6/17/2020 7:00:00 PM | Business Success

Automated Accounts Payable

What it offers your business

Across business operations, software has expanded the scope of traditional jobs. Automation typically isn’t used to replace a function, but rather to bring new tools and capability to the people charged with doing tasks and meeting goals. By enabling people to do more with less, technology has freed up staff to focus on more strategic tasks instead of spending all their time on repetitive, mundane tasks. Nowhere is this trend more evident than in accounts payable (AP) departments.


What AP automation offers

Naturally, processing and paying invoices is a critical aspect of business operations. Traditionally, AP has been a manual process in which a person or a team receives invoices and marches them through all the steps needed for processing, approval, and payment. A fair number of businesses still rely on this manual AP process. But for leaders who want to grow, the days of manual processing are coming to an end.

AP automation goes beyond saving time and money and provides a strategic advantage for your business. Strictly looking at process, AP automation enables you to expedite the entire AP process, from invoice capture to payment execution. An automated process reduces errors, eliminates fees from late payment, and eliminates fraudulent charges by increasing visibility and improving controls.

The right automated AP solution can mitigate the problems of traditional AP while providing strategic benefits to your business—including paying for itself over time. Let’s look more closely at some of the benefits it offers.



By definition, automation means employing an automatic process to reduce human intervention. This makes automation a strategic tool that empowers individuals to do their jobs more efficiently while keeping errors to a minimum.

For a business to thrive and achieve better outcomes, automation must be paired with staffers so they’re no longer allocating 100% of their time to tasks that can be automated. As a result, they can be more productive.

Time reallocation is a key benefit of AP automation. With automation in place, the AP manager can focus on vendor management, process improvements, and higher value tasks rather than manual data entry. Furthermore, when it comes to the audit process, there is an automatic, electronic audit trail. This

improves compliance and reduces time spent searching through files for physical documentation.



By automating the AP process, workload can increase without straining the ability of the AP team. Indeed, automation dramatically reduces the time spent on the invoice-to-payment process, usually by 50%, and this reduction comes at a much lower cost than hiring an additional team member.

For a business to grow, operations must be scalable. AP automation fills that bill. Not to mention, the payback period for an AP Automation solution is typically less than six months.


Improved morale

Businesses can’t grow rapidly with a small finance team. This means looking at one of two options: hiring a larger team as the business grows or automating so the current team can handle the increased workload.

As the number of vendors in the payables system increases, the workload also increases. Many businesses ask the current AP team to simply handle the increasing workload until there’s enough.



Because automating AP gives your team greater visibility into the flow of resources, they can begin taking advantage of corporate card rebate programs and early pay discounts – which are one of the best financial returns for any organization – and can leverage them in a more predictable manner.

The payment process is also simplified by being able to use multiple electronic payment options, advanced scheduling, automatic remittance details, and a mobile friendly interface. Electronic payment methods also open the door to using virtual cards, which can produce additional rebates on vendor purchases.


Automating AP: The cost of waiting

It’s human nature to look at the cost of automating your AP department and wonder if it might be better to wait. But keep in mind that continuing a manual AP process will cost your business for each invoice processed.

The complete AP process includes receiving an invoice, finding the appropriate purchaser to approve it, entering the invoice data into the accounting system, requesting payment approval, executing the payment, printing a check, and mailing it. Each step takes time—and time equals money.

Basically, the costs break down into two categories: the cost of processing the invoice and the cost of processing the payment. Typically, it costs about $10 to $15 to process an invoice and about $2 to $10 to process a payment. In total, the cost of processing and paying a single invoice is about $12 to $25.

Even if your business is a best-case scenario and you spend only about $12 to process and pay each invoice you receive, you’re still spending a considerable amount of money on AP. And the longer you wait to automate—and the bigger your business—the more you’ll be spending.

This is the cost of waiting.


Choosing an automation solution

When looking at invoice-to-payment automation solutions, it’s important to ask plenty of questions. The following questions will help you identify a solution that meets your needs.

  • Does the solution fit my business size and process needs?
  • Does it integrate with both my accounting solution and my bank?
  • Does the solution automate invoice capture, invoice routing and approval, payment authorization, and payment execution— or only some of these tasks?
  • Does the solution reduce the risk of internal and external fraud?
  • Does it rely on a settlement account, or can I make payments directly from our bank account?
  • Is the pricing clear? Is the solution easy to use?

The answers to the above questions will help you decide which solution delivers the most value and is the best fit for your organization.

Be sure to choose a solution that integrates with your financial system of record and your bank account, otherwise you will end up with two parallel systems. It is also important to understand whether the payment execution features are consistent with your organization’s expectations for cash flow and management, and payment control. This includes dual authorization, segregation of duties, automatic remittance details, and the use of intermediary accounts. All in all, an AP Automation solution must meet the needs of your organization.


Boost efficiency, reduce risk, and grow your business

Not all AP solutions automate the entire invoice-to-payment process. And those that do vary widely in terms of design, functionality, and ease of use. It’s important to make sure the solution you choose covers every stage— from processing the invoice to executing the payment. With this in place, you’ll know you have the right solution to grow with you as you grow your business.


Take the Next Step

For more information about how Umpqua Integrated Payments can automate and streamline your AP process, contact us today: TreasuryManagement@UmpquaBank.com.