Smart Accounts Payable Software to Automate Your Payables
Process payments faster, reduce human errors & discrepancies, and drive business growth with an end-to-end Accounts Payable Software
Accounts Payable Software
What is Accounts Payable Software?
An Accounts Payable System is an automated system of payments management that streamlines payments to suppliers and other external business stakeholders to ensure your bills are paid on time without errors or discrepancies.
Accounts Payable Software uses modern technologies, such as OCR, to automatically extract text from digital invoices and route them to the concerned personnel for approval. It expedites your payments, prevents late payment charges, and fosters better relationships.
Why Choose Sage Accounts Payable Module?
Are you looking to streamline the labor-intensive & error-prone accounts payable process? If so, Sage ERP is an ideal solution that expedites the approval process, prevents errors, and strengthens your vendor relationships.
Here’s why leading Indian businesses are deploying Sage X3 to eliminate labor-intensive processes and drive growth:
- Prevent costly human errors, miscalculations, and duplicate payments
- Automate invoice routing and expedite the approval process
- Real-time anomaly alerts and automated fraud detection algorithms
- Enterprise-grade security with role-based user access & data encryption
- End-to-end regulatory compliance and complete audit trails
Primary Functions of AP Software
1. Invoice Tracking
Searching for a specific invoice within hundreds of old invoices can be a daunting and time-consuming task. Worry not, Invoice Management System provides seamless invoice tracking so that you will have all the information on the go to resolve business issues.
2. Automated Invoice Processing
AP Automation automates invoice processing, leading to lower data entry, significant time savings, and greater visibility into expenditures. It also facilitates integration with Optical Character Recognition (OCR).
3. Analyze Spending Pattern
AP Software helps you manage your money, make financial priorities, and gain a better understanding of your spending pattern. This will help you achieve your financial goals and achieve profit maximization.
4. Vendor Onboarding
Do you sell multiple products? If so, keeping track of multiple vendors can be a difficult and labor-intensive task. AP Automation streamlines vendor relationship management. It centralizes invoices from different locations and provides quick & extensive insights into vendor history and their payment status.
5. Instant Invoice Approvals
As a business, you keep receiving invoices from different suppliers and other stakeholders. ERP Application streamlines the process of handling these invoices and directing them to the appropriate department or personnel for approval. Not only that, you can also customize rules, user roles, and approval workflow.
6. Financial Security
Accounts Payable Automation has numerous data security protocols in place that help you adhere to the best industry standards and data security regulations. This allows your business to focus on your core activities rather than worrying about the confidentiality of your financial information.
Key Benefits of Accounts Payable Software
AP Software helps your business in various ways from improved speed, accuracy, and performance to regulatory compliance. Here’s how:
1. Faster Invoice Processing
Accounts Payable Automation handles the increased volume of invoices while maintaining consistency in performance and accuracy. It uses OCR technology to convert image text into digital text (extract invoice contents), match data, and ensure timely payments.
2. Reduces Human Errors
Another benefit of ERP implementation is that it reduces human errors by reducing repetitive tasks, providing access to up-to-date information, and automatically detecting incorrect missing fields & date formats.
3. Lowers Frauds
AP Software reduces potential fraud in the process by automating various tasks such as verification of invoices, identification of fraudulent vendors, detecting fake invoices, etc. Moreover, it shows detailed audit trails – a date & time-stamped record of transactions.
4. Process Standardization
Invoice Management System ensures your business adheres to uniform business processes and maintains consistency & standardization throughout the entire process. As a result, your business will benefit from greater efficiency, improved quality, and reduced operational costs.
5. Avail Vendor Discounts
By implementing AP Automation, your system will be able to grab early payment discounts and capitalize on new opportunities for long-term cost savings. Ultimately, your business will benefit from a healthy cash flow.
6. Regulatory Compliance
AP Automation equips your business with Audit Trails that document detailed logs such as the date of invoice received, who processed the invoice, etc. It keeps track of the latest regulatory requirements to ensure your business doesn’t face penalties, fines, and consequences for non-adherence.
