What does accounts payable automation mean for modern enterprises? As it suggests, the term refers to a dedicated digital process or software that automates a company’s accounts payable system, helping to eliminate repeated, manual tasks and providing enhanced visibility over financial transactions.
Datacor is launching its AP Invoice Automation Software to assist companies in enhancing their accounting efficiency. The software means businesses can pay their suppliers the correct amount every time, on time, while also reducing the costs and errors associated with manual processes.
Making Sense of Your Accounts Payable System
The reality across many businesses is that staff manually input data and process hundreds or thousands of invoices each month. Manual entry is tedious, repetitive and prone to error, leading to late or missed payments, or paying the wrong amount, all of which can damage relationships with suppliers.
“You should never pay late because of a deficiency in your accounting process. It should be a strategic decision,” says Datacor Product Manager Jeff O’Brien.
Digging deeper into the AP process itself, it is essentially made up of two halves. In the first half, the focus is on the three-way match process, in other words matching the invoice to the purchase order and receipt. If all is well, then payment is made with no special approvals required.
But, if there is any discrepancy, say the supplier’s invoice does not match the internal purchase receipt, for example a different quantity or price, then that is where the problems begin with staff routing from desk to desk or office to office as they hunt down the right person to review and sign off the paperwork. This obviously wastes a lot of staff time, which could be better spent on more productive and value-enhancing tasks.
“AP automation eliminates a lot of waste in the process and automates highly predictable and repeatable activities, giving accounting staff better control of their process,” O’Brien says. “We are building something that will dramatically improve companies’ processes. It is a way to improve on a regular basis, a low-hanging fruit to get value out of the system and save time and effort.”
Let Our Software Do the Hard Work for You
The second half of the AP process relates to actually making the payments. Datacor has had an automated payments process for more than a year. Its ePayments single-step solution allows customers to turn standard check runs into electronic payments, limiting manual steps and digitizing the process.
Datacor worked with key partner Corpay, which has a network of roughly one million North American suppliers, to integrate its software into their web-based portal. The system is simple – users log in, review the files for payment and approve them – the software handles the rest of the process.
Michael Lynch, Product Manager at Datacor, says customers are saving “significant” amounts in hard costs, for example paper check stocks, expensive toner, envelopes and stamps, as well as seeing efficiency gains. He adds that all payments are indemnified, meaning there is no risk to customers.
There is a monthly fee to use the system and transaction fees for paper checks, but customers get a rebate for credit card transactions, which can more than offset the cost of the software.
A Seamless Process
Lynch says it was customer feedback on its electronic payment solution that led to the creation of Datacor’s Invoice Automation software, as companies wanted to improve the front end of the AP process. The two programs combined can automate the entire AP process from beginning to end.
Datacor’s AP Invoice Automation – its software for handling the first half of the AP process – is a new product that has recently entered the Limited Availability period.
Its AP Payments Automation software – handling the second half of the AP process in partnership with Corpay – is already generally available with many subscribers using it daily.
Lynch says testing with a limited availability group has been a first for Datacor, and this will continue going forward. “It helps us to dial in the value of the product to customers and really make sure it is designed the way they see as providing the most value,” he comments.
O’Brien adds that Datacor will keeping investing in the software. He now wants to build out some reporting capability so that customers can understand the health of their AP systems.
Datacor’s AP automation solution is fully integrated with its Enterprise Resource Planning (ERP) software, and provides a superior value when compared to third-party AP automation solutions with little or no integration with Datacor ERP.
Benefits of AP Automation
- Automatic processing of invoices without human intervention
- Automatic identification of invoices that cannot be matched or are outside of defined tolerances
- Automatic routing of invoice exceptions to the correct person for review and approval
- Easy access to electronic copies of invoices
- Elimination of late payments to suppliers
- Significant reduction in processing costs
- Cloud model offers secure and lower-cost storage and retrieval
- Frees up time for accounting team to work on value-added projects
Frequently Asked Questions (FAQs)
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