Automated Accounts Payable – Saying Goodbye to Paper

Washington Monument January 2013, Andrew Young, CPA, CGMA, Manager, Renner and Company, CPA, P.C.
Download the article e

Picture yourself in one of the following scenarios:

  • You own, operate, and manage a small business and work tirelessly to ensure that not only your business hits the ground running, but also that the bills are paid on time.  Though your best efforts are made, sometimes the monthly process of paying the bills just isn’t the top priority on your agenda.  While you’re up to date on all your payments, you feel like your time is better spent in other aspects of the business.
  • You are a hard-working, competent Controller looking to optimize your functional capacity of your accounting department.  While your accounts payable clerk is wonderful, she constantly has to track people down to get appropriate documentation.  To add insult to injury, you have a policy where checks must be authorized by an individual who often travels making it difficult to mail and authorize payments in accordance with your cash flow cycles.
  • You are a dynamic CEO who travels frequently as part of your job duties.  In order to get reimbursed, you have to submit all your hotel bills, meal receipts, cab fares, etc. to your accounts payable department.  Since you are often travelling weeks at a time, you lament the hassle of maintaining these documents only to wait weeks or months before you receive a reimbursement check.

Any of these sound familiar? Rest assured that you are not alone in fighting the good fight toward applying manageable accounts payable practices, however there is good news to help alleviate your payable concerns.  Automated accounts payable offer an efficient and often affordable manner of conducting your payable business.

Let’s look at some of advantages these systems maintain in comparison to standard paper systems you might currently employ in your office.  First, automated accounts payable systems offer multiple efficiencies in comparison to manual procedures.  The electronic capabilities of automated accounts payable allow invoices to be scanned directly into the automated system for processing – there is minimal data entry that needs to be performed!  Depending on the sophistication of the system, data from these scanned invoices can be processed instantaneously.  This eliminates the time previously spent matching to a purchase order or recording on a clerk’s report.  Also, authorizations can occur instantaneously at only location across the globe – only internet access is required for a transaction to take place.  Therefore, you won’t have to wait for that purchasing agent to get back from a conference or a Treasurer to get back from that business trip overseas to process a payment.  All invoice data can be reviewed and approved at the click of a button.  On the back end of the process, automated accounts payable systems will also prepare checks or make automatic payments from your bank account, eliminating the time-consuming check disbursement process duties inherent within manual processes.  This also ensures that your payments are made on time and managed alongside your financial operations procedures.

Another great feature of automated accounts payable systems is their ability to integrate with accounting software, such as Quickbooks or Peachtree.  While the level of sophistication with these functions varies within individual platforms, most systems have a built-in feature that automatically uploads all recorded payable data into the general ledger.  This eliminates the tedious process of manually recording the payable data twice, but also serves as a wonderful quality control in that recorded amounts are automatically cross-checked to those entered into the automated system; this greatly reduces the likelihood that entries will mistakenly be recorded twice within the general ledger!

As an added benefit to utilizing automated accounts payable systems, the electronic features associated with these platforms allow advancements in technology to be circulated in your operational environment.  One of my favorite features available in most platforms is the usage of a smartphone application to process payments electronically. All that is required to begin the payment process is to snap a picture of a receipt or invoice and that scanned picture will automatically upload into the automated system.  Also, many of these systems employ recognition software that can automatically detect certain denominations on an invoice when scanned.  This way, the recognized data can be automatically recalled by the system and therefore be automatically coded and processed to authorization: no additional data entry is required!

Finally, automated accounts payable systems offer viable solutions to travel reimbursement problems.  Specifically, many automated modules have software applications designed to facilitate travel schedules.  One particular system has a module in which hotels, flights, car rentals, and other amenities (even dinner reservations!) can be booked via the automated payment system and invoices for these items are immediately e-mailed to the system for scanning and processing.  This removes a lot of the hassle and stress of travel accommodations and maintaining paper copies of invoices and receipts.  Also, these automatic capabilities will allow reimbursement checks to be expedited, meaning that money will flow back to your bank account in a timelier fashion.  In this manner, checks can be processed as fast as they can be scanned and authorized within the automated system, reducing lag times attributed to manual processing measures.

So next time you find yourself spending too much time on paying bills and not operating your business, frustrated over the inefficiencies of manual accounts payable systems, or lugging around a month’s worth of travel receipts without being reimbursed, consider the advantages of automated accounts payable systems – they offer a wonderful solution to your internal payable needs!

 

©2014 Renner and Company, CPA, P.C., all rights reserved.