The Cascading Benefits of AP Automation

Organizations are always looking for ways to increase their efficiency and agility, especially given how dynamic the business landscape is today. However, the transformation roadmap often overlooks accounts payable (AP) automation. 

When it comes to automation and digital transformation, many organizations focus on the traditional, revenue-generating areas of the business, such as sales, marketing, and product development. But once you understand the cascading benefits of AP automation, it’ll be hard to keep it off your checklist. Implementing AP automation sets in motion a domino effect that helps finance teams improve efficiency, reliability, and profitability. 

In this blog, we’ll explore those benefits, their impact on the business, and how they build on each other, starting with speed. 

Benefit 1: Speed 

Streamlined invoice processing initiates momentum 

The journey begins with transforming traditional, time-consuming invoice processing into a streamlined, automated workflow. By automating data entry with high accuracy, you can significantly reduce the time needed to process invoices. This newfound speed becomes the catalyst for the entire AP cycle. 

Faster approvals trigger efficient decision-making 

The momentum gained from streamlined invoice processing triggers faster approval workflows. And with fewer exceptions and errors to manage, your daily routine is no longer peppered with invoice reviews. Without all that extra noise, you can take quicker action and make more informed decisions in the areas that matter. 

Benefit 2: Accuracy 

Minimizing manual errors enhances data accuracy 

Speed often comes at the cost of accuracy, especially with manual tasks. But by automating those tasks with the help of AI and ML, you can improve speed and accuracy together. Automation minimizes the risk of human errors in data entry, ensuring a higher degree of precision in financial records. This accuracy instills confidence in the reliability of financial data, setting the stage for informed decision-making. 

Precision in payments boosts reliability 

Accurate payment calculations become a cornerstone of effective financial management. Late payments and corrections become few and far between. And with precise figures at your fingertips, you can confidently make strategic decisions. This lays the foundation for finance to pivot from being reactive to being proactive. 

Benefit 3: Efficiency 

Optimized payment cycles improve cash flow 

Efficiency in payment cycles is a game-changer and a big step forward on the journey of maximizing your cash flow. You can optimize payment schedules, take advantage of early payment discounts, and strategically manage outgoing funds. The result is a bolstered cash flow that becomes a driving force for the organization's financial health. 

Enhanced vendor relationships strengthen collaboration 

Efficient AP processes positively affect vendor relationships. Timely payments and clear communication build trust and strengthen collaborations. The momentum gained from optimized payment cycles spills over into mutually beneficial relationships with vendors, laying the groundwork for a strong reputation and sustained success. 

Benefit 4: Reliability 

Consistency in processes establishes stability 

With so much capital moving in and out of your organization daily, the importance of having trustworthy and stable financial processes cannot be overstated. Once you standardize workflows and consistently adhere to best practices, you solidify finance as a reliable partner to your business and suppliers. 

Meeting compliance standards builds trust 

As AP processes become more reliable, meeting compliance standards becomes second nature. You gain the trust of regulatory bodies and stakeholders by consistently adhering to legal requirements. This results in a positive reputation and reduced risks associated with non-compliance. 

Benefit 5: Security and Control 

Data security measures ensure confidentiality 

The integrity of financial data is paramount, and AP automation reinforces this through robust data security measures. Encryption, secure storage, and stringent access controls ensure the confidentiality of sensitive information. Some automation services will even work within your existing technology to make use of your existing security features and not open you up to unnecessary risk with data transfers. This commitment to security builds trust among stakeholders, safeguarding the organization's financial integrity. 

Fraud prevention enhances financial security

Building on a secure foundation, AP automation introduces advanced fraud prevention measures. If an outsourcing partner handles your payments, they’ll often offer additional support to remedy incorrect payments or fraudulent charges. As a result, your organization becomes more resilient to fraudulent activities, mitigating risks and enhancing overall financial security.  

Visibility improves oversight and control 

Automation in a black box can be a source of anxiety for any finance team. When done correctly, AP automation offers unparalleled visibility into every facet of the process, along with a complete audit trail. This transparency empowers your teams to maintain meticulous oversight and intervene seamlessly when necessary, so you never lose your sense of control. 

Benefit 6: Cash flow optimization

Leveraging Single-Use Account (SUA) cards generates cash 

The pinnacle of AP automation's benefits is cash flow. Leveraging Single-Use Account (SUA) cards gives organizations maximum control over their finances. These virtual cards offer a secure and controlled means for making payments, further enhancing financial efficiency and control. 

SUA cards also yield the added bonus of cash rebates on payments. When you pay vendors using a SUA card, you receive a percentage of cash back that can be used to fund other initiatives for your finance team. AP automation service providers with more significant economies of scale can help you achieve higher rebate rates than if you were to go it alone with a bank. 

Negotiating favorable terms strengthens financial position 

Optimized cash flow positions organizations to negotiate more favorable terms with suppliers. Making timely payments and showcasing financial stability empowers your organization in negotiations. This culminates in a strengthened financial position and increased liquidity. 

Bringing it all together

As organizations navigate the complexities of modern finance, embracing AP automation becomes not just a strategy but a journey. The cascading benefits — initiated by speed, propelled by accuracy, maximized through efficiency, fortified by reliability, safeguarded by security and control, and culminating in cash flow optimization — create a chain reaction of value. The power of AP automation lies not only in its individual merits but also in the transformative momentum it generates, leading organizations toward sustained success and financial control. Embrace the domino effect, unlock the potential of AP automation, and embark on a journey toward unparalleled financial efficiency and resilience. 

About OneSource Virtual

OneSource Virtual (OSV) delivers patented in-tenant technology and expert services that efficiently automate the administrative, transactional tasks of Workday payroll, taxes, payments, and benefits. With over 1,000 active customers and a 95% customer retention rating, OSV is the leading exclusive provider of Workday Business-Processes-as-a-Service (BPaaS).   

Learn how we help organizations maximize cash flow with our AP Automation solution.