Creating a paperless account payable seems like a daunting task but it hosts numerous benefits that save time, money, and storage space. The saving of these three things proves a success for the businesses.
However, switching to a paperless account does not happen overnight nor it is easy. But it is definitely worth it which is why this article explains the process of going paperless.
In order to head towards the paperless accounts payable via software, the accounting process should be digitized. It is necessary to realize the paperless goals and take a record of the present process.
The software will implement an automation process and it is important to have a meeting on this with the team so that no conflicting opinion is raised.
Why Should You Paperless Your Account Payable?
Going paperless with your accounts payable process can offer several benefits. Here are some of the key reasons why you should consider paperless accounts payable:
- Increased efficiency: By going paperless, you can eliminate manual processes and reduce the time it takes to process invoices and make payments. This can lead to increased efficiency, as well as a reduced risk of errors and delays.
- Better data management: With a paperless accounts payable process, your invoices and payment data will be stored electronically, making it easier to search and access. This can help you to keep better track of your finances and reduce the risk of losing important information.
- Enhanced security: Electronic storage and processing of invoices and payments can improve the security of your financial data, reducing the risk of fraud and unauthorized access.
- Improved collaboration: With a paperless accounts payable process, multiple team members can access and collaborate on invoices and payments in real time, improving communication and reducing the risk of errors and delays.
- Cost savings: Going paperless can also help reduce costs associated with printing, storing, and shipping paper documents. This can help you to save money and increase profitability.
The Disadvantages of Paperless Company’s Account Payable Process
While a paperless company’s accounts payable process can have many advantages, some disadvantages should be considered:
- Technology Dependence: The success of a paperless accounts payable process relies heavily on technology, such as computers, software, and internet connectivity. If these components fail, the process may halt, causing delays and hindering efficiency.
- Security Concerns: Electronic storage of sensitive financial information carries the risk of cyberattacks and data breaches. Companies must implement robust security measures to protect sensitive information from theft or unauthorized access.
- Training Requirements: A paperless accounts payable process often requires employees to be trained on new technology and software, which can be time-consuming and costly.
- Implementation Costs: Implementing a paperless accounts payable process can be expensive, as companies may need to purchase new software, hardware, and other technology.
- Integration Challenges: Integrating a paperless accounts payable process with other financial systems and software can be challenging and require significant resources and time.
- Limited Accessibility: Not all vendors or suppliers can participate in a paperless accounts payable process, which can limit its overall effectiveness and efficiency.
- Document Retention: Maintaining and accessing electronic records can be challenging, mainly if the software and hardware used to store the information become obsolete. Companies must have the plan to preserve and access historical financial information.
Steps to Paperless Accounts Payable
Keep an eye on AP
Before planning to implement the paperless process, understand and familiarize the current account and where it stands. The present workflow should be monitored.
Basically the things which need to be understood are the time taken to process an incoming invoice and the expenditure an invoice needs on average. Brainstorm and ask questions before jumping into the implementation step.
Have a meeting with the CFO, AP managers, and other staff members in order to have a better grip on the AP. Set the goals for automation and communicate with others.
Ask for approval from everyone. Discuss the type of automation system to use for the account.
Things that need discussion are the amount of money that can be saved by automation, what the AP employees will do in the free time and the total sum of money required.
Take approval from everyone
Making a paperless accounts payable affects the whole company, not just an individual. Therefore, it is crucial to get everyone at the same level of understanding before actually doing it.
Mostly it is the upper management or the IT department which is not in favor of any changes so in order to avoid resistance, talk about their concerns. Moreover, the management team asks for
evidence in order to make sure that the paperless account is cheap and it improves the business. As for the IT team, it gets curious about how the compatibility, resources and security within the company will be affected. The staff is concerned whether they will be fired and how the business will be affected.
Base decisions about paper
The degree of automation which should be implemented is crucial to talk about. Therefore, understand where the process of your accounts payable stands and how many people are in favor of automation.
Eliminating the use of paper is not possible which is why it should be decided how far with automation the business will go.
Some options include making payments via paper checks like before but storing the AP information by digital means.
Or the invoices can be digitized while the paper files of the incoming invoices are stored. Do note that all these decisions depend on the needs and requirements of the company.
Set Custom Tolerances
In order to process invoices, custom tolerances are set up in an automated system. A competent software for automation is the one which not only codes the incoming invoices automatically but also routes them for getting approval by electronic means.
The user can enjoy full leverage and authority over the automation process.
