The Ultimate Guide to Paperless Accounts Payable in 2024

Accounts payable processes have historically been managed on paper books. Despite being a common practice, paper accounts payable processes are declining rapidly. However, with the recent technological advancements, paperless accounts payable processes have been on the rise. 

This blog will discuss how to go paperless with your accounts payable process. 

What is paperless accounts payable?

Paperless accounts payable manages accounts payable functions on computer software or spreadsheets, removing the hassle of managing accounts payable paper documents. This process also includes digitizing paper invoices or purchase orders to ensure a completely paperless experience. 

Going paperless involves ensuring all accounts payable-related documents are available in a digital format and invoice details are directly entered into the accounting system without going through accounting books. 

Benefits of paperless accounts payable processes

Paperless accounts payable processes can be lighter on your company’s wallet in multiple ways. Here are a few benefits of paperless accounts payable processes: 

Fewer errors

Entering data from invoices and other related documents manually into accounting books might cause some errors to slip in. These errors can be avoided by switching to a completely digital process, where the chances of human errors slipping by are fewer. 

Avoid duplicate payments 

Searching through paper documents and journal entries can be a time-consuming process. Older entries might often get missed when sifting through worn-out paper documents, leading to accountants paying invoices that have already been paid. In the long term, these mistakes can be very hefty for your company. 

Save on storage costs

As your company scales, so does the volume of invoices your accounts payable team processed. Storing year's worth of invoices, purchase orders and other related documents can come with huge inventory costs. Switching to a public or private cloud-based accounts payable platform can greatly reduce these costs while preserving the quality of older documents. 

Fewer missed payments

With invoices getting circulated for approvals and getting stored in warehouses, it is common to miss a payment or two ever so often. Missed invoices, however, can often come with legal issues and monetary penalties, which might prove costly. 

Easy accessibility 

Documents stored on a cloud platform are also more accessible and easier to find than searching through paper documents. 

Cloud-based accounts payable processes are also remote work friendly, allowing your accountants to access documents easily anywhere in the world.

Easier audits

Managing accounts payable on a good accounts payable software also creates audit trails for internal and external audits. This makes it easy for your company to comply with accounting standards. 

Ways to implement paperless accounts payable

Now that we know the benefits of paperless accounts payable processes let's discuss how to implement paperless accounts payable processes. Here are a few ways to make paperless processes a part of your company.

Invest in OCR software

Optical character recognition technology helps extract text from scanned documents. Applying OCR technology in accounts payable can help your company store invoices and purchase orders digitally, removing paper documents from the process.

Extracting text from the invoices can also help you locate a particular invoice by searching the necessary field values. 

Scan present documents and upload them to a cloud platform 

Scanning all vendor invoices and other documents and uploading them to a cloud platform is another way to implement paperless accounts payable processes. Storing important documents on a cloud platform can greatly reduce warehouse costs and preserve the quality of older documents. 

Adopt invoice automation software

Invoice automation is automating manual tasks involved in the invoice processing process. Most invoice automation software uses OCR technology and machine learning to automate tasks such as data entry, general ledger coding and cost center assignment, approver assignment and approval routing. 

Switch to an end-to-end AP automation software

An end-to-end AP automation software can automate the accounts payable process with minimal manual effort. Software like ClearTech allows users to directly upload or capture invoices from the centralized AP inbox and process it with 100% accuracy to reduce your accountants’ workload. 

With ClearTech, you can also directly analyze your accounts payable spending through inbuilt dashboards and smart invoices. All your invoice data can also automatically be synced to your accounting system.

How to implement a paperless accounts payable system

Bringing a change in your company is not an easy task. Even when adopting a paperless accounts payable system, knowing how to safely implement it in your company is important. 

Plan the implementation process

It is important to have your entire implementation process mapped out to avoid surprises and ensure smooth processes functioning even during the transition. Implementing and integrating new software into an organization can sometimes extend for months, making it a very tedious and challenging. It is essential to have a game plan when the implementation process takes longer than expected. 

Get all employees on the same page

Ensure your organization knows why and how the process change is happening. Your employees should understand the benefits of switching to a paperless system. 

Getting all employees onboarded on the new platform for a seamless transition is also important. 

Convert existing paper documents to a digital format

Even before implementing invoice automation or AP automation software, you can convert all paper vendor documents into a digital format. This will help preserve past documents more efficiently and speed up the process after implementing automation. 

Choose the right automation software

Selecting the best AP automation software for your company’s needs is also essential to going paperless. Many AP automation software provides an ROI calculator, which can help you assess the payback period for your software. It is also important to consider software that seamlessly syncs with your accounting software. Short integration times are also important to ensure your daily processes don’t get disrupted. ClearTech’s AP automation software helps you get up and running in a matter of days, making going paperless easy. 

Conclusion 

• Paperless accounts payable solution helps companies manage their accounts payable needs on computer software, eliminating paper processes. 
• Paperless accounts payable has many advantages, such as reducing inventory costs, fewer missed invoices and errors, remote access and fewer duplicate payments. 
• Implementing AP automation software can also help companies reduce manual errors and save employees time. 
• Scanning invoices and investing in OCR technology, invoice automation, or AP automation are a few ways to implement paperless processes. 
• It is also important to ensure proper implementation of paperless processes by having an implementation plan, getting employees on the same page, getting invoices in digital format and choosing the right software for your business.