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Commercial Insights

The Automation Advantage: Why You Should Automate Your Accounts Payable Process and the Steps for Getting Started

By Nick Witthuhn | Johnson Financial Group

6 minute read time


If you’re wondering what accounts payable automation is, look no further than this guide that covers how it can reduce costs and fraud, and the simple steps for getting started.  

Exploring alternatives to manual payment processes can provide a variety of benefits to your business. With many of our clients citing inflation and talent shortages as their top challenges in 2024, looking at ways to reduce and automate your accounts payable processes can give you a competitive edge and save your company money in the long run.  This will allow your business to focus on activities to increase revenue and your bottom line. 

Here are four areas accounts payable automation can benefit your business: 

The Benefits of Accounts Payable Automation 

1. Reduced internal costs 

Checks remain an integral part of the payment landscape but can be very costly for your business to process. Most companies spend an average of $6.00 per check. This includes the cost of check stock, stamps, envelopes, MICR ink and printer maintenance. In addition, there are the resource costs for an employee to stuff envelopes and drive to the post office. By outsourcing the check process and moving more payments to digital (ACH/Virtual Card), your business can reduce manual processing time and strengthen internal controls. Additionally, you can allocate valuable resources to other projects, which focus on driving business growth.   

2. Reduced fraud risk 

Payment fraud continues to be a huge concern for many businesses. According to the most recently published AFP Payments Fraud and Control survey in 2023, 65% of organizations surveyed were victims of payment fraud attacks or attempts. Businesses can utilize automated payables technology to help avoid successful fraud attempts by:   

  • Converting their primary payment method to ACH or Virtual Card. 
  • Storing bank account information in a secure portal. 
  • Validating vendor bank information automatically. 
  • Streamlining approval workflows for all payment types.   

3. Stronger vendor relationships 

Establishing and maintaining solid vendor relationships is crucial to the success of any organization.  Adopting an automated accounts payables strategy can help strengthen the relationship by allowing the vendor to select how they want to be paid. Additionally, they have access to a secure portal which will provide historical payment and remittance details. This will allow the vendor to pull information on demand, which will limit research inquiries to your business. In addition, collecting key information through automation can provide a smoother onboarding process for new vendors.    

4. Optimize process efficiency 

Accounts payable processes tend to remain static due to other business priorities, and lack of opportunity for review. There are many benefits and ways your business can streamline by assessing your AP process. With the adoption of an automated option, you will: 

  • Minimize payment errors from manual keying, such as sending incorrect amounts.  
  • Increase employee productivity. 
  • Create a consistent approval process for each type of payment. 
  • Gain greater control and visibility of payments. 
  • Make payments from anywhere you have an internet connection. 

How to Set Up Accounts Payable Automation 

1. Analyze your current payment process 

  • Identify manual tasks and process inefficiencies. 
  • Evaluate the time and resources involved. 

2. Bring in strategic internal partners 

  • Include accounts payable, procurement and the accounting manager. 
  • Discuss current processes and areas for improvement. 
  • Establish goals for your improved payment process. 
    • For example: Move away from checks or have invoices uploaded and routed for approval automatically. 
  • Collaborate with senior management to get all on board to embrace the opportunity for new and improved functionality. 

3. Research available payment process options and interview vendors 

  • Talk with your financial partner to see what solutions are available for your business. 
  • Develop a set of questions related to your process priorities such as:  
    • How can my ERP system integrate with your solution? 
    • What type of reporting is available? 
    • Can we set up dual approval? 
  • Create a vendor selection scorecard to determine the best fit for your business. 

Don’t let manual payment processes bog down your business. By conducting a detailed assessment, and having conversations with a trustworthy financial partner, you can help position your organization for success. With automated payments, you and your team will free up time to focus on what matters most to your business.  

Contact a Johnson Financial Group Advisor to discuss your company’s unique payment needs, or feel free to get in touch with us. We’ll help you identify the right mix of payment options for you, your organization and your vendors.  

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