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Historically, the accounts payable workflow has involved paper processes. Invoices came in paper form via the mail, paper went from desk to desk for approval, paper checks and remittance were sent out to suppliers, and so on. But with the emergence of AP automation platforms, the AP workflow can be digitized, eliminating manual tasks and the associated forms of paper.

Despite these advancements, many accounts payable departments still rely on a combination of paper and technology. But it鈥檚 now possible to switch to a mostly or completely paperless accounts payable process. If you鈥檙e looking for ways to improve your AP process, going paperless and integrating an AP automation solution may be the answer. In this article, we cover the ins and outs of paperless accounts payable systems, including the benefits, and how to get there from here.

What is a Paperless Accounts Payable System?

A paperless accounts payable system is a process that handles all parts of the AP process electronically, eliminating the need for paper or printed items.

But it鈥檚 important to note that going paperless requires the right accounts payable software to support the full invoice-to-process, including capturing and coding invoices, handling approvals, storing invoices, executing payments, and managing suppliers鈥揳ll without needing to process paper, use a printer, or manually type in information from a document.

Being completely paperless also requires a certain amount of buy-in from suppliers, including agreeing to submit invoices electronically as well as accept electronic forms of payment. A good paperless system also proves its worth by leveraging automation and other tools to improve efficiency, reduce errors, and keep suppliers happier and in the loop.

The Benefits of Paperless Vendor Payments in AP

While there is, of course, the obvious benefit that you are saving trees by not using paper, the real reason for moving towards paperless vendor payments are the multitude of other benefits realized both from your improved efficiency and increased bottom line. These include the following:

Reduced Duplicate Payments:

Using a single electronic system to handle all of your AP processes means that duplicate invoices are automatically flagged, ensuring payments are only sent once. When the AP process is not electronic, it鈥檚 much easier for invoices to get paid twice鈥揻or example, If a vendor sends the original invoice by mail and then a follow-up via email. These errors can be costly to companies and can also strain supplier relationships.

Optimized for Hybrid and Remote Office Workspaces:

Ever since the COVID-19 pandemic, hybrid and remote work have become commonplace. In fact, 58% of companies noted that the pandemic was the catalyst for them to begin digitizing their back-offices.

AP departments that rely on paper processes will struggle with remote work if they have to physically receive and process paper invoices , as well as print and mail checks. Electronic AP processes, however, can be handled from anywhere. This is why the majority of companies who are looking to automate their financial functions say that AP is the highest priority to digitize.

Ability to Process more Payments with less Overhead:

By going digital and using automation, it becomes much easier to scale up and meet growing business demands. Processing more invoices and payments doesn鈥檛 require any additional overhead when done electronically. But processing more payments with paper-based processes requires more manpower, more paper, and more time. 61% of companies who have invested in automation can process more invoices with the same team. Companies need a solution in place that can scale and grow with the company.

Improved Vendor Relationships:

Electronic AP processes often happen faster and with better transparency. Vendors are often able to view where their invoices are in the process and exactly when and how they will receive payments. As a result, vendors are happier and the buyer-supplier business relationship is improved.

Increased Efficiency and Reduced Costs:

One of the biggest benefits of AP automation is the increase in workflow efficiency. When everything is electronic, there is no need for error-prone manual entry, payment approvals can happen automatically via email, and automated reminders are sent as needed. The entire end-to-end process of accounts payable becomes more streamlined.

The average cost of processing an invoice is . However, this cost is reduced to $1.45 when automation is in place. AP teams could also process two times as many invoices in the same time frame.

Additionally, there often isn鈥檛 in the cost to process an invoice between large and smaller organizations, who generally have some sort of AP automation in place.

For organizations relying on paper checks or increased overhead to pay vendors, there are additional costs associated with these invoices. An automated payment process results in a more accurate and less expensive AP process.

How to Implement a Paperless AP Process

If you鈥檙e ready to implement a paperless accounts payable process at your organization, you can start by first assessing your current process, then reviewing what automation solutions are available.

Assess the Pain Points in your Current AP Process

By first understanding where you are, you can get a better idea of what鈥檚 possible and where you鈥檇 like to end up. Take some time to identify current pain points so that you can look for solutions that will address these.

Many of the biggest pain points revolve around manual processes, which are time-consuming and error-prone, and the act of hunting down information. Vendors may call wanting updates, and you may or may not be able to answer their questions. Your department may be spending too much time hunting down approvals or tracking down physical copies of documents. Perhaps burnout from repetitive tasks is an issue. Look at your entire AP process and make a list of these issues.

Review Automation Platforms

Once you know exactly what problems you are hoping to solve in your current AP process, it鈥檚 time to review automation platforms. There are many to choose from, so make sure you take your time comparing features, prices, and service support.

As you make comparisons, ask yourself if the solution addresses your challenges, if it will grow with your organization, whether it is easy to use and learn, if it integrates with your ERP system, and so on.

