5 reasons to automate your AP processes on Dynamics 365 Business Central

As we all know, time is a precious commodity. For many finance teams using Microsoft Dynamics 365 Business Central, manual accounts payable processes are not only time-consuming but also prone to errors.

The solution to this problem is AP automation, which can transform these processes into streamlined, efficient operations. Not only does AP automation save time, but it also enhances productivity and accuracy, ensuring your AP team can focus on what really matters.

In this blog post, we explore the top five reasons why automating your AP processes with Business Central is a smart move.

What is "AP automation?"

AP automation is the integration of technology and digital processes to manage a company's accounts payable tasks more efficiently. Instead of relying on manual, paper-based methods, AP automation leverages digital workflows to handle everything from invoice processing to approvals and payments.

This approach minimizes the need for manual intervention, thereby reducing the risk of errors and increasing overall efficiency. With AP automation, repetitive tasks such as data entry, invoice tracking and approval routing are automated.

5 reasons to invest in AP automation

Save time by reducing manual data entry

Manual data entry is not only tedious but also a significant time drain for finance teams.

In fact, 57% of all businesses still rely solely on manual invoicing. This old-school method consumes countless hours that could be better spent on more impactful activities. Automating your accounts payable processes can drastically cut down on this time. Businesses that implement automated AP systems can process invoices and payments up to 74% faster.

With AP automation, the monotonous tasks of entering invoice details, verifying data and routing for approval are handled by software. This frees up the AP team to concentrate on strategic initiatives, such as financial analysis and planning, which can add real value to the business. Imagine the hours saved when the technology automatically captures invoice data, matches it against purchase orders and routes it for approval, without any manual intervention.

The reduction in time spent on manual data entry allows your finance team to be more productive and engaged in their work, ultimately contributing to the overall efficiency and growth of your organization.

Minimize errors and improve accuracy

Human error is an unavoidable aspect of manual data entry in the long run. Small mistakes in invoice processing can snowball into significant issues, leading to discrepancies, delayed payments and compliance challenges.

AP automation addresses this by using advanced technology to manage repetitive tasks, ensuring a high level of accuracy and consistency in every transaction.

With AP automation, the likelihood of errors is drastically reduced. The technology can automatically capture invoice data, match it against purchase orders and route it through the proper approval channels. This minimizes human involvement in error-prone activities, such as entering invoice details or verifying amounts.

Additionally, automated systems include built-in checks and balances that further enhance accuracy. For example, they can flag discrepancies between invoices and purchase orders, or detect duplicate payments; issues that might easily be overlooked in a manual process. These automated verifications ensure that financial records are precise and reliable, which is crucial for audits and informed decision-making.

In a manual process, spotting and correcting errors can be time-consuming and resource-intensive. However, with AP automation, any discrepancies are promptly identified and rectified, keeping the workflow smooth and efficient. This ensures that payments are accurate and on time, which in turn helps maintain strong supplier relationships.

Enhance productivity and achieve growth

As explained earlier, AP automation frees finance teams from time-consuming tasks. This enables team members to channel their energy into strategic activities that foster business growth.

Implementing automation can significantly reduce Days Payable Outstanding (DPO), with an average decrease of about 18%, saving approximately 5.55 days on average. This improvement in DPO enables better cash flow management, which facilitates more strategic investments and opportunities for expansion.

By automating routine processes, finance professionals can focus on high-impact tasks such as financial planning, analysis and risk management. This shift from mundane to strategic work not only boosts individual productivity but also enhances team morale and job satisfaction. When employees are engaged in meaningful activities, they are more likely to contribute innovative ideas and drive the company forward.

Additionally, AP automation provides real-time data and insights, empowering finance teams to make informed decisions quickly. Access to up-to-date financial information allows for more accurate forecasting and better resource allocation. The ability to monitor cash flow in real-time ensures that organizations can seize investment opportunities and respond to market changes promptly.

Furthermore, automation reduces the administrative burden associated with manual processes. By eliminating the need for constant oversight and error correction, finance teams can operate more efficiently and dedicate their time to activities that add value to the business. This streamlined approach not only enhances productivity but also positions the company for sustained growth and competitiveness in the market.

Streamline approvals and improve compliance

One of the standout benefits of AP automation is the ability to streamline the approval process.

Traditional manual approval workflows can be sluggish, often leading to bottlenecks and delays. With automated AP systems, invoices are routed to the appropriate approvers quickly and efficiently, ensuring that nothing falls through the cracks. This automation eliminates the constant need for follow-ups and manual tracking, thereby speeding up the entire process.

In addition to streamlining approvals, AP automation enhances compliance. Automated systems maintain a comprehensive audit trail of all transactions, making it easy to adhere to regulatory requirements and prepare for audits. Every step in the approval process is documented, providing transparency and accountability that are crucial for compliance.

For companies operating in highly regulated industries, this level of meticulous record-keeping is invaluable. It ensures that all transactions are executed in accordance with company policies and legal standards, reducing the risk of non-compliance and the associated penalties. Furthermore, automated workflows can be customized to include compliance checks at various stages, ensuring that all invoices meet the necessary criteria before they are approved.

Automating approvals also helps in maintaining consistency. By setting predefined rules and criteria for approvals, businesses can ensure that every invoice is reviewed according to the same standards, eliminating the subjectivity and inconsistency that can plague manual processes. This leads to more reliable financial records and strengthens overall financial governance.

Reduce costs and increase ROI

Automating your AP processes is not just about saving time – it’s a strategic financial decision that can lead to significant cost reductions and an impressive return on investment (ROI).

The average monthly cost of manually processing 5,000 invoices stands at a hefty $64,500, according to Beiing Human. In contrast, automating the processing of the same volume of invoices can reduce this expense to roughly $8,850, resulting in savings of around 85%.

These savings come from reduced labor costs, fewer errors and faster processing times, allowing your finance team to focus on more value-added tasks.

Beyond direct savings, AP automation can also lead to early payment discounts from suppliers, further enhancing your bottom line. The increased efficiency and accuracy make it easier to capitalize on these discounts, which can accumulate to substantial annual savings. Additionally, automation minimizes the risk of late fees and penalties.

Investing in AP automation is a forward-thinking approach that not only cuts costs but also supports sustainable growth. By reallocating resources to strategic initiatives, your company is better positioned to thrive in a competitive market.

Conclusion

There are several reasons to implement AP automation. These benefits add up to provide a significant competitive advantage over those companies still using manual AP processes, given that the benefits are not limited to just the AP team – they provide the wider organization with the opportunity to enable greater productivity and growth across the business.

With all things considered, can you afford not to automate your invoice processing?

Automate your AP processes with Zetadocs

Zetadocs AP Automation offers a comprehensive solution to accelerate your accounts payable processes.

With Zetadocs AP Automation, you benefit from smart invoice capture (that uses next-generation AI-driven data entry), automatic order matching and simple invoice approval.

Book a demo today to experience these benefits in your AP team.