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In today’s environment of constant flux and extreme competition, organizations need to leverage every available advantage in strategy, cost, or time to stay ahead of the curve. Accounts payable automation plays a crucial role in tracking invoices process, payments, and overall spending, making it a significant opportunity for cost savings.

Beyond this, AP can provide companies with actionable data essential for strategic decision-making. However, to fully establish itself as a strategic contributor within the organization, Automated Accounts department must be supported by strong foundational practices.

This blog explores four key pillars that support and enhance the contributions of the AP function, allowing it to evolve from a transactional role into a strategic asset.

4 Pillars of Accounts Payable Automation:

1. Supplier Master Data Management: The Backbone of Efficiency

One of the foundational aspects of an efficient Automated Accounts Payable (AP) department is the effective supplier management data. According to the 2017 Zycus eInvoicing Report Card, 6 out of 10 companies manage and update supplier records, a task that is often tedious, time-consuming, and prone to errors. Poor supplier information management can lead to duplicate payments, missed invoices, and strained supplier relationships management, impacting the organization’s bottom line.

Supplier Master Data Management (SMDM) systems offer an automated solution to this problem. By allowing suppliers to enter and update their information through a self-service portal, SMDM reduces the administrative burden on AP departments and ensures that data is accurate, up-to-date, and de-duplicated. According to Gartner research, AP automation can save up to $850 per supplier annually by streamlining data management processes.

Automated SMDM provides Automated Accounts department with accurate, real-time data that can inform strategic decisions, such as supplier performance evaluations, negotiation of better payment terms, and identification of potential cost-saving opportunities. It transforms AP into a data-driven function capable of contributing valuable insights to broader business strategies.

2. Electronic Invoicing: Accelerating Processes and Enhancing Communication

Electronic invoicing (eInvoicing) is a game-changer for AP departments seeking to reduce manual workloads and improve procure to pay cycles. Traditional invoicing methods, often reliant on paper and manual data entry, are not only slow but also error-prone. eInvoicing automates these processes, allowing invoices to be received, processed, and approved electronically.

Organizations using eInvoicing significantly reduce invoice processing times, enhancing cash flow management and increasing overall efficiency in Automated Accounts Payable systems. A major challenge for Accounts Payable teams is managing frequent supplier inquiries regarding payment status. eInvoicing addresses this by providing suppliers with end-to-end visibility into the invoicing process. Suppliers can track their invoices, see where they are in the payment cycle, and even choose from multiple invoice formats that best suit their needs.

Moreover, eInvoicing fosters better communication between suppliers and the AP department. With real-time access to invoice data, suppliers no longer need to make multiple calls or send follow-up emails, freeing up valuable time for AP professionals to focus on higher-value tasks.

3. Touchless Processing: Eliminating Manual Interventions for Seamless Workflow

Touchless Processing is an advanced AP automation feature that enables end-to-end invoice processing with minimal human intervention. According to the PayStream Invoice Workflow Automation Report, organizations often spend 1-3 hours per week dealing with manual invoice processing issues, such as duplicate entries, manual errors, and multiple supplier calls. These inefficiencies consume both time and financial resources, detracting from the AP department’s strategic potential.

Touchless Processing addresses these challenges by automating invoice matching, exception handling, and approval workflows. Invoices are automatically scanned, validated, and routed through the system without the need for manual oversight. This not only reduces errors but also accelerates the entire process, allowing AP departments to handle larger volumes of invoices with the same or fewer resources.

The impact of Touchless Processing extends beyond operational efficiency. It provides AP teams with enhanced visibility into invoice statuses, enabling them to identify and resolve issues more quickly. By minimizing manual interventions, Automated Accounts department can capture more early payment discounts, optimize cash flow, and contribute directly to the company’s financial health.

4. Dynamic Discounting: Maximizing Savings and Optimizing Liquidity

Dynamic Discounting is an AP automation feature that allows organizations to extract maximum savings from discount opportunities by offering suppliers early payment options. This approach not only optimizes liquidity but also strengthens supplier relationships by providing them with greater financial flexibility.

Dynamic Discounting software enables AP departments to customize discount terms based on cash flow needs and supplier preferences. For instance, AP can offer a higher discount rate for early payments when cash reserves are high or adjust terms during periods of tight liquidity. This flexibility helps organizations maintain a healthy cash flow while achieving significant savings.

Furthermore, Dynamic Discounting provides intuitive, real-time metrics to track savings goals and monitor the financial impact of discount programs. By actively managing discount opportunities, AP departments can align their payment strategies with broader business objectives, contributing to a more strategic use of company funds.

Building a Future-Ready Accounts Payable Department

Regardless of where your AP department stands today, its future is poised for transformation as it gains more strategic importance within the organization. To maximize AP’s ability to provide valuable strategic inputs, Automated Accounts department is indispensable. The four pillars discussed above—Supplier Master Data Management, Electronic Invoicing, Touchless Processing, and Dynamic Discounting—are essential for building a robust, efficient, and strategically aligned AP function.

By embracing these pillars, organizations can turn AP from a cost center into a strategic powerhouse, capable of driving significant value through improved efficiency, cost savings, and enhanced decision-making capabilities. A future-ready Automated Accounts Payable is not just about processing payments; it’s about leveraging technology to deliver insights, optimize cash flow, and contribute to the organization’s overall success.

Learn More About Accounts Payable Automation

To dive deeper into these four critical pillars of AP automation, read our report titled “4 Pillars To Accounts Payable Automation.” For more insights and hands-on experience, request a Zycus e-Invoicing demo today. Discover how Zycus’s innovative solutions can revolutionize your AP processes and position your organization for long-term success.

To get started with Accounts Payable Automation, request a demo today! Our experts will guide you through the process and show you how Zycus can help streamline your accounts payable process.

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