How to Know If Your Business Needs AP Automation Software
1. Errors & Inconsistencies in Payments
Does your business highly rely on human workers? If so, you might have come across multiple occasions of errors, discrepancies, and duplications in the vendor payments. Sometimes, they can lead to severe financial and legal consequences for your business.
2. Payment Delays
Manual handling and processing of payments is labor-intensive work that can delay the receiving, processing, and approval. If you’re significantly relying on manual labor in processing your payments, there’s a good chance of delays, which can affect your relationships with external stakeholders.
3. Compliance Issues
Human errors, negligence, incorrect data handling, and payment processing delays can lead to compliance violations and severe legal consequences. Accounts Payable Software empowers your team with end-to-end regulatory compliance.
4. Higher Processing Costs
There are a myriad of expenses involved with the traditional paper-based invoicing process. This includes labor costs, printing & stationery, shipping, storage space, and shelf. If you haven’t digitized your accounts payable process, your operational costs can eat up a portion of your profits.
5. Invoice Tracking
Tracking paper-based invoices can be a challenging task, especially when hundreds of thousands of invoices are scattered across various locations. Thanks to Accounts Payable Software, now you can track invoices with a single click and get things done quickly & easily.
6. Potential for Fraud
Another problem associated with the paper-based accounts payable process is that it is more susceptible to fraud. Unauthorized modifications to the invoices or data breaches can pose significant legal and financial consequences.
Top 5 Industries that Benefit from Accounts Payable Automation Software
AP Automation is widely used across multiple industries. Here are some industries that benefit the most:
1. Manufacturing Industry
Manufacturing ERP Software is increasingly used in the manufacturing industry as the manufacturers have to actively make payments to different suppliers for raw materials. It ensures they can focus on their core activities and continuance in the pre-planned manufacturing processes.
2. Pharma Industry
Pharmaceutical companies have to make recurring payments for medical drugs, research, and marketing purposes. They use the Pharma ERP Software to track payments to vendors and ensure seamless business transactions.
3. Furniture Industry
ERP for furniture manufacturing empowers furniture manufacturers to track and make regular payments to suppliers, retailers, and interior designers. It ensures smooth operations in the furniture manufacturing plant.
4. Food Industry
Food companies use ERP for food industry to track and automate payments to their suppliers, restaurants, and grocery shops. It eliminates the need for manual intervention and speeds up regular business operations.
5. Electric Vehicle Industry
An end-to-end supply of raw materials is necessary for EV manufacturers to reduce unprecedented delays in the production process. ERP for Electric Vehicle Manufacturing ensures they acquire raw materials on time from the suppliers at the best prices.
Limitations of Accounts Payable Software
While AP Automation is a useful tool for tracking and managing your payables, it has certain limitations too.
1. Implementation Time
The implementation process may take from a few weeks to months depending on the size and complexity of your business.
2. Budget Constraints
If you’re working within a very tight budget, you will want to compromise on some ERP modules.
3. Potential Human Errors
Accounts Payable Automation relies on user-provided data. Providing wrong or incorrect information may result in duplicate, incorrect, or unauthorized invoices.
4. Employee Training
You will need to train your employees to get their hands on the new system, which may take time, cost, and effort.
Key Criteria for Choosing the Optimal AP Automation Software
The key to choosing the right Accounts Payable Software is identifying your unique industry and business requirements and checking the availability of those features.
1. Budget Friendly
Make sure that your new Accounts Payable Automation Software aligns with your budget. You may also incur additional costs such as extended support, training & implementation, and software & upgrades. If the total ERP cost goes out of the budget, it can lead to cash flow issues and disruptions in your business operations.
2. User Interface
Does your Accounts Payable Software offer a user-friendly and intuitive interface? If not, it can lead to confusion, human errors, and loss of employee productivity. Ultimately, the daunted user interface will become a hurdle to achieving your goals of growth & financial success.
