AP Automation for Seamless Financial Management

AP Automation, or Accounts Payable Automation, is revolutionizing how businesses handle invoice processing and financial workflows. Integrating AP Automation with your accounting software, such as Xero or Sage, can enhance efficiency and reduce manual errors if you want to streamline your accounting operations.

How to Effectively Integrate AP Automation with Your Accounting Software for Seamless Financial Management.

Thinking about your current accounting system is an important and thoroughly overlooked step. Before you do anything else, you need to know whether you’re happy with your current software, like Xero or Sage. In this case, you may need additional features that you can get with automation software. However, if you feel like your provider is letting you down, it might be time to consider whether you need a new system entirely. This will massively dictate the direction your AP automation journey will go in.

Video Introduction to Zahara AP Automation

Solve Pain Points with AP Automation

There’s no point in doing demos with your current software in mind if you know deep down that you need to switch providers before automating. Consider which pain points can be solved with AP automation software and how many require a new system. Whether you decide to stick or switch, finding a bolt-on that seamlessly integrates with your chosen primary accounting software is essential.  

AP Automation Options

Once you’ve decided and know what you want from your perfect software, it’s time to look at what’s available. Some key features people find most helpful are optical character recognition (OCR) for invoice scanning and automated approval workflows.

AP Automation key features:

• Optical Character Recognition (OCR): For automated invoice data extraction.
• Automated Approval Workflows: Speed up invoice approval times.
• Seamless Accounting Software Integration: Ensures smooth data syncing with systems like Xero, Sage, or QuickBooks.

AP Automation Reviews

It’s also important to read customer reviews. Find out if your front-runner has a reputation for terrible customer support or if there’s a feature you hadn’t considered but users rave about. Once you have a rough idea, write a shortlist of your favourites.  

Benefits of Implementing AP Automation in Your Accounting Process

Implementing AP Automation in your accounting software streamlines invoice processing and enhances overall financial management. With automated workflows, reduced human error, and real-time data tracking, AP Automation can transform your accounts payable process from a manual, time-consuming task to a seamless digital experience.

Setting Up Workflows for AP Automation in Your Accounting System:

Once you’ve done demos, are happy, and have decided on a provider, it’s time to maximise your software’s functionality. Moreover, AP software will allow you to have complex but effective approval workflows in the app. Instead of emailing POs and invoices to higher-ups and waiting for them to approve them, the software will automatically send them for approval to the right people. There’s no lengthy sign-off process. They’ll be able to ‘approve’ or ‘reject’ with the press of a button. Some software will even reward users for having super-fast approval times, utilising our competitive nature to speed up the process. 

Customise AP Automation Notifications

Have you ever considered that getting approval is probably unnecessary whenever you buy a pint of milk for the office fridge? It’s good practice to spend considerable time customising your workflows so you can set specific budgets for certain departments and expenses.

Purchases under an amount you choose can skip certain approvers in your regular workflow, meaning small (yet important) purchases get approved much quicker. Luckily, when you do this in-app, you’ll get a full audit trail, so even though you don’t need approval for these purchases, you can still monitor your spending. 

Oh! If you’re an approver, remember to keep your notifications turned on!

Training Employees on AP Automation:

It can’t be emphasised enough how important this is and how many well-meaning finance teams skip this step. You can set yourself up for success by making sure everyone understands the software in and out. It can be understandably difficult because team members will join in the implementation process at different points, meaning that you’re working with varying levels of knowledge. Providing thorough training and budgeting for professional training, if needs be, will ensure a smooth transition.

Accounts Payable Automation Best Practices for Cost Savings

Automating Invoice Processing:

At Zahara, OCR is utilised whenever you take a picture of a receipt or a supplier emails an invoice. Instead of you reading the documents and then typing them up, the OCR reads them for you and inputs all the data. If you have experience keying in large batches of invoices, you’ll understand how much of an asset OCR is! Companies using OCR generally pay their invoices 9 times faster, requiring significantly less effort. Zahara’s in-built OCR can accurately read your invoices down to the wire. It’s one of the best ways to follow lots of ap automation best practices by unleashing the full potential of your time and resources.

Optimising Cash Flow Management:

A saying you’ve probably heard a million times (which makes it no less important) is ‘Cash is king’. Essentially, you could be the most profitable company in the world, but that doesn’t mean anything without positive cash flow. You need to be able to see what you owe or have committed to buying to get an idea of your profits and available funds. This is the easiest way to avoid short-changing yourself.

Using AP automation software with a purchase order system is a great way to gain full visibility of your cash flow. When you have a purchase order system, the purchase orders act as legal promises that you will pay for what you’ve ordered when you’re invoiced. Instead of scrambling to get the cash together when the invoices come in, you already know how much you will spend in advance when you use purchase orders. When you’re making large orders every month, you can lose track, so you may pay them without question when invoices come in.

