Top Accounts Payable Tasks You Can Automate in 2024

Nowadays, businesses must pay greater attention to effective cash flow management and cost control. Mundane accounts payable tasks need to be automated to pay more attention to these strategic tasks. 

Accounts payables have traditionally been managed in physical warehouses and on notebooks and sheets. With advancing technologies, companies have quickly switched from paper to computer spreadsheets to using accounts payable software. 

The accounts payable process

Accounts payable is purchasing goods or services from suppliers on credit. These debts are generally due in a short period of time and are classified as short-term debts. 

The accounts payable process consists of the following tasks: 

Data entry

The accounts payable process starts once the vendor sends an invoice to the company for goods or services purchased on credit. The accounts payable team enters invoice details into their accounting system. 

GL coding

A general ledger code points to which unit or type of invoice purchase belongs. The invoice or line items are assigned the correct GL code before moving to the approval process.

Approval routing

The accounts payable team sends the invoice to the correct business approver for approval. Invoices with corresponding purchase orders or receiving reports might skip the approval process, as they can be validated by invoice matching. The accounts payable team needs to frequently follow up with the business approver to get approval. 

Invoice matching

Invoices are matched to their corresponding purchase orders, receiving reports and inspection slips to ensure validity. Invoice matching can be done in multiple ways, with 2-way matching, 3-way matching and 4-way matching being the most common. 

Payment processing

After the invoice has been validated, the accounts payable team processes it for payment. This involves verifying the vendor’s bank account details to prevent vendor fraud and printing and mailing checks or setting up payment runs after obtaining necessary payment approvals. 

Challenges in manual accounts payable processing

Many companies, even nowadays, manage accounts payable processes manually on spreadsheets or paper documents. Manual accounts payable processing has proven to pose many challenges to users. 

Timely payments

Processing payable accounts manually is a very time-consuming and challenging process. Having to process hundreds of invoices manually can cause accountants to miss out on invoice due dates, leading to late payment fees. Invoices can also get stuck in the approval process for days, leading to significant delays. 

Data entry errors

Manual accounts payable data entry also leads to more human errors. These errors can often slip past the payment process and become very costly. Even when identified early, correcting data entry errors leads to significant delays in the payables process. 

Missed invoices and payments

Circulating paper invoices for approval can cause invoices to get lost or stolen. Missed invoices and missed payments can lead to monetary and legal issues for your company. 

Tracking approvals

Accountants must constantly follow up with business approvers to keep track of approvals. Managing accounts payable manually can make it challenging to keep track of invoices stuck in the approval process. 

Lack of vendor communication

Manual accounts payable processing leaves little time for accountants to focus on other essential tasks, vendor communication being one of them. Lack of visibility for vendors into when their invoices will be paid can lead to strained vendor relationships. 

Benefits of accounts payable automation

Accounts payable automation automates the mundane tasks associated with accounts payable. This will allow your accountants to focus on more strategic tasks to improve their accounts payable processes. 

Automating accounts payable processes has become more common nowadays, with its many benefits becoming clear. Here are some benefits of switching to an AP automation software: 

Timely payments

Accounts payable automation can help you pay invoices on time with the help of automated payment run creation. Some software also helps capture early payment discounts by optimizing payment dates. 

Save time

Automating manual accounts payable tasks can help you save time spent on repetitive data entry tasks. Your accountants also don’t need to constantly follow up with business approvers for approvals with the help of automated reminders.

Increased productivity

Spending less time correcting errors and matching invoices can help improve your accountants’ efficiency. This leads to more invoices getting processed daily.

Improved vendor relationship

AP automation software facilitates timely payments and keeps your vendors informed every step of the way, leading to improved vendor relationships.  

Cost savings

Most accounts payable solutions give a good ROI, sometimes recovering costs in less than a year. This can help your company save money. Software like ClearTech also provides users a saving dashboard to help track their potential and realized savings. 

Top accounts payable tasks to automate

An end-to-end AP automation software automates multiple tasks in the accounts payable process. Here are some common tasks where automation is a necessity: 

Data entry

Data entry is one of the most time-consuming tasks in accounts payable. But now, with the help of OCR technology, the software can automatically extract all invoice data such as invoice number, invoice amount, line items, invoice date, PO number, due date and payment terms, with little to no manual intervention. 

GL code and cost center allocation

GL codes can be auto-assigned with the help of robust machine-learning technologies. The software uses the context of historical invoices to automatically assign invoices and line items to the correct GL account and cost centers. 

Invoice matching

AP automation software can accurately perform multi-level invoice matching without manual interventions. This also gives the added benefit of storing all vendor documents, such as purchase orders and receiving reports in one place. 

Approval routing

Approver allocation can also be set up by replicating your company policies and assigning approvers. Business approvers can get approval requests with complete invoice context to allow them to approve or reject the request directly. 

Follow-ups and reminders

With the help of frequent reminder emails and text messages, AP automation can help you automate following up for approvals with the help of automated reminders. 

Payment

Some AP automation software can also automatically create payment runs and process payments in a single click. Some software also prints and mails checks on behalf of the company, saving time spent doing unnecessary tasks. 

Vendor communication 

With the help of automated mail and vendor portals, AP automation software can automatically let your vendors know where their invoices are in the accounts payable cycle and let them know when payment has been processed. 

Vendor management

A cloud platform also allows companies to store all vendor information and documents in a central location. AP automation also has smart checks to prevent duplicate vendor creation. ClearTech also has vendor creation approvals, keeping internal vendor fraud in check. 

Conclusion

• Manual accounts payable tasks can lead to data entry errors, missed or late payments, strained vendor relationships and low productivity issues. 
• Automating accounts payable can lead to timely payments, cost savings, increased productivity and improved vendor relationships. 
• Adopting end-to-end accounts payable automation software can help users save time on performing mundane accounts payable tasks. 
• Invoice data entry, GL code assignment, invoice matching, approval routing, payments, vendor communication and vendor management are some standard accounts payable tasks to automate.