3. Cloud Technology
These days, the cloud has almost become synonymous with the Internet. Cloud ERP uses cloud technology which eliminates the upfront costs associated with the traditional ERPs and the need for hardware upgrades. Moreover, your employees can access invoices anytime & anywhere.
4. Expense Reporting Integration
If you’re using a separate Expense Reporting System, make sure that your AP Automation Software offers real-time integration with it for real-time & consistent sharing of information. This way, you will get instant invoice notifications, and access to current & past payment records, leading to an increased level of accuracy & trust.
5. Easy Customizability
Customizability is another factor that you should think of while choosing an Accounts Payable Automation tool. An easy-to-customize solution will extend ERP functions, It will provide you with a higher level of control and reduce your dependency on the ERP vendor.
6. Vendor Reputation
Another criterion to consider is the vendor’s reputation. Make sure that your vendor has extensive experience working in your industry, and has a positive track record of providing regular updates & technical support.
Most Common KPIs in Accounts Payable Automation Software
1. Average Invoice Processing Time
Tracks the duration between invoice receipt and actual shipment. Automating accounts payable and reducing labor-intensive work can speed up the approval and improve Average Invoice Processing Time.
2. Cost Per Invoice
Calculates the cost incurred for processing each invoice. Includes various costs such as the cost of papers, salaries to employees, software licensing costs, and so on.
3. Invoices Processed Per Employee
Calculates the number of invoices processed per employee within a specific duration of time. Helps evaluate the efficiency of each employee and take corrective measures.
4. Percentage of Touchless Processing
Calculates the number of invoices processed without human intervention. Various technologies are used for automated invoice processing, including Optical Character Recognition (OCR), Machine Learning (ML), and AI in ERP.
5. Rate of Electronic Invoice Adoption
Calculates the rate of adoption of modern electronic invoicing compared to paper-based traditional invoicing. They are easier and faster to process. As they are fully automated, they free up your staff for more productive operations.
6. Payment Failure Rate
Ascertains the percentage of invoices that failed with an error. Invoice payments can fail due to various reasons, including both human errors and technological glitches. For example, incorrect payment details, duplicate payments, wrong amounts, server issues, and network disconnectivity.
Top 10 Best Accounts Payable Software in India
According to a research report by Future Market Insights, the Accounts Payable Automation market is estimated to be $8,106 million in size. It is expected to witness a growth of 10.30% CAGR until 2034. We’ve highlighted the top 10 best accounts payable automation software that come with a diverse set of features for different kinds of industries.
1. Sage X3
Sage X3 is arguably one of the best & game-changer AP Automation tools in the industry. It lets you take advantage of process automation, big data & analytics, lower checkpoints in the accounting cycle, and data-driven decisions. It is a strategic tool that comes with a robust array of features such as Business Intelligence, expense tracking, invoicing, and inventory & payroll management, among others. Despite its large feature set, this Best ERP Software in India is less complex compared to other ERPs.
Features
- Gain unparalleled visibility into supplier relationships and automate Purchase Orders
- Industry-specific capabilities and strategic insights to transform your business operations
- All-encompassing financial planning & reporting and automated generation of financial statements
- Ensures stricter adherence to the local, national & global financial regulations
- Extensive training resources to help you at every level – whether implementation or post-implementation
Limitations
- Requires a reasonable learning curve
- The implementation process might take additional time
2. Oracle NetSuite
Oracle NetSuite is a cloud-based ERP that offers a comprehensive set of modules to reduce complexities in the Accounts Payable process. It is a solid choice for mid-sized and large companies looking for a robust and integrated solution for Accounts Payable.