Remove Manual Processes

Paperless vendor payments reduces manual processes. This alone minimizes errors, speeds up processing time, and helps eliminate fraud. The more processes that can be handled electronically and automated, the better. As a starting point, we recommend eliminating the following primary manual processes:

1. Data Entry:

Getting all data from an invoice into your accounting system and coded accurately is a huge task. Even small mistakes can lead to huge problems down the line. Automating invoice capture eliminates the time cost and errors. For example, 91快活林 handles data entry by integrating directly with your ERP and syncing all automatically captured data over to your accounting system.

2. Invoice Approvals:

Collecting approvals can mean juggling a combination of emails and physically moving papers from one desk to another. But this makes tracking difficult and can be very cumbersome. By handling approvals electronically with a paperless invoice approval system, you eliminate these manual processes and the need for human intervention, as everything is automatically routed where it needs to go.

3. Invoice Payments:

Executing payment is one of the final steps in the AP process. Printing and mailing paper checks takes more time than sending an electronic payment and is far more expensive. If you automate payment execution instead, approved payments are scheduled and automatically sent out on the correct date, keeping vendors happy and opening the door for you to take advantage of early payment discounts as well as the greater savings and security from electronic payments.

Consider an End-to-End Automation Solution to Streamline your Entire AP Workflow

For many companies, the challenge is to automate the entire AP process. 77% of companies have some sort of automation in place. However, most companies do not even have half of their process automated.

An end-to-end AP solution significantly streamlines the entire workflow. 91快活林鈥檚 end-to-end solution helps eliminate paper invoices in two ways. First, with a dedicated email box that triggers automated invoice capture, and second, by digitally routing captured invoices for approvals. With an AP automation solution in place, it鈥檚 easy to significantly improve the invoice approval workflow by ensuring more accurate data capture and reduced time shuffling papers. 91快活林鈥檚 solution combines OCR technology and human review for 99.5% accuracy. Additionally, the information captured is valuable for analytics and reporting. Without AP automation in place, AP teams need to wait to use the data until the data has been posted to the ERP and the invoice has been processed. With AP automation in place, teams can leverage data for cash flow management, accruals, and audits.

More paper is eliminated with our automated ePayments options. We also offer continuous supplier enrollment services to drive adoption on your behalf. A complete, end-to-end solution like 91快活林 also creates a central digital repository of all invoices and data, which greatly simplifies audits and other records checks.

Case Studies: How Companies Implemented Automation for a Better AP Workflow

Many AP departments of all shapes and sizes have gone paperless with 91快活林 to great success. The following are just a few examples of organizations improving their AP process:

Affinity Dental Management Handles Increase in Invoice through Automation

After rapid growth due to an aggressive acquisition strategy, Affinity Dental Management sought out 91快活林鈥檚 AP automation solutions to handle the significant increase in invoices it now had to process as a result. This not only reduced paper and improved efficiency, but it freed up their AP specialist to proactively communicate with vendors and focus on other higher-value work initiatives.

The Boston Celtics Reduces their Invoice Processing Time

The Boston Celtics struggled with their manual accounts payable processes during the season because the number of invoices would balloon. After a painless implementation of 91快活林鈥檚 AP automation solution, they significantly reduced their invoice processing time along with errors and have had a much-improved workflow ever since.

Complete Controller Reduces Risk and Gains More Insight into their AP Process

Software company Complete Controller struggled with risk exposure and lack of visibility in the previous AP processes. Implementing 91快活林 eliminated redundant and tedious tasks, increasing efficiency and visibility, and reduced risk while enhancing security.

Eliminating Paper Processes for your AP Department

If you鈥檙e ready to start eliminating paper processes in your AP department, 91快活林 has a host of solutions to help you out. Explore our accounts payable automation solutions today to learn more.

Paperless Vendor Payments FAQs

What are Paperless Vendor Payments?

As suggested by the name, paperless vendor payments are an entirely paper-free payment option to pay your suppliers for goods or services performed for your business. Instead of cutting checks or paying with cash, paperless vendor payments give your AP team the flexibility necessary to pay your vendors from anytime, anywhere, with secure, streamlined, and efficient vendor payments.

What are the Benefits of Paperless Vendor Payments?

Paperless vendor payments create a host of benefits for both your business and your supplier. These benefits include the following:

• Fewer duplicate payments from human error and duplicate invoices
• Optimized payments for hybrid and remote office workspaces
• Ability to process more invoice payments with less overhead
• Improved vendor relationships from a faster, more transparent AP process
• Increased efficiency and reduced costs

How to Implement Paperless Vendor Payments

Ready to implement paperless vendor payments at your organization? Start by assessing your current process, and then reviewing what AP automation solutions are available. You should also consider the following:

• Identify and assess the pain points throughout your current AP process.
• Review automation platforms, and ensure each platform can integrate with your ERP or accounting system.
• Reduce and remove manual AP processes.