Modernizing Money Management: The Shift from Manual to Automated AP Processes

By Laurent Charpentier.

Goldman Sachs recently estimated that automating Accounts Payable processes can result in time savings of 70-80% for small and medium-sized businesses. Efficient accounts payable (AP) processes are crucial for maintaining a healthy cash flow and fostering strong relationships with suppliers.

However, many organizations still rely on manual AP systems that are time-consuming, error-prone, and lack the visibility needed for strategic decision-making. As companies look to streamline their operations and stay competitive, automated AP solutions can be a game-changing tool for modernizing money management.

The Challenges of Manual AP Processes

Traditional manual AP processes involve a significant amount of paperwork, data entry, and back-and-forth communication between departments. These labor-intensive tasks drain time and resources and increase the risk of human errors. A misplaced decimal point or a missed payment deadline can damage vendor relationships and lead to costly penalties.

Manual AP systems often lack the real-time visibility needed to manage cash flow effectively. Finance teams may struggle to get a clear picture of outstanding liabilities and upcoming payment obligations, making it difficult to manage working capital and make informed financial decisions. Manual processes also make it challenging to maintain regulatory compliance and ensure proper documentation for audits.

Key Benefits of Automated AP

As the CEO of Yooz, and prior senior positions with Accenture and Dell, I believe that one of the primary advantages of automated AP solutions is the substantial reduction in processing time and costs. By eliminating manual data entry and automating key steps in the AP workflow, businesses can cut invoice processing times from weeks to mere hours or days. This not only saves valuable staff time but also enables companies to take advantage of early payment discounts and avoid late payment penalties.

Automated AP systems also improve accuracy by minimizing the risk of human error. Advanced data capture technologies, such as optical character recognition (OCR) and AI-powered data extraction, can accurately pull relevant information from invoices and match it against purchase

orders and receiving documents. This ensures that payments are made correctly and on time, reducing the need for time-consuming error resolution.

Another key benefit of AP automation is enhanced visibility into cash flow. With real-time dashboards and reporting capabilities, finance teams can quickly access up-to-date information on outstanding invoices, payment statuses, and spending patterns. This improved visibility allows managers to forecast cash flow better, make smarter budgeting decisions, and be more strategic with vendor management.

Automated AP solutions streamline approval processes with configurable workflows that route invoices to the appropriate team members based on predefined rules. This speeds up approvals and helps maintain internal controls and compliance with company policies. The digital audit trail provided by these systems makes regulatory compliance and audit preparation easier.

Core Features to Look for in an AP Automation Solution

When evaluating AP automation solutions, there are several key features to consider. First and foremost, the system should have robust data capture and extraction capabilities that can handle a wide range of invoice formats and layouts.

Another important feature is the ability to support touchless invoice processing through straight-through processing (STP). STP allows invoices that meet certain criteria to be automatically processed and approved without manual intervention, further streamlining the AP workflow. However, the system should also provide the flexibility to configure approval workflows for exceptions and non-PO invoices.

Integration with existing enterprise resource planning (ERP) and accounting systems is also necessary for a smooth transition to automated AP. The solution should be able to seamlessly exchange data with these systems, minimizing disruption to existing processes and enabling a single source of truth for financial information.

Given the sensitive nature of financial data, security is another top priority when selecting an AP automation solution. Cloud-based systems should offer top-notch data encryption, user access controls, and regular backups.

Getting Started with AP Automation

The first step to modernizing AP processes is to evaluate current workflows and identify areas for improvement. This may involve mapping out the existing process, identifying bottlenecks, and calculating costs associated with manual tasks.

Once the needs and goals are clear, the next step is to research and evaluate different AP automation solutions. Consider factors such as the vendor’s experience, the system’s scalability, and the level of customer support provided. Many providers offer free trials or demonstrations, which can be helpful for getting a hands-on feel for the platform.

When selecting an AP automation solution, it’s also crucial to ensure that the system can scale with the business. As the company grows and invoice volumes increase, the platform should be able to handle the additional workload without a decrease in performance or time-consuming manual intervention.

The Future of Money Management

AP automation is no longer a luxury but a necessity. The future of money management lies in digital transformation. By leveraging advanced technologies and streamlined processes, businesses can not only save time and money but also gain the visibility and control needed to make strategic financial decisions.

By taking a holistic approach to modernizing finance operations, companies can build a strong foundation for long-term success.

I believe automation is a game-changer in terms of the efficiencies it brings to accounts payable. Our AI and machine learning technologies enable customers to reduce invoice processing costs by 80% while cutting cycle times from days to hours.

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Laurent Charpentier graduated from the Massachusetts Institute of Technology and INSA Lyon. Before he started Yooz, he worked as Solution Lead Architect and Lead Consultant for Accenture, and Business Analyst at Dell Inc. Laurent became a part of the Yooz family in 2015 when he started as Yooz NORAM COO and CIO in 2016 to lead business development of the company in the USA, where he hired sales and marketing leaders to complement his technical background. He was able to successfully create a strong foundation for the business while also being involved on the product side in integrations and innovation. After five years leading NORAM operations, he was promoted to CEO.