Automated Accounts Payable Analysis isn’t often thought of as a revenue generation source, but the process can improve your bottom line.
Not only can it identify and prevent errors as they happen, decreasing the workload for recovery auditors later on, but Automated Accounts Payable Analysis can also help you track metrics relating to your A/P department’s efficiency and productivity.
Automated accounts payable analysis is an analysis of accounts payable data using an external tool or program instead of retroactively auditing the data and initiating manual error correction activities.
This process involves the export of data into a business intelligence tool or other software that can freely manipulate the data. Depending on your company size, that data pull can happen at varying intervals: daily, monthly, weekly, monthly, etc..
So how can an automated accounts payable analysis save you money? Here are eight ways:
1. Deeper Error Detection
Automated accounts payable analysis can provide a deeper level of error detection due to the sophisticated logic programmed into the tools. Like with any automation, the tool can provide more accurate analysis than could be accomplished manually, and the software can comb through greater volumes of data.
For example, if an automatic receipt and manual invoice both get entered into your system for the same transaction, that can be difficult to discover manually (because of the differing dates and invoice numbers), but an analysis software is capable of identifying that duplication.
2. Increased Frequency of Data Monitoring
Automating your accounts payable analysis allows the process to occur more frequently than could be accomplished manually. A large company with complex accounting functions can’t manually process and audit all accounts payable data on a daily basis to identify errors in real time. However, a software can pull that data and comb through it on a daily, weekly or monthly basis, depending on the company’s desires and needs.
The regular data pulls and analysis can identify errors as they happen, saving time for auditors reviewing the accounts later on.
3. Higher Likelihood of Preventing Incorrect Disbursements
Automated analysis can detect errors much faster than manual auditing. The quicker detection increases the likelihood that you can cancel an erroneous payment before it’s disbursed or debit the vendors account before a subsequent payment, as opposed to requesting a refund from the vendor after the fact.
4. Ability to Conduct Cross-System Analysis
An automated tool can consolidate data from multiple systems and analyze it together, which can be useful for companies working on multiple ERPs or that use a p-card system in addition to invoices.
This cross-system analysis can identify duplicates in different systems that would otherwise go unnoticed and aggregate spend that’s associated with multiple vendor numbers. The consolidated data not only helps A/P identify and prevent duplicate payments that are made in multiple systems but can also assist procurement negotiate volume pricing.
5. Detect Payment Term Adherence
Automated accounts payable analysis can track whether or not payment terms match what is listed in the VMF. If a net 30 day purchase period is agreed upon, but the invoices are going out net 15, the automated tool can identify that so your accounts payable team can ensure you’re getting a discount for paying quicker.
6. Improved VMF Administration Efficiency
Regular automated analysis of your VMF can prevent the setup of duplicated vendor records and make it easier to remove inactive vendors. Preventing duplicates leads to fewer errors and makes it easier to identify spend.
7. Expand P-Card Purchases
When consolidating data to aggregate spend with a vendor, automated analysis can also identify which vendors you are paying through both standard invoices and p-cards and which vendors are receiving multiple small payments instead of a few large ones.
That information can be used to make the A/P department more efficient and maximize rebates.
8. Ability to Monitor Automated vs. Manual A/P Processes
Automated processes like p-cards or PO flip are quicker and more efficient than manual invoices; however, they aren’t the best for all vendors. Automated analysis can help your team monitor the faster moving automated processes to reduce errors and identify vendors who submit a high number of invoices and would be good candidates to move to an automated methodology.
Automated Accounts payable analysis can detect errors faster and more efficiently to save your company money by stopping errors before they occur.
Learn more about how automated p-card analysis can save you money.