Features
- Offers up-to-the-minute financial visibility into business operations
- Deep integration with the CRM and e-commerce systems
- Supports multiple currencies and tax regulations
- Easily customizable to meet your unique industry requirements
- Scalable to meet growing business requirements without impacting performance or accuracy
Limitations
- Small businesses may find it to be expensive
- You may incur additional customization costs
3. SAP
SAP is a highly versatile Accounts Payable Automation Software that comes with extensive features for companies operating at global levels to automate AP, analyze their spending patterns, and stay ahead of their competitors. It supports multiple languages, currencies, and regulatory requirements.
Features
- Offers numerous modules, analytical tools, and reporting features
- Covers different aspects of your business operations
- Easily share data with your existing legacy systems
- Remote access to your data with a mobile app
- Data privacy and security protocols in place to protect your confidential information
Limitations
- Implementation costs can be higher
- You may run across errors or glitches during the implementation process
4. QuickBooks
QuickBooks is an enterprise-level tool that empowers your business with invoice generation & tracking, managing bills, handling payroll, and tracking stock levels. It also offers amazing integration with payment processors and e-commerce platforms.
Features
- Integration with online payment systems
- Easily track your expenditures and group them into different categories
- Invoice tracking, payroll management, and financial planning tools
- Share data with legacy systems on-the-go
- Reliable customer support services
Limitations
- Growing businesses may find a lack of scalability to meet their needs
- Limited customization options
5. FreshBooks
FreshBooks is a single platform for your invoicing and accounting needs. It primarily targets small businesses that are looking to automate payment recording, recurring payments management, extensive payment tracking, and auto-billing.
Features
- Real-time collaboration tools for increasing participation
- Fully customizable professional invoice templates
- Seamlessly share your data in real time for end-to-end visibility
- Integration with credit card payment processing and online payment platforms
- A user-friendly mobile app adds to your organization’s operational efficiency
Limitations
- Primarily focuses only on startups and small companies
- Limited feature-set
6. Acumatica
Acumatica is another popular AP Software that comes with unique pricing models, a comprehensive guide, and industry-specific capabilities to simplify payment processing and tracking your expenditure. It helps you improve transparency & visibility across business transactions, and boost vendor relations.
Features
- Comprehensive-time tracking and expense management functionality
- Provides industry-specific capabilities to meet your unique organizational needs
- Supports integration with external & third-party tools for real-time data sharing
- Performance monitoring with the help of Key Performance Indicators (KPIs)
- Powered by the cloud technology for quicker implementation and lower upfront costs
Limitations
- Expensive compared to other ERPs
- Complex implementation process
7. Quadient
Quadient is another popular AP Automation tool with a beginner-friendly and intuitive interface. It comes with a long list of modules, and exceptional capabilities. Not just that, it supports increasing workload and seamless integration with third-party legacy tools as well.
Features
- Pre-built data models, reports & dashboards, and document automation
- Strategic planning, risk management, and workflow automation
- Auto-route invoices, collection workflow & disputes management
- Solve complex business challenges with Predictive Analysis
- Make data-driven decisions with a comprehensive Risk Management module
Limitations
- Requires training and support to get familiar with the interface
- Small businesses may find it to be expensive compared to others
8. Tipalti
Tipalti transforms the long & tedious procurement process by automating and shortening the approval flow. It comes with many features such as renewal alerts, reconciliation reports, and seamless vendor management that can be handy to reduce human intervention in accounts payable.
Features
- Multi-country & multi-currency supports
- Integration with Optical Character Recognition (OCR) for intelligent text conversions
- Self-service portals to improve time efficiency while dealing with vendors and contractors
- Able to handle a greater volume of transactions without experiencing performance up-downs
- Easily accessible resources for employee training & increasing engagement
Limitations
- Complex implementation process
- Expensive license cost for small businesses
9. Airbase
Airbase is a cloud-based single solution that comes with a mobile app. It lets you track & manage non-payroll spending, automate payment processing, and completely revamp the traditional accounting process, all without needing to be physically present in your office.