Reducing Fraud and Compliance Risks:

Following our last point, a purchase order system will help you cut costs while boosting your compliance and reducing the risk of fraud. If fraudulent or duplicate invoices appear in your AP software, they’ll be flagged for your attention. Several things could raise the alarms: not having an adjacent purchase order, a different total cost on the invoice, or the items not aligning. Fraudsters find new ways to con people all the time, and usually in ways which wouldn’t be immediately obvious, even to seasoned professionals.

There are other ways you can reduce your risk of fraud. We recommend segregation of duties so that no one on your team can approve their purchase orders and commit fraud from within your company. No one wants to think that it could happen to their team, but with AP automation software, there is no chance of it happening, so you can fully trust your team to do their jobs.

As a side note, this is your sign from the universe to immediately deactivate your old employees’ accounts and access to your finance software when they leave the company! The sooner you lock down who has access to your systems, the more secure you’ll be.

An example of a traditional Accounts Payable process  

If you’re working in Accounts Payable at the moment, chances are your process looks something like this:  

1. You receive invoices from suppliers, whether by email or paper copy. 
2. You manually enter the data from the invoices into an accounting system, like Xero, Sage, or Quickbooks. Sometimes, AP Clerks input the data into an Excel spreadsheet or paper record, but this is less common as finance functions have advanced over the years.  
3. You then either match the invoice to a purchase order or receipt.  
4. Once you or a higher-up are happy with it, payments are scheduled and processed.  

In its totality, this can be described as a traditional manual AP process. Despite being the default, the process is widely considered inefficient because of mistakes that can draw out the process and the length of time manual data entry takes to complete and authorise. 

An example of an AP Automation process 

1. You raise a purchase order using your AP software when you want to buy something.  
2. The purchase order is approved in-app after going through checks in a workflow. It is then sent out to the supplier.  
3. Your supplier’s email invoices to your AP software  
4. The intelligent software reads the invoice and automatically matches it to the corresponding purchase order.  
5. You can then make the payment confidently. 

Reasons to Choose Zahara

Zahara is the best choice for those needing 4-in-1 invoice approval automation. With its intuitive interface and ever-growing feature list, it’s tailored to meet the unique needs of businesses across many industries. From customisable workflows to detailed reporting, Zahara empowers companies to take control of their accounts payable processes.

Zahara is designed specifically to expertly handle the four key aspects of the accounts payable process, a 360 solution. There are four main features which should be non-negotiable on your quest for AP freedom. These are as follows: 

Purchase Orders: 

Bringing in a robust purchase order system is the best way to control costs before you commit to any spending. Worthwhile AP software will let you set strict budgets for particular departments and use multi-step approval workflows to decline, amend, or approve purchase orders. 

Invoice Processing: 

Automating your invoice processing is the single most effective way to speed up your AP function. Accounts Payable automation tools will help you process your invoices nine times faster with less effort. Zahara uses OCR (Optical Character Recognition) technology to read your invoices accurately, down to the line item.  

Approvals: 

Necessary for full control and visibility of your spending, bringing in approval workflows brings you true peace of mind. With Zahara, they’re infinitely customisable, and you can have an approver ready for every scenario. You can set strict controls for large purchases without having to bother your CFO every time you buy milk for the office fridge. You can have faith that your business won’t be making any unapproved purchases, while still giving your employees freedom within their budgets. 

Payments: 

The final element that completes the Zahara quartet is payments. You can export your invoices, where they can be grouped together and converted into a payment run. This massively simplifies the payment process because you can still use your existing bank, but without the limitations of making payments straight from your bank account, complete with a full audit trail.

 

You might like to learn more about how Zahara Software integrates with your accounting software:

Invoice Processing for Xero

• Sync Type: Full Sync
• Integration Type: Cloud

Speed up Bill payments with OCR invoice processing, invoice approvals and bulk payments in one great Xero addon.

Summary AP Automation

AP Automation is the future of streamlined accounting processes, helping businesses reduce manual workload, improve cash flow visibility, and enhance compliance. Integrating AP Automation software with your current accounting tools like Xero or Sage can elevate your finance operations and make data-driven decisions faster. Start exploring the benefits of AP Automation today.

 

What Next?

Invoice approval automation is a no-brainer for forward-thinking finance teams wanting to stay ahead of the curve. There’s no other way (besides dedicating a huge amount of time, resources, and mental energy) to have such a concise and reliable AP function. 

Zahara makes it easy for you to take that next step. You can contact an AP specialist at any time to discuss how invoice approval automation could be a game-changer for your team.