We talk a lot about implementing AP automation to save on paperwork and reduce excessive administration, but is it still worth it if you have lower invoice levels?
The answer is yes. Here’s why.
Scale with ease at the drop of a hat
Whether due to planned growth through a new acquisition or an unexpected but highly welcome increase in sales and operational capacity, you can be assured that the volume of your supplier invoices can increase dramatically – and suddenly. The thought of going from 300 invoices a month to 600 can be frightening for everyone in the finance and AP team.
Luckily, AP automation is known for its scalability, and implementing it can be easier when you have a lower number of incoming supplier invoices. Why?
For one, growth won’t be a scary proposition for your AP team. Implementing an AP automation solution when your invoice volume is relatively low means your employees have more time to contribute towards capturing the processes behind your AP workflow, then become comfortable with and adept at using a new solution. So, when anticipating sudden or steady future growth, your team is well-prepared and positive about their ability to handle it in advance.
Plus, as a wise man once said, ‘Be prepared.’ Acting early to implement an AP automation solution is a sound business strategy. The time already invested in creating a uniform automatic business process and rules for receiving, reviewing, and approving invoices can be applied to new suppliers as volumes increase - without the need to add complexity or supplement the size of your AP team.
Improve employee satisfaction
A good employee experience significantly impacts your ability to attract and retain skilled staff. No matter how it’s dressed up, processing small or large supplier invoices by hand is a thankless and recurring task.
As AP automation becomes increasingly common, a potential new employee may think twice about accepting a role that involves manual data entry and chasing and tracking individual email approvals. It’s a backwards step for a motivated and usually productive worker, akin to trying to survive without EFT-POS or online shopping.
The ability to work efficiently using a streamlined and automated AP workflow is reflected by an increase in individual productivity. Tasks are completed more rapidly, there are fewer errors, no stacks of paperwork or need to chase approvers, and it only takes a moment to track and resolve a supplier query about the status of their invoice.
Likewise, the stress of manually reviewing and approving a pile of supplier invoices is streamlined, with those that match an official purchase number already eliminated from the approvals queue.
So, if you already have a low volume of supplier invoices, managing them becomes an even smaller part of the job. Your AP team members can use their time to undertake more demanding and interesting challenges within the business or even move to a more flexible job-sharing or part-time role – which can increase job satisfaction and motivation.
AP automation also increases the happiness levels of the larger finance team. With immediate clarity of incoming AP obligations, planning and reporting are easier and less stressful.
An audit, _gulp_
The word ‘audit’ has the power to make many a finance person quake in their boots. An audit evaluates correctness and compliance regardless of the volume of transactions. A mistake is a mistake, little or large.
By implementing an AP automation system, you can be confident that your financial transactions will be perfectly documented and fully compliant with relevant regulations. As every action is tracked by the owner and action, the meticulously accurate audit trail makes spot or in-depth auditing simple and failsafe. Inbuilt rules in the solution mean your employees can have complete confidence that everything they have done aligns perfectly with your internal and external compliance requirements.
In short, with AP automation, audits are less of ‘a thing’ to stress about or prepare for.
Reducing and even eliminating errors
In this digital age, manual data entry is not your friend. What’s worse, the time taken to find and fix a single mistake can far outweigh the initial seconds it takes to make an error – adding more cost to your AP process.
With manual data entry, what can go wrong will go wrong. From making errors in numbers (like a purchase order number) or amounts, a small mistake can take human time and effort to untangle. AP automation uses highly accurate technology to capture invoice data from your supplier invoices – no matter if they are submitted as PDFs, in an email, digitally, or on paper). It even spots duplicate invoices sent in error, so they aren’t paid twice.
Countering the risk of cybercrime and fraud
The same benefits that AP automation offers in auditability and error reduction also effectively contribute to reducing the risk of deliberate fraud or cybercrime.
While we’d all like to think it won’t happen to us, the Association of Certified Fraud Examiners (ACFE) 2022 Report to the Nations says that the average organisation loses 5% of its annual revenue to internal and external fraud.
If your business only processes a small number of supplier invoices, you likely have a small AP team. Without the best practices and controls introduced by an automated system, it’s easier for a ‘trusted’ team member with sole responsibility for AP to mismanage the process to their financial advantage. It’s sad and sobering to realise that 12% of frauds originate from within your accounting department and are carried out by your employees. With its ability to track and audit every transaction, AP automation systems make it more difficult for employees to commit fraud - or to get away with it undetected.
With external players accounting for the balance of frauds, having inbuilt checks and balances and best practice cybersecurity practices to protect your business are essential. These can range from keeping staff aware of the latest social engineering scams (where criminals impersonate senior executives or vendors to convince employees to make urgent ‘out of the loop’ payments) to submitting a spoofed email with a change of bank account details to divert authentic payments to their own accounts. Paying scammer-submitted invoices (which mimic authentic ones) for payment is another popular method of trying to part your business from its money.
While training and MFA can go a long way to helping to block such attempts to defraud you, AP automation helps to minimise the fraudulent approvals of employee- or criminal-generated invoices or account details. Vendor invoices must match company purchase orders, and any that fail to do so exactly enter an exception queue for individual scrutiny. Duplicate invoices are also highlighted and flagged for review, so they can’t be double-paid.
With AP automation, processing supplier invoices is streamlined and hands-off – whether 100 or 10,000 a month. Falsified payments are harder to approve and divert without detection - and, of course, there’s a complete audit trail for every move made.
For more detailed information on how AP automation helps reduce risk in your business, check out this Redmap blog.
As we said, size doesn’t matter
AP automation supports business growth, delivers a more positive and empowering employee experience, and safeguards you from fraud. So when your volume of invoices goes up, you can say, “Bring it on!” confident that everyone is a winner.
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