Gone are the days when businesses used to stick with the paper-based process and wrote the record of the financial records by pen and paper.
In today’s digital age, bookkeeping has become paperless. More and more businesses are now going paperless with almost all company-related tasks.
Even Accounts Payable is automated by document management software, document scanning, and more similar technological tools. This article provides a clear guide on making your account payable paperless.
Accounts Payable abbreviated as AP can be defined as the responsibility of a business to pay a short-term debt to the respective suppliers or creditors. This account is inside the general ledger.
AP can also be referred to as that division or business department which is obligated to give payments to the creditors and suppliers. In simple words, accounts payable is the amount of cost for the services and goods received which have not been paid for yet.
Steps to make Accounts Payable Paperless
1) Decide on the Implementation process
To do this, the current AP should be kept in a record so that it can be known which things need to be made better. Get familiar with the Accounts Payable workflow before thinking about implementing the paperless solution.
How long is the duration of processing the invoice? How is the invoice approved? These questions will give an insightful depth.
2) Communicate with the team
Do not carry out the process of automation alone without the team knowing. When the implementation process is being laid out, it is crucial to involve the team. It is possible that the changes a business owner is working on are not suitable for the employees.
The departments within a business which oppose such changes are the IT, upper management, and the accounts payable departments. Therefore, it is advised to give light to all the concerns and decisions before moving forward.
3) Scan and convert the current documents
If the Accounts Payable department has an abundance of invoices being sent, it is necessary to find a reasonable way to convert the invoices into an electronic copy.
This step is crucial to complete before the automation of invoice processing. Whichever method is selected for converting into electronic format, it should have the technology of Optical Character Recognition (OCR).
Another technology named Data Indexing is equally useful in this process because it forms an index that can be searched for any aspect of the document.
The information involved in the document and how the information was extracted can be known via this technology. A high level of automation and big data storage is guaranteed by incorporating such technologies.
4) Choose an AP automation solution
A reasonable supplier for the accounts payable automation software should be chosen. This step saves a big percentage of money and requires minimum data entry.
Factors that need to be taken into consideration are the cost of the system, the ease of expanding the system, the speed of implementation of the system, whether the system works with the current ERP, and how the reporting tools function.
5) Customize the software settings
In order to process the electronic invoices, software with custom tolerances is set up. This element is found in the automated system. The user has complete control because the software allows automatic coding of the incoming invoices and routing for approval.
A good platform adapts to the settings of each business so that it can expand. Therefore, custom tolerances should be created in order for the fast transfer of the incoming invoices.
6) Adapt to the automation process
After the implementation has been successful, it is advised that the employees test a new product and think of questions. This is done in order to adapt, learn and scale the automation process so that the team can get familiar with the new system.
Afterward, streamlined operations can take place to make the business successful. The AP automation process can be scaled with the integration of the Accounts Payable department.
Benefits of going paperless
Any business can take benefit from a paperless office. The processing expenditures are cut short by removing the paper documents.
This is because the paper invoices demand a lot of manual effort. The handling of the paper invoices requires time, and with time, costs are increased.
A lot of money is saved by digitizing the invoices and using a paperless automated accounts payable process. Moreover, records are more easily accessible, and the processing is done faster too.
Enjoy better control, organization, and an environmentally friendly way of running your business by involving paperless electronic means in the office.