According to research, it takes about 5 to 15 days to process an invoice from receipt to payment. Ideally, more than 70% of this work requires manual effort. When the industries spend significant time on manual Accounts Payable processes, they miss out on other vital functions.
Despite companies investing efforts in new technology, payment automation is not very common. Moreover, according to my understanding, payment teams often struggle with issues that lead to low efficiency. By integrating RPA in financial processes companies can reduce their errors considerably.
In this blog, I’ve compiled a list of use cases and benefits of Payment Automation, so let’s get started.
Need for automation in the payments sector:-
Payment Processing automation is an intelligent and efficient way to handle invoices. RPA is a feasible solution to Accounts Payable because of its adaptability, flexibility, and high efficiency of workflows.
RPA in Payment processing and Accounts payable uses the technology to automate different rule-based processes without human intervention.
Simply put, RPA is a virtual tool that can automate repetitive and manual tasks to eliminate errors in the process.
Use cases of Payable Automation:
- Invoice approvals
Accounts Payable invoices are received via email, Vendor Website Portal, and Fax machines. After which, it is matched to the corresponding purchase order.
The collection process involves a huge responsibility of managing different threads related to invoices, and the process can be unproductive and time-consuming. Moreover, it becomes difficult to check whether the invoice is approved if the vendor calls for it.
When you automate the invoice approval process, it helps companies eliminate any human intervention. Additionally, with the automated technology, invoices and PO can be routed to the concerned person; this can be done along with notifications on the deadlines.
- Invoice data entry
One of the most tricky tasks in the Accounts Payable and Payment workflow is getting the invoice data coded in the system. Besides, when you type the data manually, it requires time and resources and increases the chances of errors in the process.
A small mistake or error can cause a massive loss to the company. By automating the process, companies ensure that there won’t be any time cost that comes with the coding process.
Additionally, payment automation eliminates the need for uploading the data into the spreadsheet, as the data is captured automatically in the system. Finally, RPA ensures that the coding invoice data is accurate, thus reducing errors and improving efficiency.
- Financial reporting
Payment processing and finances need special supervision for the management of the business. The companies need to focus on the profit and loss report daily to make this happen.
Financial management helps businesses to know how well they are performing. RPA is the best way to deal with financial management, as it helps prepare reports in real-time.
Some of the critical roles that RPA plays include – variance analysis, income statements, profit and loss reports, trial balance sheets, etc. Moreover, the best part of the automation is; that it completes the process with no extra time.
- Payment execution
After authorization of the payments, the invoices go to the one who processes them by executing bank payments. First, however, the person handling the process needs to be clear about due dates and discount deadlines. At times, keeping track of the deadlines can be difficult as hundreds of invoices are processed weekly.
With RPA automation, the payment execution process and approved payments can be automatically scheduled and sent on the given date. Besides, the automation provides the companies with one location to choose payment options. The process makes it simple to pay electronically and eliminates the risks with payment.
Benefits of Automating Payments:
RPA automation offers excellent potential for online payment processing and transforms the invoice processing landscape for the Accounts payable team. It eliminates repetitive, low-value, and time-consuming tasks. Simply put, it makes the process easier for the Accounts Payable team that leads to benefits like:
Robotic Process Automation is scalable, so integrating it with your accounts and Payments processing is simple. Besides, you can reuse the technology across different departments and locations.
Whether it is HOC fluctuations in the account payable workload or ongoing growth in the department, RPA-based automated tools can be relocated to different queues, which suit organizations’ situations.
Scalability is a significant factor that increases the importance of online payments and accounts payable processes. However, the core idea of RPA technology is simple. Robotic tools implement a process by accessing different applications and software using the interface.
- Error removal
The data capturing in the Accounts payable and Payment process is a tedious task that leads to errors in data entry done in the accounts payable system. Robotic Process Automation helps improve the process by the feature of Automated invoice data capturing – saving multiple error costs.
Besides, the RPA technology is programmed to locate information and operates on an error-free basis. Additionally, minimum exceptions are kept after the relevant data has been captured.
The RPA solutions are designed to match your invoices at all levels. So, if the data in the invoice is accurate, it will be passed to the approval stage hassle-free.
- Better compliance
There is added pressure on the staff that handles the invoices with manual processes. Often, they forget to confirm the receipts of goods which end up holding overall processes.
Robotic Process Automation allows companies to set an automatic alert and send it to the PO creator – in case of missing PO the process is to be kept on hold.
Moreover, the automation process eases compliance across different accounting departments. It makes compliance a part of day-to-day tasks using Robots that ensures the task is done with complete accuracy.
- Streamlined supplier invoice data
If the accounts payable environment is manually driven, the process of capturing data and input from the invoices is managed by the data entry staff. As a result, there can be a delay in the processing of invoices.
And this can often cause mismanagement in the decentralized Accounts payable team, where no one is there to ensure that invoices have been received at the specific location.
The RPA process can change the whole working system, as it helps streamline the supplier invoice data. It replaces the task of coding the accurate data from the invoice and matching the information against different data sets.
- Faster reconciliation
Ask an Accountant or Finance head, and he will say that reconciliation is a tedious and cumbersome process that takes a lot of time. With RPA integration, the reconciliation process can be much smoother. RPA software bots can automate data transfer, manage decision-making, and troubleshoot different errors.
The best part about automated reconciliation is; that it reduces the chances of human errors, which otherwise can affect the whole process. In addition, it makes both accounts payable and payment processing accurate and quick. And with accuracy, there is no stress.
- Cost savings
Companies can save added expenses by integrating with RPA to take on the multiple invoice data entries and similar responsibilities outsourced. Additionally, Robotic Process Automation reduces the invoice lifecycle, which gives companies the benefit of early payment discounts offered by most suppliers.
When the tasks are automated, it helps them avoid late payment penalties. Chances of penalties are higher in manual operations, and automation tools can help with cost savings.
- Enhanced customer experience
One of the key benefits of Robotic Process Automation is; that accounting services are available 365 days a year. It does not consider employees’ non-working days or sick leaves, common in manual accounting processes.
Besides, automation tools allow companies to deliver great customer service and support. For example, with RPA, you can get a competitive advantage in Accounts payable and Payment processing.
- Improved supplier relations
Robotic Process Automation technology is adept at improving invoice approvals. The chances of any errors or misinformation are reduced with the process. There can be a payment delay with the manual process, and the supplier is kept in the loop. Most suppliers send the invoice again, thinking that it is lost in transit.
As a result, there may be confusion, and companies can end up paying the same invoice two times. Further, it leads to a shorter invoice cycle, which reduces the chances of miscommunication from the supplier’s side.
It is easy to implement the RPA technology in accounts payable and payments, but you need to follow some simple steps to integrate it.
I would highly recommend that if you are new to RPA technology, you can connect to experts in the field or companies that will help you set up the whole process.
An RPA service provider can help you develop a scalable plan to implement RPA that will suit your business workflow. By implementing RPA in payments, you can increase the scope of accounting projects, validate different opportunities, work out baseline operations, standardize workflows and implement projects. Have you leveraged the power of RPA in payments?