Features
- In-built protection measures to avoid over-spending
- Stores a comprehensive database of vendors, their payment terms, and performance
- Seamless integration with third-party accounting systems for quick sharing of information
- Supports various types of automated payments (including one-time charges, infrequent charges, and regular subscription payments)
- Improves regulatory compliance with comprehensive audit trails
Limitations
- Primarily tailored for small and mid-sized organizations
- Long & tedious implementation process
10. Melio
Melio is a one-stop solution for a hassle-free accounting process. It is a feature-rich product that comes with a neatly designed interface, well-organized & action-oriented inbox, and an option to upload bulk invoices at once. It also supports integration with full-scale accounting software for transformative benefits.
Features
- Payment scheduling for automated payments
- Advanced analytics and intelligent reports
- Highly customizable and adaptable to your industry requirements
- Configure data security settings to assign user roles
- Deep integration with your legacy tools for seamless data sharing
Limitations
- Doesn’t suit global companies operating at the global level
- Limited feature-set
Difference Between Accounts Payable Software and Accounts Receivable Software
Both AP Automation and AR Automation are interlinked yet distinctly different terms. Let’s deep dive into the difference between Accounts Payable Software and Accounts Receivable Software.
| Accounts Payable Software | Accounts Receivable Software | |
| Definition | Accounts Payable Software is a comprehensive system that automates vendor invoice tracking, routing, and payment approval processes. | Accounts Receivable Software is an integrated system that streamlines the tracking and management of money owed to your business by third parties. |
| Purpose | ♦ Track payments due to suppliers with the Business Management Software ♦ Automate payments & reduce manual intervention♦ Invoice tracking & management | ♦ Track payments receivable through integration with the Sales Management System ♦ Streamline payment collection & reporting ♦ Auto-process unpaid invoices and set reminders |
| Primary Focus | AP Automation focuses on the liabilities payable to third parties | AR Automation focuses on the assets owned by third parties |
| Benefits | ♦ Never miss your dues ♦ Avail of early payment discounts ♦ Avoid duplicate payments to vendors | ♦ Send automated reminders to customers ♦ Maintain a positive cash flow with timely incoming cash ♦ Reduce bad debts & revenue losses |
| Administration | Typically, it is administered by the Accounts Payable team within the Finance Department. | Typically, it is administered by the Accounts Receivable team within the Finance Department. |
| Impact on Cash Flow | Decreases | Increases |
| Key Processes Involved | ♦ Invoice scanning ♦ Data extracting ♦ Invoice matching & routing ♦ Payment approval ♦ Payment scheduling ♦ Fraud identification & prevention | ♦ Invoice generation ♦ Payment reminders ♦ Follow-up reminders ♦ Payment verification & processing ♦ Risk management ♦ Dispute management |
| Important Metrics to Track | ♦ Invoice processing time ♦ Early payment discounts ♦ Late payment penalties ♦ Vendor payment history | ♦ Days Sales Outstanding ♦ Bad Debt Ratio ♦ Effectiveness of payment collection ♦ Customer behavior during repayment |
Accelerate Your Accounts Payable with Next-gen Sage X3
Do you always find yourself hunting for missing invoices? Is it impacting your business’s efficiency and harming your relations with your suppliers? If so, Accounts Payable Software can digitize the process of managing vendor payments, transform your AP experience, and help you take control of your business’s destiny.
Sage X3 is an ideal solution for companies looking to focus on strategic growth, expedite payments, and benefit from an accurate, efficient, and streamlined Accounts Payable process. It stands out from its rivals for its adaptability, scalability, customizability, and user-friendliness. With Business Intelligence and advanced analytical features in hand, executives will gain a constant pulse on the performance of various departments.
Frequently Asked Questions (FAQs)
What is the AP Automation?
AP Automation, or Accounts Payable Automation, refers to the use of modern technological solutions to digitize invoice-specific operations such as invoice receipt, invoice routing, approval confirmation, and payment processing. In short, it accelerates the traditional payable process, contributes to a positive cash flow, and allows business owners to have greater control over their finances.
