How technology is changing the role of the AP manager
A quick 5 minute read OR listen to the recording
How Technology is Changing the Role of the AP Manager
Historically, the role of an accounts payable manager has been defined simply as a personnel manager who focuses on ensuring their staff completes work on time with minimal errors. Today, technology such as AP Automation is shifting the role of AP managers from a focus on data entry to a more strategic, efficient, and data-driven function.
Paper-based accounts payable processes face many challenges, including high volume of paper invoices, tedious manual data entry, input errors, purchase order matching issues, along with a potential risk of noncompliance with reporting regulations. These delays, mistakes, and bottlenecks can frustrate suppliers and slow down the payables process. AP staff are constantly burdened by lost invoices or duplicate work and putting organizations at risk of jeopardizing vendor relationships and missing early payment discounts when checks are delayed and payment deadlines are missed. AP managers bear the weight of these inefficiencies and are constantly tasked with putting out fires, correcting errors, and attempting to salvage vendor relationships.
On top of time and money costs, manual AP processes also don’t provide data that helps organizations pinpoint performance opportunities, identify AP trends, or uncover strategic insights.
The Benefits of AP Automation
Using an automated platform, AP managers can significantly reduce labor-intensive, error-prone tasks like invoice entry, scanning, receipt and purchase order matching, coding, and data migration. In fact, automation can cut invoice processing time by 50%, helping refocus manpower on improving working capital management and performance optimization. As automation technology begins to free AP managers from data entry tasks, their responsibilities will become more strategic and increase their value within the company.
By implementing automated, paperless processes, CFOs, CIOs, controllers, and AP managers can use technology to expand their roles, assist in decision making, oversee software configuration and testing, and identify and define new efficiency goals for their teams.
Using AP automation software data, AP managers can more easily identify and address process bottlenecks and control breakdowns, address cash flow challenges, evaluate and improve vendor terms and relationships, ensure proper purchasing procedures are in place and followed, and identify and capitalize on payment discounts. AP managers can also focus more on opportunities for improvement in customer service and identify ways to improve response time and accuracy.
Here are some additional ways AP managers can utilize automation software for success.
AP managers spend countless hours overseeing routine department activities, such as disbursing checks and processing payroll, to ensure that they are completed accurately and on time. Automating purchase order matching and invoice approval dramatically reduces the time it usually takes an invoice to go through a tedious, manual, multi-person process.
Rather than juggling a slew of messy email chains, automation transforms the accounts payable process into one centralized, online workflow. Purchase order matching and data input becomes automated, and invoices are digitally routed to approvers or automatically approved. AP managers know where every invoice is instantly and can monitor the productivity of their staff.
AP managers work hard to ensure vendor invoices are paid on time and without error. Invoices are complex documents and manual input requires hours of intensive labor rife with input mistakes and duplicate data entry. When this process becomes automated, AP managers can approve payments in batches, are immediately alerted to problems, and automatically reminded about payment deadlines.
Rather than simply scanning and uploading a document, AP automation extracts digital and handwritten data and automatically captures it. This ensures the entire process remains automated and reduces input errors, saving AP managers time and money previously spent correcting mistakes or finding new vendors when relationships sour.
Build better relationships with vendors
Building and maintaining relationships with employees, clients, vendors, and lenders is a crucial part of an AP managers job as they foster visibility and collaboration between various stakeholders within and outside the organization.
Automation eliminates costly late payment fees and ensures vendors are paid on time based on the terms of their agreements. Vendors can also be automatically alerted during the invoice-to-pay process so that they know when to expect payment. Because invoice data is captured and logged in a historical database, AP managers and their teams can quickly and accurately answer vendor questions regarding a payment or settle a dispute within cost or timeframe.
Searchable strategic data
AP managers are responsible for maintaining accurate and complete financial, employee, and client records as well as answering to company leaders who want AP information such as invoice progress and forecasts on what will be paid over the coming weeks. In a paper-based world, these reports can take hours or days to compile. Using an automated platform, AP managers can access a comprehensive, searchable database of the payment history automatically to find the answers they need immediately.
This type of software allows managers to examine historical data quickly and strategize innovative ways to save money by taking advantage of payment incentives. Utilizing real-time data helps AP managers develop, implement, improve, and enforce budgets, policies, and department controls to increase accuracy and efficiency.
Making the transition
A truly successful digital transformation requires visionary management. AP managers are often the linchpin in the automation transition as they assist in tailoring the software to meet the needs of their organization and help guide the process for both upper-level management and AP staff. But the transition to automated accounts payable doesn’t happen overnight; these changes require a shift in operating processes, adjustments in the corporate culture, employee training, and reorganization of roles, as well as a new perception of the AP function itself. Though daunting at first, the adoption of an AP automation system can empower company leaders, AP managers, and staff to rethink their roles and grow their value within a company.