these invoicing rules. It provides a clear audit trail for better governance and global compliance, thereby reducing the risk of penalties.
Manual invoice processing takes more time to capture details and process payments. You require more FTEs (Full Time Employed) for a higher volume of invoices. The cost of processing per invoice is between $12-$15/invoice. With digitization, you can free up your employees’ time and move them from tactical to more strategic work. Through Digitized AP automation, you can reduce the processing time by 50% and the processing cost by nearly 65%. Digitized AP automation takes care of the increased volume of invoices. The usage of electronic payments like virtual cards also helps in reducing in-efficiencies and delayed payments.
Capture more discounts
Suppliers typically offer discounts if their invoices are paid on time. However, with manual AP processes, enterprises can never take advantage of this and save costs. However, with digitized accounts payable, this becomes a reality with the dynamic discounting software feature. Dynamic discounting is a financial agreement where the buyers can pay the invoices before the agreed date in exchange for a discount. This helps the enterprises have efficient cash flow management, effective vendor management, and reduced expenses and helps the vendors in effective working capital management.
Getting started with Digitized Accounts Payable automation- How can Zycus AP automation help?
The Zycus Accounts Payable Automation Software targets holistic AP transformation by leveraging the AI/ML capabilities of the Zycus Merlin AI platform.
Key features and benefits associated with Zycus AI-led AP Automation Solution include:
Time and cost savings:
Zycus has a template agnostic approach to invoice extraction and has an accuracy of 95% up to line items. Using Zycus, you can reduce your invoice processing time by 50% and the invoice processing cost by up to 65%. It helps to deliver a higher rate of straight-through processing (STP).
Better supplier communications:
Automated email review and reply via AP Smart Desk that frees up your AP team time strengthens supplier communication, and improves vendor relationships. There are no more missed emails, and suppliers get answers to all their queries on time. By using an AP smart desk, one can save up to $2.7/email.
Anomaly and fraud detection:
Identification of potential fraud cases (duplicate invoice, phantom supplier, etc.) plus safeguards against phishing and spoofing
Zycus e-invoicing software helps you comply with all global e-invoicing compliance, tax regulations, and content compliance in association with a third-party tax engine. With Zycus, it becomes easier to operate in multi nations and be compliant.
- AI-led AP Automation for Anomaly and Fraud Detection
- AP Workflow Automation: From Tedious Tasks to Automation-led Time and Cost Savings
- Paperless Accounts Payable Best Practices
- Webinar – Driving AP Transformation and Cost efficiency with AI-led Automation- EMEA webinar
- White Paper – 4 Pillars to Accounts Payable Automation