Payable automation9/1/2023 ![]() For instance, they may recommend making payments during an offer or discount period. Other functions handled by AP include working on strategies and implementing protocols to help the business save money. AP usually addresses all pre-approved purchase orders and month-end aging analysis reports that describe how much the company owes its vendors and creditors. There are also vendor payments to manage, such as payment terms, W-9s, and contact information. ![]() AP is also responsible for sales tax exemption certificates. To receive a refund, employees typically have to turn in a log report and receipts for approval. Once business travel has taken place, AP will settle the payments and travel reimbursement requests.ĪP also takes care of holding and distributing petty cash along with internal reimbursements for various company-related expenditures. On top of paying bills, AP also manages business travel expenses from airline ticket purchases to hotel stays for company employees and executives. When documented on a balance sheet, it is listed under “current liabilities.” Within a business, the AP team is responsible for sending payments owed by their organization to other vendors or even creditors.ĪP can function as a department in larger companies or combine payables and receivables within smaller companies. When an organization purchases goods or services from a vendor on credit, which requires payment within a specified amount of time, the accounting term is Accounts Payable (AP). ![]() So let’s take a look at some of the typical accounts payable processes and where automation can provide welcome assistance. According to the Business Insider Accounts Payable Automation Report, AP automation can decrease 81% costs while improving efficiency by 73%. Some of the most significant pain points include missing or lost invoices. Yet, many businesses have taken lessons from the COVID-19 crisis, including those signaling their time to update their manual processes with accounts payable automation.Įven before remote work became the norm, manual accounts payable processes have caused ongoing problems with inefficiency, human error, and even fraud. Further, the transition everyone had to make due to the pandemic has been difficult. Change is a challenge for most people, especially for accountants well-known for their preference for traditional methods when managing accounts payable.
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