What is Accounts Payable Workflow?
Accounts Payable Workflow is a comprehensive process that involves various tasks such as invoice matching, invoice routing, identifying & resolving discrepancies, invoice approval, and payment authorization. It can be either a manual paper-based process or automated depending on the size, nature, complexity, and unique requirements of the business.
What are the Steps in the AP Automation Workflow?
1. Identify Areas of Improvement
Perform a thorough analysis of your existing accounts payable process to identify inefficiencies and areas of improvement. Look out for areas that can benefit from automation.
2. ERP Selection
Select an ERP that fits your unique operational requirements. Make sure that the ERP aligns with your budgets and offers extensive customizability & scalability to meet future requirements.
3. Modern Technological Integration
Integrate your existing system with e-invoicing and OCR technologies to revamp the paper-based process with digitization. Adoption of modern technologies eliminates labor and improves the level of accuracy.
4. Establish Workflows
Define clear rules and responsibilities for the smooth flow of data across. Following a set of clear rules and standards reduces the likelihood of delays and duplication. It ensures the on-time approval of the invoices.
5. Employee Training
Now that you have clearly set out roles and responsibilities, conduct regular employee training programs to ensure you have a well-rounded and skilled workforce to reduce human errors and handle unexpected surges.
How Do Accounts Payable Solutions Contribute to Cost Savings?
Accounts Payable Software reduces manual efforts in invoice processing. As a result, your business benefits from faster invoice settlement, and reductions in late payments & penalties. You will be able to gain a competitive advantage by availing of early payment discount offers from the vendors.
Do Accounts Payable Solutions Support Multi-currency Transactions?
Yes, AP Automation Software comes with multi-company, multi-country, and multi-currency capabilities that play a crucial role in today’s globalized business landscape. It enables your business to operate at a global scale, gain efficiency in the day-to-day business operations, get up-to-the-minute reports, and improve accuracy in financial planning and reporting.
How Do Accounts Payable Software Reduce Frauds?
Accounts Payable Software reduces potential vulnerabilities and lowers the chances of human errors & tampering. It also detects and reports suspicious business activities in real time to prevent potential fraud. Moreover, it enables your business to set up separate roles for departmental heads & payment authorizers through the creation of separate blocks for preventing unauthorized payments without verification.
Will Negative Accounts Payable Affect Your Company?
Do you keep losing track of invoices? Or do you have incomplete or inaccurate records in your invoices? If so, your company may suffer from negative accounts payable. Negative Accounts Payable can affect your business in various ways. It can harm your company’s credit ratings, hike borrowing costs, and make it less attractive to potential investors.
What are the Different Types of Invoices?
Different businesses use different types of invoices that serve their unique operational needs. Here are the most common types of invoices:
PDF Invoices: These are digital files that replicate the layout of traditional paper-based invoices. They are easy to customize. They can be viewed, stored, or printed.
Scanned Paper Invoices: Businesses use the Optical Character Recognition (OCR) technology to digitize existing invoices using a scanner and eliminate data entry.
Electronic Invoices: These invoices use a structured data format with specific data fields (such as vendor details, date-time, and invoice number) for automation, standardization, and interoperability between different systems.
Paper Invoices: These invoices are physically printed on paper. They require manual efforts and are often prone to human errors.
What are the Popular AP Software Platforms?
Here are the most popular AP automation platforms:
- Sage X3: Streamline approval workflow, eliminate delays, process invoices faster, and enhance compliance with a multi-company, multi-currency, and highly-customizable ERP.
- Sage Intacct: Automate billings & payments across multiple business entities with flexible payment options and seamless API integration.
- NetSuite: A powerful application suite that automates vendor collaboration, payment streamlining, and the power of customization.
- Xero: A specialized accounting software that streamlines payments and offers integration with third-party tools for trigger-based automation.
- QuickBooks: Simplify auto-payments, accept payments online, and leverage other general automation features.
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