• Home
  • A 3 Step-Guide To Accounts Payable Automation In 2024
  • Want to Fast Track Your Cash Flow?
  • Want to Improve Cash Forecasting?
  • Want to Digitally Transform Your Finance Function?
Contact Us
Accounts Payable Automation In 2024

In 2024, 86% of CFOs recognize the significance of digitizing crucial finance processes such as accounts payables, cash management, and cash forecasting systems. They perceive this digitalization as essential for enhancing operational excellence, ensuring business continuity, and ultimately optimizing bottom-line margins for their organizations.

The Office of the CFO currently encounters a significant hurdle in the form of siloed traditional systems like accounting systems, budgeting systems and countless spreadsheets – which confine finance data. In the absence of a future-focused financial transformation mechanism – this dependence on siloed and semi-manual processes creates substantial obstacles, particularly in the purchase order-to-pay and payment processes. Consequently, valuable data remains inaccessible to stakeholders across the organization who require visibility into this information for effective strategic decision-making. However, by implementing digital PO-to-pay processes, the efforts, time frame and cost can be reduced significantly, with greater cost savings for smaller businesses due to the fixed minimum overhead of accounts payable.

Accounts Payable (AP) is a critical finance function that involves collections, formulating credit policies, discounting policies, trade discounts, criteria for cash discounts, managing debtors, etc.  A smooth AP mechanism means smooth operations, easy circulation of funds, and overall healthy business growth. 

However, traditionally businesses have relied on manual collections and processes which are prone to errors and AP in itself is a tedious task. Therefore, by automating the accounts receivable function businesses can ensure having a robust and agile collection process, significantly minimize invoicing errors, maximize return on investment (ROI) and achieve long-term business growth. 

3 Steps To Preparing for Accounts Payable Automation 

Trying to automate everything in one go without proper evaluation of current processes is a recipe for disaster and the primary reason why most automation projects fail to achieve the desired outcomes. To automate or not to automate, which parts to automate, and how to do it should be an informed choice. 

How does one prepare for automation the right way? Begin by asking yourself why you want to automate in the first place.

  • To standardize current processes and integrate workflows
  • Enhance operational efficiency
  • Cost-saving
  • Deliver better customer experience
  • Improve relations with customers and vendors

1. Assessment and benchmarking of current processes

can help identify the existing operational gaps and ensure a seamless and successful transition.

  • Assessment

A thorough evaluation of your current business processes will help you get a better understanding of the problems at ground level and identify if certain areas need automation or if the entire process needs a revamp. 

  • Benchmarking

Comparing your current process and performance metrics with industry standards is benchmarking. This will help you identify the goals you wish to achieve by automating your current processes and creating a roadmap for the same.

2. Selecting the Right Automation Provider

Selecting an AP automation software that addresses your pain points and onboarding a vendor should be an informed decision. Automating your AP function is a success only when you achieve the desired goals and outcomes from it, and the right software and service provider is the foundation for the same.

  • Market Research

Now that you have identified your goals, do thorough market research to educate yourself on the various automation solutions available in the market. 

  • Evaluate

Evaluate and compare the automation solutions available in the market.  When implementing accounts AP automation look for the following in the software:

  • Features

When evaluating and comparing an AP automation software provider look for features like –

  • Data entry. …
  • Invoice matching. …
  • Coding invoices. …
  • Approval routing. …
  • Payment scheduling and execution. …
  • Vendor management. …
  • Expense reporting and reimbursement. …
  • Fraud detection.
  • Dynamic Discounting
  • Real-time data analytics
  • Integration capabilities

As a business, you may already be using other systems like ERP, and CRM, or you may have already automated some processes of finance operations. Your AP software needs to integrate with these systems seamlessly.

  • Implementation Timeline

Check about the software implementation and integration timeline, you don’t want to delay salary processing or miss any important payment or collection cycle. Also check on the policy for software upgrades in the future.

  • After-sales Support

Read online reviews and take feedback from existing customers about after-sales support.

3. Schedule a demo

Before you take the plunge it is good to take a free—trial to see whether or not the solution is working for you and if it is giving you the desired outcomes.

Additionally, scheduling a demo before selecting an Accounts Payable (AP) automation tool is crucial for several reasons. 

Firstly, a demo provides a hands-on experience, allowing users to interact with the software in a real-world scenario. This practical engagement helps users understand the tool’s functionality, user interface, and overall usability. It allows them to assess how well the automation tool aligns with their specific business processes and requirements.

Secondly, a demo serves as an opportunity to evaluate the tool’s customization capabilities. AP processes can vary significantly between organizations, and a one-size-fits-all solution may not address unique needs. 

During the demo, users can explore customization options, ensuring that the automation tool can be tailored to accommodate their workflow intricacies.

Furthermore, a demo enables stakeholders to assess the tool’s integration capabilities with existing systems. Seamless integration with ERP (Enterprise Resource Planning) systems, accounting software, and other relevant platforms is essential for streamlined AP operations. The demo allows users to verify compatibility, ensuring a smooth integration that minimizes disruptions to ongoing processes.

Madhusmita Panda

Chief Marketing Officer at KredX

Madhusmita is the multi-hyphenate growth specialist at KredX. She worked with industry giants like Wipro and ICICI before turning entrepreneur and then brought that decade of expertise to KredX. She joined the fintech powerhouse in its early years and quickly became a growth driver creating marketing innovation in the fintech ecosystem with a unique approach integrating product and partnerships.