Select an automation supplier
The software requires a good supplier. The software should implement the system as fast as possible. The cost expenditure on the implementation and if the system is compatible with the current ERPs are some of the concerns which need to be solved before practically doing it.
Also, inquire about how much the business can be expanded with the supplier and how efficient the reporting tools are. It is best if the software offers a free trial. The software which is the best at implementation is Next Process.
Adapt to the new system
After the software is implemented, learn and get familiarized with the new system. Check to see if it is functioning properly. The invoices get processed
automatically and those invoices which are not compatible with the customized tolerances or need manual approval are sent to the respective manager.
5 Best Accounting Software Help to Paperless Company’s Account Payable
Xero:
Xero is a cloud-based accounting solution that provides a comprehensive range of features to support a paperless accounts payable process.
One of the key features of Xero is its automated invoicing system, which allows companies to create and send invoices to suppliers electronically, reducing the need for paper-based invoicing.
Additionally, Xero offers mobile accessibility, allowing employees to access financial information and approve invoices from anywhere using a mobile device. This increases efficiency and allows for real-time decision-making.
Another key feature of Xero is its bill management system, which provides a centralized location for storing and tracking bills, making it easier to manage and approve payments.
Xero also provides real-time financial reports and insights, giving companies a clear picture of their financial position and enabling informed decision-making.
In terms of helping companies transition to a paperless accounts payable process, Xero streamlines the approval process by automating it, eliminating the need for manual approvals, and reducing the risk of errors.
Xero also increases efficiency by eliminating paper-based processes, saving time, and reducing costs associated with printing, filing, and manual data entry.
Furthermore, Xero improves cash flow by enabling companies to quickly and easily approve and pay bills, reducing the risk of late payment penalties.
Finally, Xero enhances collaboration by allowing multiple users to access and update financial information in real-time, improving communication between different departments.
QuickBooks Online:
QuickBooks Online is another popular accounting software that can assist companies in transitioning to a paperless accounts payable process.
One of its key features is electronic invoicing, which allows companies to send invoices to suppliers electronically, reducing the need for paper-based invoicing.
QuickBooks Online also offers bill management and mobile accessibility, making it easy for employees to manage and approve payments from anywhere.
In terms of automating the accounts payable process, QuickBooks Online streamlines the approval process and reduces manual data entry.
Additionally, QuickBooks Online provides real-time financial reporting, giving companies a clear picture of their financial position and enabling informed decision-making.
FreshBooks:
FreshBooks is a cloud-based accounting software that provides a range of features to support a paperless accounts payable process.
Its electronic invoicing system allows companies to send invoices to suppliers electronically, reducing the need for paper-based invoicing.
FreshBooks also offers bill management and time tracking, providing companies with a centralized location for tracking and managing their financial information.
FreshBooks streamlines the accounts payable process by automating the approval process, reducing manual data entry, and increasing efficiency.
Additionally, FreshBooks provides real-time financial reporting, giving companies a clear picture of their financial position and enabling informed decision-making.
Zoho Books:
Zoho Books is a cloud-based accounting software that provides a range of features to support a paperless accounts payable process.
One of its key features is electronic invoicing, which allows companies to send invoices to suppliers electronically, reducing the need for paper-based invoicing.
Zoho Books also offers bill management and mobile accessibility, making it easy for employees to manage and approve payments from anywhere.
Zoho Books streamlines the accounts payable process by automating the approval process, reducing manual data entry, and increasing efficiency.
Additionally, Zoho Books provides real-time financial reporting, giving companies a clear picture of their financial position and enabling informed decision-making.
Wave Accounting:
Wave Accounting is a free cloud-based accounting software that can assist companies in transitioning to a paperless accounts payable process.
One of its key features is electronic invoicing, which allows companies to send invoices to suppliers electronically, reducing the need for paper-based invoicing.
Wave Accounting also offers bill management, making it easy for companies to track and manage their bills in one central location.
In terms of automating the accounts payable process, Wave Accounting streamlines the approval process and reduces manual data entry.
Additionally, Wave Accounting provides real-time financial reporting, giving companies a clear picture of their financial position and enabling informed decision-making.
Another critical feature of Wave Accounting is its mobile accessibility, which allows employees to manage and approve payments from anywhere using a mobile device.
This increases efficiency and enables real-time decision-making. Additionally, Wave Accounting integrates with various other tools, such as payment gateways and receipt scanning apps, to further streamline the accounts payable process.
Finally, Wave Accounting is a cost-effective solution for companies transitioning to a paperless accounts payable process.
As free software, it eliminates the need for companies to invest in expensive accounting software, making it a more accessible option for small businesses and startups.